Maersk Line states that it will implement a general rate increase from India to Latin America starting on the first of February, 2013. The rise is planned for both 20-foot containers and 40 foot containers. The containers have been slated to increase in cost by $ 400 as the 20-foot containers are set to increase by $ 200 per engagement. Maersk claims this increase is actually a method of coping with rising costs of gas. Maersk has also said that other paths will be facing rate increases later on. Already, the Asia Europe route is under heavy scrutiny, since A.P. Moller-Maersk says that at the present rates, they are not making money and also to reach the route profitable, rake hikes will probably be required and are probably already under consideration.

Along with the rate hikes, Maersk has also declared that the effective dates of its congestion costs to the USA have been transferred to a subsequent date in February (with regards to the location), as a way to cope with a possible strike by the International Longshoremen’s Association. It’s come as a result of a recent break in negotiation talks in the NYC- New Jersey area which may lead to massive strikes and will hurt Maersk’s commercial viability if not prepared for.

Robust offer and weak demand have been cutting steadily in the economic returns from transport and as a result of this, Maersk and other shipping lines have identified their business has been steadily decreasing. The fact that bunker fuel costs have increased and spot rates have fallen are not enough to stave off the present glut of capacity that the business now faces. The gain in carrying capacity implies that even though spot rates and the gas costs are lower, the prices the lines charge will probably be decreased because of the opposition they face.

The increase in shipping capacity along with the raise within their rates could make them an unattractive choice for shipping to locations like the Usa and Asia Europe. Although Maersk is a iming to produce the Asia Europe route more profitable, they should realize that there’s a wonderful balance between practicality and feasibility, also it could not be wise to step over it, lest the end-result damage the line all together.