Supply Chain Action Points
Read this first — the conclusion, and the moves to make:
- By 17 July, pull every booking with a sailing date on or after 15 July and get written confirmation of whether the FAK applies on bill of lading date, sailing date or gate-in date; the three can sit three weeks apart.
- Re-express the U.S. GRI as a percentage of your own base rate before approving anything: $2,000 is 100% of a $2,000 base and 40% of a $5,000 base, and the filing supplies neither.
- Flag every SKU where the ocean leg exceeds 8% of FOB value at $7,000 per 40ft; at 18 tonnes a box that is $0.389 a kilo against $0.258 at the index print, and those are the accounts to re-quote first.
- Do not fix twelve months at a FAK more than 40% above the index print; at today's 51% gap, buy three months or index-linked and reprice at expiry.
- Before contesting the increase, cost the alternative routing including inventory days; if the alternative is cheaper all-in, the argument becomes arithmetic rather than commercial.
Carriers pushed through higher FAK rates effective July 15, with CMA CGM announcing $7,000 per 40ft on Asia–Europe and $7,900–$8,500 for the Mediterranean, while several lines planned general rate increases of $2,000–$3,000 in the U.S. market. The moves came as Drewry's WCI hovered near $4,639 per 40ft and spot rates stayed well above early-March levels.
The Analysis
Three filings landed in the same week and they do not belong on the same table. CMA CGM put $7,000 per 40ft on Asia–Europe effective 15 July, $7,900 to $8,500 per 40ft on the Mediterranean, and several lines queued general rate increases of $2,000 to $3,000 per container into the U.S. market. Drewry's World Container Index was hovering near $4,639 per 40ft while all of that was being announced.
Put the first two numbers side by side. The Asia–Europe filing sits about 51% above the index print for the same box, in the same week. That gap is not a contradiction and it is not a scoop. It is the difference between an asking price and a transaction price, and it is the only part of the announcement that carries information.
The rest is arithmetic nobody publishes. Here is how I read the three filings, and where the money actually moves.
Start with the Mediterranean band. A range of $7,900 to $8,500 is a $600 spread, 7.6% of the bottom of the range, published by one carrier for one trade on one day. A carrier that quotes a range instead of a number is telling you the number is not settled. The top of the band is for the shipper who calls on 14 July; the bottom is for the one who calls with volume and a fallback. If you were quoted $8,500, you were placed at the top of a range the carrier itself published, and you paid $600 a box for the privilege of not asking.
The U.S. filings are worse behaved. A GRI of $2,000 to $3,000 per container is an increment with no base attached. On a $2,000 base it is a doubling; on a $5,000 base it is 40% to 60%. The announcement never carries the base, which means the percentage everyone reports back to their CFO is a percentage of a number they guessed. There is a second unit trap inside it. If the GRI applies per container rather than per TEU, a 20ft pays the same absolute increase as a 40ft, so the per-TEU increase on the 20ft is double. Dense cargo that fills a 20ft before it reaches the weight limit, the cargo with the least routing flexibility, takes the heavier hit per unit of goods.
Now put it on a kilogram. Assume, and this is my assumption rather than a number from the filing, a 40ft carrying 18 tonnes of cargo. At $7,000 the ocean leg costs $0.389 a kilo. At the $4,639 index print it costs $0.258. The difference is $0.131 a kilo. If the goods are worth $4 a kilo FOB, that increase is 3.3% of goods value and somebody absorbs it between the factory gate and the shelf. If the goods are worth $1 a kilo, the same increase is 13.1% of goods value, and it does not get absorbed, it gets refused. Same announcement, same box, two entirely different conversations.
The effective date is where most importers lose money this week, and it is not the date on the press release. A FAK effective 15 July applies to whatever the carrier's billing rule says it applies to: bill of lading date, sailing date, or gate-in date. Those three can sit three weeks apart. Cargo gated in on 12 July and sailing on 19 July is a different invoice under each rule. If your June bookings were confirmed at a rate, check whether the confirmation says rate or rate to be advised, because the second one is not a rate. This is a ten-minute check with a five-figure answer in a normal month.
Who feels it first. Spot cargo on a low-value, heavy mix, moving in 20ft, with no annual contract, gets all three effects at once: the higher absolute number, the doubled per-TEU increment, and the highest share of goods value. Who barely notices: an annual contract with a fixed all-in and a formula-based bunker adjustment, on cargo where freight is under 2% of landed cost. For that shipper this week is a line in a monthly report. The distribution of pain is not about company size. It is about contract structure and value density, and a mid-sized shipper with a fixed all-in is better protected than a large spot buyer.
Two things the coverage did not do. Nobody compared the three filings to each other. $7,000 on Asia–Europe against $7,900 to $8,500 on the Mediterranean is not a distance premium; it is $900 to $1,500 per box that has to be explained by something else, and the only candidate in the announcement is space. If the Mediterranean premium holds while the Asia–Europe number softens, the tightening is regional rather than systemic, and your Europe contract should be priced separately from your Med contract. The other omission is that a published FAK is a tariff line, not an invoice. It covers the ocean leg. Terminal handling, equipment, and whatever peak season instrument is running all sit outside it, so the comparison everyone makes, FAK against index, sets two things side by side that were never the same product. The honest comparison is this month's all-in invoice against last month's, line by line.
Suppose the carriers had not filed. Would the money have stayed with shippers? With the index already at $4,639, no. The cost would have come out somewhere else: rollovers at the load port, space allocated to whoever bids last, free time quietly shortened at destination. A published increase is at least a price you can argue with, budget against, and pass to your customer with a date attached. An unpublished one arrives as a service failure, and you learn what it cost three weeks later.
Where I would draw the line. When a carrier's FAK quote sits more than about 40% above the index print, do not fix a twelve-month contract at that level; buy short tenor or index-linked and keep the option. When the gap compresses under about 10%, fixing is cheap insurance and I would take the tenor. Right now the gap is 51%, which is the worst of both worlds: too wide to fix, too wide to ignore. And a rate that arrives with a press release can leave the same way. The index will never send a press release, which is precisely why I trust it more than the filing.
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