Beyond transpacific: HMM files $3,000/FEU GRI, PIL and ZIM hike Asia-Oceania rates

The Analysis

The first of September, and the filing wave is not only on the transpacific this time. HMM has put a General Rate Increase of 3,000 dollars per 40ft container on its transpacific eastbound trade, and the filing carries a sentence that matters more than the number: application stays subject to market conditions. On the same date, PIL and ZIM filed Asia to Oceania increases, 500 dollars per TEU to Australia and 300 dollars per TEU to New Zealand. Three carriers, one effective date, two oceans.

Count the notice. The advisory carrying this is dated 21 August, a Friday. The effective date is Tuesday 1 September. Eleven days to move whatever could be moved, and for most of the book nothing could be moved, because the cargo was not built.

Here is the one thing I want on the table before any arithmetic. A filed GRI is an ask, not a rate. Three carriers filed on the same day and three carriers will not all collect in full. The job this month is to work out how much of the 3,000 is real before you reprice a single forecast off it.

Read the three filings literally first, because the wording is where the money is.

HMM. A General Rate Increase of 3,000 US dollars per 40 foot container on the transpacific eastbound trade, effective with the 1 September wave, and the carrier itself notes that application stays subject to market conditions. Two things are in that sentence and only one of them is a number. The number is 3,000. The other thing is a get-out, and it is the more valuable half.

PIL and ZIM. Asia to Oceania GRIs effective 1 September. 500 dollars per TEU to Australia. 300 dollars per TEU to New Zealand. Note the unit. Not per container, per TEU. That single word decides who pays what, and I will come back to it.

Put the three on one basis so they can be compared. Per TEU, a 40ft box counts as two. On that reading the Australia filing is 1,000 dollars on a 40ft and the New Zealand filing is 600 on a 40ft, against 3,000 on a 40ft eastbound transpacific. So the headline set, per 40ft box, is 3,000, 1,000 and 600. The transpacific ask is three times the Australian ask and five times the New Zealand ask. The Australian ask is one and two thirds the New Zealand one. Those ratios are the useful part, because they tell you where the carriers think they have pricing power this month, and it is not Oceania.

Now the four things the summary does not say, which are the four questions to ask in writing.

It does not give a 20ft figure for HMM. A 3,000 dollar per 40ft GRI does not tell you what happens to a 20ft box, and carriers do not simply halve it. If you ship 20ft equipment on that trade you do not have a number yet, and anyone who quotes you 1,500 is guessing.

It does not say which services, which strings, or which origin and discharge ranges the increases cover. Transpacific eastbound is a trade, not a service list. Asia to Oceania is a region pair, not a port pair.

It does not say what the effective date is keyed to. Booking date, gate-in date, shipper's order entry, bill of lading date, or vessel departure. Those five produce five different answers for the same container, and the difference between the first and the last can be two weeks of shipments.

It does not say whether these stack. Whether the GRI sits on top of an existing peak season surcharge, on top of a bunker or low sulphur line, or replaces one of them, is the difference between a 3,000 dollar event and a 3,000 dollar headline.

The per TEU wording deserves its own paragraph, because it inverts a habit most importers have.

If a surcharge is filed per TEU, then a 40ft container pays exactly twice what a 20ft pays. The Australia number is 500 on a 20ft and 1,000 on a 40ft. The New Zealand number is 300 and 600. What that means is that consolidating two 20ft shipments into one 40ft does not reduce your exposure to this increase. You pay per TEU either way. Two twenties cost 1,000 to Australia. One forty costs 1,000 to Australia. The consolidation saving you were counting on does not exist on this line item.

The flip side is equally useful. It also means the increase scales exactly with your volume measured in TEU, not with your box count. So you can forecast it accurately off your TEU plan without knowing your equipment mix, which is a rare piece of good news in a GRI month. Take your forecast TEU to Australia, multiply by 500. Take your forecast TEU to New Zealand, multiply by 300. That is the exposure, and it does not depend on how you pack.

Then the phrase that decides whether any of this matters: subject to market conditions.

A GRI filing is a ceiling. Carriers file what they would like and collect what the market will bear, and in a month where three carriers file on the same day, at least one of them is filing partly to see what the other two do. I have never seen a 3,000 dollar per box increase land in full across an entire book in one month, and I am not going to pretend this one will be the exception. What I cannot tell you, and what nobody can tell you on 1 September, is the realisation rate. So model it as a range.

Take your own current all-in eastbound number and call it B. I do not know B, so I will show the shape with two values. If B is 4,000 dollars per 40ft, a 3,000 dollar increase is a 75 percent move. If B is 6,000, it is 50 percent. Both of those are absurd as final outcomes, and that is the point: the size of the ask tells you it is an ask, not a rate card.

Now the scenarios. Zero implementation, nothing changes, you pay B. One third implementation, roughly 1,000 dollars a box. Half, 1,500. Full, 3,000. Put that against a unit of cargo so it can be argued in a pricing meeting. Assume a 40ft container holds 1,200 cartons, which is my assumption and should be replaced by your own pack-out. Full implementation is 2.50 dollars a carton. Half is 1.25. One third is about 0.83. Assume the same box carries 18 tonnes of net cargo, again my assumption. Full is about 167 dollars a tonne, half about 83, one third about 56.

Do that conversion before you speak to a buyer or a sales team. Two dollars fifty a carton sounds survivable in one room and three thousand dollars a container sounds like an emergency in another, and they are the same number.

The Oceania side is smaller and, for most importers, more likely to be missed, which is exactly why it deserves a line in the model.

Assume you ship 30 TEU a month to Australia and 12 TEU a month to New Zealand. Australia at 500 a TEU is 15,000 a month. New Zealand at 300 a TEU is 3,600 a month. Together 18,600 a month, which annualises to 223,200. If those filings realise at one third, the number is about 6,200 a month and about 74,400 a year. Both figures belong in a budget, neither belongs in a panic.

The interesting comparison is inside the pair. Australia is being asked for 1.67 times what New Zealand is being asked, per TEU. If you have both books, that gap is worth ten minutes of thought. It is 200 dollars a TEU, or 400 dollars on a 40ft box. If any part of your New Zealand volume physically moves through an Australian port on the way, ask which filing attaches to it, because the two numbers are different and the transshipment path may attract the larger one. The summary does not say anything about transshipment, so this is a question, not a finding.

Timing, then, and it is the only part of this that you could have acted on.

Eleven days between the advisory and the effective date, Friday 21 August to Tuesday 1 September. The move that was available in that window was to gate in before 31 August on anything already built and ready, which takes the old rate on the old basis. If you did that, check the invoices this week, because the whole value of the exercise evaporates if the increase is applied on booking date or on bill of lading date rather than on gate-in. That is the keying question again, and it is worth more than the rate question in the first fortnight of September.

For anyone reading on 1 September, that window is shut, and the useful question has changed. It is no longer can I avoid it. It is whether the increase attaches to bookings that were made in August with sailings in September. Some contracts and most tariffs key to the booking. Some key to departure. If yours keys to booking and you booked in August, you may already be outside the increase, and you will not find that out by waiting for the invoice to tell you.

Let me put a mixed book together, with the assumptions stated, because this is the shape most importers actually have.

Assume 25 40ft containers a month eastbound transpacific, and the Oceania volumes above, 30 TEU to Australia and 12 TEU to New Zealand. Assume the transpacific GRI realises at one third and the Oceania filings realise at one third. The transpacific line is 25 times 1,000, which is 25,000 a month. Oceania is 6,200 a month. Total about 31,200 a month. Now the same book at full implementation: 25 times 3,000 is 75,000, plus 18,600, total 93,600 a month. The spread between the two scenarios is about 62,400 a month.

What I would do with that spread is not average it. Budget the one third case, 31,200 a month, because that is the case I think is most likely, and hold the remaining 62,400 as a named contingency that finance knows about rather than a surprise that arrives in the October close. A GRI month is when forecasts get quietly destroyed, not by the increase landing, but by somebody budgeting the headline and then explaining the miss.

What I would actually do, and by when.

Wednesday the second. Four written questions to each carrier and forwarder, and do not accept a verbal answer on any of them. Does the increase apply to my named account or to my contract rate, and if not, when does it. What date is the effective date keyed to. Does it stack with the surcharges already on my invoice, or replace any of them. What is the 20ft figure. Four questions, one email, and the email is the evidence when the invoice disagrees.

Friday the fourth. Reprice the September and October landed cost at one third implementation, not at the headline, and write the assumption into the model as a cell with a note next to it that says one third and why. If somebody overrides that cell later, they are making a decision and it should be visible as one.

Thursday the tenth. Compare what you were quoted against what you were invoiced on the first full week of September sailings. This is where the realisation rate stops being a guess. Measure it per box, on your own book, and write the number down. If the realised increase on your eastbound boxes is more than 1,000 dollars a box against your August average, stop floating and put 60 to 70 percent of fourth quarter volume on a fixed rate before the month is out. If the realised increase is under 300 dollars a box, keep floating and revisit at the end of the month. Between 300 and 1,000, do nothing and measure again the following week.

Tuesday the fifteenth. If you have a contract re-opener or a rate validity clause, this is the week to use it, because you now have two weeks of realised data rather than a filing. A clause that gives you thirty days notice is worth more in mid September than it was in late August, when all anybody had was a press line.

Monday the twenty-first. Check the Oceania invoices specifically. Small trades get less scrutiny and more errors, and a 500 dollar per TEU filing that was meant to apply to Australia only is exactly the kind of line that gets applied to a New Zealand shipment by a billing desk working from a summary.

One last point about the shape of the blind spot, because I think it explains why the Oceania half of this gets missed. Most importers I talk to run two books: a large one on the eastbound transpacific and a smaller one somewhere else. The large one gets a rate review every month. The smaller one gets reviewed when somebody complains. A 500 dollar per TEU filing landing on a small book is a small number arriving with no process around it, and it will sit in the invoice for two or three months before anybody runs the multiplication. At 30 TEU a month that is 15,000 a month, 45,000 over a quarter, of nobody looking. The fix is not a negotiation, it is a calendar entry: put the Oceania lines into the same monthly review as the transpacific lines, with the same two measures, quoted against invoiced and realised increase per TEU.

And on the eleven days. I would treat that figure as a planning metric rather than as a grievance. If the notice on a 3,000 dollar per box filing is eleven days, then the only cargo you can actually protect with a rate action is cargo that is already built and within roughly a week of gate-in. Everything further back in the pipeline is exposed by construction, not by booking behaviour. That is an argument for holding a small buffer of finished goods ahead of filing windows you can see coming, rather than an argument for trying to run production faster. It is also the kind of thing worth costing once, in a quiet month, instead of costing it inside eleven days while everybody is shouting at each other.

Now the alternatives and the traps, in the order they tend to cost people money.

Re-routing New Zealand through Australia, or the reverse. Do not think about it until you have the answer on which filing attaches to a transshipped box. A 200 dollar per TEU difference is real, but it can be wiped out by one extra handling, one extra port call, and a week of transit, and I do not have your handling numbers so I will not pretend to price it. Get the answer on the filing first, then decide whether the route question is even open.

Switching to a carrier that did not file. Tempting and usually temporary. A GRI is a market signal before it is a price, and non-filing carriers tend to follow within weeks or to raise their spot selectively. If you switch, switch on total landed cost and service, not on the absence of a filing, and get the new rate in writing with a validity date.

Switching mode or shifting origin. Both are answers to a structural change, not to a September filing. Leave them out of this month's decision.

The traps.

Per TEU versus per box. I said it above and it is the single most common error in a GRI month, so it goes in the checklist. Read the unit in the filing. Confirm the unit with the carrier. Then check the invoice against the unit you confirmed.

Stacking. Ask for one all-in number per box, base plus every surcharge, on one date, in writing. A GRI on top of a peak season surcharge on top of a bunker line produces a total that nobody in the room predicted, and it is always discovered on the invoice.

Quoting the headline back to yourself. If your forwarder sends you the 3,000 as though it were final, ask them to forward the carrier's confirmation of application to your account. If they cannot, it is a filing, not a rate, and it should be modelled as a range.

Currency. These are US dollar filings. If you contract, invoice or budget in another currency, your exposure this month has two components and only one of them is the GRI. Keep them separate on the page so you can see which one moved.

Contract notice periods. If your contract has a rate change clause, the carrier may be obliged to give you notice and may not have given it. Check the clause before you pay the increase, not after. This is a contract question, not a legal conclusion, and if it looks contested, get your own counsel to read the clause.

And the one everybody forgets: the eleven days. The window closed on 31 August. If you moved cargo early and the increase is applied anyway, on a booking date or a bill of lading key, you have paid the increase and taken the cost of pulling the cargo forward. That is the worst of both outcomes, and the only defence is having asked the keying question before you moved it.

Three thousand dollars a box, subject to market conditions, which in plain language means subject to how much of it the market will hand over. I would budget a third of it, measure the first fortnight, and set the trigger at 1,000 dollars realised per box. The rest of the number is a negotiation that has not happened yet, and no forecast should be built on the opening bid. If it does land in full I will eat the column, which at least will give me something to do while the invoices are being disputed.

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— By Vivian Zhao