Asian container shippers, which slogged through their worst-ever year in 2009, could be headed for a smoother ride after a surprise upswing in volumes and freight rates this year propelled major routes back to profitable levels.

Restocking by retailers late last year as the global economy stabilised and shipping firms taking vessels out of service to help ease oversupply have fuelled freight rates.

European routes have largely returned to profit with freight rates from China to Europe rising to nearly $2,000 including fuel surcharges for a twenty foot equivalent unit (TEU) last month, versus $300, the lowest for a decade, a year ago.

Optimism that the shipping market has bottomed out lifted shares of Asian liners across the board this year with Orient Overseas (International) Ltd (OOIL) and South Korea's Hanjin Shipping rising about half.

The large number of new ships in the pipeline remains a major concern to the nascent rebound, although some deliveries have been delayed because of financing problems. Shippers have also slowed the speed of some vessels to absorb excess capacity and cut fuel costs, analysts said.

Exporters remain cautious on the strength of U.S. and European consumption after a leaden 2009 that saw shippers idle hundreds of vessels and agree to move cargo for free if customers paid fuel and terminal handling charges.

Boosted by China's strong exports, which jumped 46 percent last month, the China Containerised Freight Index (CCFI) which takes data from leading liners with operations in China, hit 1,168.31 points in February, its highest since 2007, and is now just 3.5 percent off that peak.

Asian container shipping companies are recovering after imposing several rounds of freight rate hikes, said Geoffrey Cheng, an analyst at Daiwa Capital Markets.

"The sector is in a cyclical uptrend and some freight rates have recovered to profitable levels," said Cheng. (Reuters)