Forwarders are struggling to maintain profitability in the face of collapsing freight rates as customers demand prices close to the spot market, reports Newark's Journal of Commerce.

"It is not fun at the moment," said a Hong Kong-Shanghai forwarder. "Even if someone charges US$50 less per FEU, I have to match it or the business will go elsewhere."

Said DB Schenker North/ Central China manager Joerg Hoppe: "Then, a theoretical US$50 profit margin on a $250 rate equals 20 per cent of the total quote to a customer.

"That is a significant impact. Whereas on a $1,000 rate, the same margin represents only five per cent," he said.

Traditionally tight profit margins are being squeezed even more, especially on the Asia-Europe trade where the spot market reach record lows each week.

"That makes it very difficult for us to build in our usual margin. We recently secured a shipment from Shanghai to Hamburg at $300 per 40-foot-equivalent unit, and I can tell you that there is not much going into my pocket from that deal," he said.

The forwarder complained there was so much quoting and bargaining as lines tried to fill their ships at any price, that much of his time was taken up in matching quotes.