Supply Chain Action Points
Read this first — the conclusion, and the moves to make:
- Before 15 July, list every booking that falls on a sailing after the effective date and get a stated validity period on any quote you accept; a level with no validity clause cannot be budgeted.
- Audit the container mix this week: a forty at $10,400 against a twenty at $7,300 means every twenty converted to a forty saves $3,100, and on a twelve-box monthly program with four twenties that is $8,400 a month, provided the cargo is volume-limited.
- Put the 1.42 twenty-to-forty ratio, or the 40% per-TEU premium on the small box, into the quote sheet so competing offers are compared on cost per TEU rather than cost per container.
- Ask both carriers for the same sailing week before deciding; when two carriers post the same level on the same date, the remaining lever is the sailing and the equipment, not the headline price.
- Re-run the North Africa landed cost at the new level before 15 July and decide which SKUs slip a sailing and which absorb it, judged on margin per cubic metre rather than per container.
CMA CGM and MSC announced FAK increases effective July 15 on Asia–Mediterranean and North Africa lanes. North Africa rates rise to $7,300 per 20' and $10,400 per 40', among the highest quoted this peak season, as carriers press rate restoration across east–west trades.
The Analysis
Ten thousand four hundred dollars for a forty-foot box to North Africa. Seven thousand three hundred for a twenty. Both effective 15 July, posted by CMA CGM and MSC on the same Asia–Mediterranean and North Africa trade, and described as among the highest levels quoted this peak season.
Every headline I have seen picked up the forty. The twenty is where the arithmetic gets interesting, because the two numbers together imply a ratio, and a ratio is the one thing in a rate announcement that a carrier cannot blame on the market.
Ten days separate the announcement from the effective date. That window closes on a booking confirmation, not on a sailing date, which is earlier than most people plan for.
A FAK is a posted base rate. Freight all kinds, one level for the lane, filed and published, and everything that sits above it in a quotation — origin handling, equipment, the seasonal layers — is priced separately. So $10,400 is not an invoice. It is the floor of one, and the floor happens to be the only part of the quote that gets published where your competitor can read it. Keep that asymmetry in mind when the number is called the highest of the season: a public floor with a private ceiling is a pricing structure built to be compared on the floor and paid on the ceiling.
Now the part nobody printed. Divide 10,400 by 7,300 and you get 1.42. A forty takes twice the volume of a twenty, so per TEU the small box pays $7,300 and the big box pays $5,200, a gap of $2,100, or 40.4% more per TEU for the shipper who cannot fill a forty. This announcement contains no published benchmark and I am not going to invent one, because a made-up norm is how a rate analysis turns into a guess. What the announcement does give you is an internal ratio, and an internal ratio is a fact about this filing rather than an opinion about the market. It also tells you something the level cannot: the restoration is not spread evenly across cargo types. Dense, heavy, weight-limited cargo that has to travel in twenties is absorbing a 40% premium per TEU, and that cargo has the least ability to substitute.
The simultaneity is the signal, not the level. Two carriers, one lane, one date. When a single carrier lifts a FAK ten days out, that is a test. When two post the same level on the same effective date, the test has already been run between them, and what is left for the shipper is not price discovery but acceptance. Note also what the reporting says this move belongs to: rate restoration across east–west trades. Restoration is a word with a history attached. It means the level is being argued back toward something, and the argument is being made lane by lane, in sequence, so whichever lane prints first sets the reference for the lane that prints next.
Who feels this first splits by container, not by company size. An exporter with four twenties a month and no ability to consolidate is exposed on day one and holds no lever at all, because the premium is embedded in the equipment choice rather than in the negotiation. An exporter running full forties sees the same headline and pays 40% less per TEU for it. A forwarder buying in bulk can re-mix. A small shipper booking one twenty a quarter cannot, and the 40% is simply the price of being small on this lane. Trade direction matters just as much. Under FOB terms the buyer nominates and pays the carrier, so an Asia-origin seller can watch this number go by without it touching the invoice. Under CIF or CFR the same number lands on the seller's margin. That distinction was settled months ago when the contract was signed, and no rate announcement reopens it.
The clock is short and it is not the sailing date. A FAK effective 15 July bites on bookings confirmed for sailings on or after that date, and confirmation usually happens days before the cargo cutoff, which happens days before the sailing. In practice the day you feel this is the day a booking request comes back with a different number from the quote you were working from, and that day is likely to be in the first half of July rather than the second half. Ten days is enough time to move volume and not enough time to renegotiate a contract.
What the coverage did not say is that the announcement, as reported, carries a level and an effective date and nothing about how long the level holds. A rate with no validity period is not a rate you can budget against. It is a rate you can only accept. That matters more than the $10,400, because the whole exposure of a shipper booking after the fifteenth sits inside an unpriced variable: the next announcement. And with two carriers already quoting the top of the season's range, the next announcement has very little room to go lower and a great deal of room to add a layer. The published number is the visible half of the risk.
Run a small program to see where the money actually is. Take twelve boxes a month to North Africa, four twenties and eight forties, which is an assumption about a mid-sized exporter and not a figure from the article. At the announced levels that is 4 times 7,300 plus 8 times 10,400, or $112,400 a month. Convert the four twenties into two forties, same TEU count, and the bill becomes 10 times 10,400, or $104,000. The saving is $8,400 a month, just over 7% of the ocean spend, and $100,800 across a year, on a decision that requires no negotiation at all. The condition has to be said out loud: the cargo must be volume-limited rather than weight-limited, because a twenty carrying twenty tonnes of dense goods cannot be split into a forty without breaking a weight limit. For light, bulky cargo the ratio is free money. For heavy cargo the ratio is a wall, and the 40% premium is the price of physics.
Flip it. Suppose you wait, the level holds through August, and nothing else is announced. You have lost nothing except the freedom to pick your sailing, and you have kept your options on volume. Now suppose the next announcement adds a layer on top, which is the likelier direction given where this level sits in the season's range. You pay the increment on every box rather than on the marginal one, and you pay it on sailings that were already in your plan. The asymmetry is the whole argument. Booking early risks the difference between this level and a lower one; waiting risks the increment applied to a hundred percent of your volume. Those two are not the same size of mistake.
The trap is comparison. Two quotes for the same lane, one built on forties and one on a mix, will look like a spread of several hundred dollars a box when the real spread is in the mix, and a 1.42 ratio is exactly wide enough to hide a carrier's actual position inside a container-count difference. Any comparison that does not reduce to cost per TEU is not a comparison. The twenty is now the most expensive way to ship air on this lane: if the cargo fits a forty and the weight ticket allows it, the best rate cut available this month is a piece of equipment, not a concession. Lock before the fifteenth. After that you are not negotiating a rate, you are accepting one.
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