Market Letters

Transpacific Eastbound Market Update – Week 15, 2021

Market Conditions – Capacity remains extremely scarce due to approximately 21 blank sailings in April.  Twelve West Coast and eleven East Coast services have been scratched due to vessel delays.  A considerable number of the blank sailings are a result of the ongoing Southern California terminal congestion. However, impact from the Suez Canal incident is now being seen as evidenced by a substantial reduction in capacity for the remainder of April.  A significant amount of market demand will be left stranded at the factory which will set the stage for a chaotic start of this year’s shipping season that historically starts on May 1st with the commencement of new annual long-term fixed pricing contracts.

Market Rates – Most carriers have extended their standard FAK rates through April however, due to capacity limitations, new bookings are facing a surge of premium rate only service options.  Bookings to the USEC have seen a sudden rise in premium service costs due to the increased number of blank sailings in April.  When it comes to premium charges, Vietnam continues to be the most affected origin point with costs ranging between $2000-$3000 per 40’ on top of already historically high FAK rates.

Ocean carrier restrictions on US inland rail bookings continue, leading to increased premium service rates that vary depending on destination.  US inland destinations that have a higher ratio of export volume are faring much better than areas without.  As many vessels are already booked solid through the middle of next month, we expect FAK rates to remain at historically high levels and premium rate options to continue through May.

Ocean Carriers Limit Long-Term Fixed Rate Contracts – As service integrity hurdles continue to plague the industry, ocean carriers are limiting fixed rate agreements throughout the marketplace.  Beneficial cargo owners and forwarders alike are feeling the squeeze on securing an adequate level of allocation for the upcoming shipping season, leaving very little room for negotiation on freight rate levels.  Ocean carriers will have a tremendous amount of leverage over the market for the foreseeable future and, with FAK and premium rates at historical levels, carriers find little value on overcommitting on long-term fixed rate contracts.

Chassis Shortages Continue – We continue to see sporadic chassis shortages throughout the lower 48 with many of the inland destinations that rely on rail chassis pools impacted hardest.  The chassis delays are having domino effect delaying deliveries and returns of empties at shipper distribution centers.  Southern California saw a record throughput of volume in March, therefore expect the chassis shortages to continue through at least May.

Please contact your local sales representative for additional information and service options during these challenging times in the Transpacific trade.  Please check out for more market Insights.