Soaring container freight rates have prompted niche liner operator Ellerman City Liners to reactivate a service it was thought to have left for good.

The UK-based liner operator is to re-enter the trade between Asia and Europe, having pulled out of the business early last year when freight rates collapsed.

The subsidiary of freight forwarder Uniserve will enter the sector with two vessels on charter from Greek and German owners.

The 2,765-teu Cape Hellas (built 2021) and 2,464-teu Buxfavourite (built 1997) will be deployed in June and July.

They will offer direct voyages from Ningbo, China, to Da Chan Bay, Casablanca, and Tilbury in the UK.

One will sail on 16 June and the other on 12 July.

Ellerman will also offer connections to European ports including Cadiz, Bilbao, Setubal, Aveiro, Rotterdam, Teesport and Gdynia.

U-turn

The move marks a U-turn by Ellerman in a dynamic freight market.

Ellerman was one of a handful of new operators that took advantage of the pandemic-led container boom to enter the sector by operating their own liner services.

The company entered the trade between China and North Europe in late 2021 using a series of chartered vessels.

When freight rates normalised towards the end of 2022, the company took steps to exit the Asia-Europe trade.

Its chartered vessels transferred to what was then the more profitable transatlantic trade.

But freight rates on the trade between Asia and Europe have risen dramatically this year as liner operators avoid the Red Sea.

Spot rates from China to Europe have jumped to about $5,000 per 40-foot equivalent unit, but the longevity of the dramatic spike in freight rates remains uncertain.

Shippers could face several months of very elevated rates and increased delays, according to container booking portal Freightos.

The company expects demand to subside when this year’s peak season ends, possibly earlier than usual.

Monthly volumes are expected to be much lower than during the pandemic port congestion, Freightos added.

So the market should avoid the scale and duration of disruptions and rate spikes experienced in 2021 and 2022, it concluded.

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