Market Conditions – Just when we thought it couldn’t possibly get any worse, the month of May is expected to surpass April in terms of lack of capacity and equipment throughout the Asian Rim. Many service lanes are booked solid through May. US Gulf and East Coast services are extremely short of capacity and “premium rate service” is currently the only capacity available from the ocean carriers. Shippers moving to inland rail destinations are also facing a dire situation as ocean carriers continue to restrict US inland rail destinations to expedite equipment turn-times back to Asia.
As of Thursday, April 29th, 19 container vessels wait at anchor off Southern California and 10 vessels wait in Oakland, CA. It is inevitable that we will see additional blank sailings announced in the coming weeks due to the ongoing congestion. The port of Savannah is also continuing to see port congestion with 7 container vessels at anchor.
Market Rates – A substantial general rate increase is being implemented across the market effective May 1st. Depending on the ocean carrier, average increases are between $500-$1000 per 40’. Premium rates to USEC ports and Gulf Coast jumped significantly in April as blank sailings removed a significant amount of capacity from the marketplace. Rate levels exceeding $12k-$13k have been commonplace. Any increases on general FAK rates are largely inconsequential as premium rate capacity is generally the only option available for any new bookings with departure dates in May.
Restrictions on US-IPI Increase Transloads in Southern California – Due to the ongoing equipment shortages, ocean carriers are currently limiting the amount of available capacity for inland rail destinations. Some carriers are simply limiting capacity only to importers willing to ship on premium rates, while other carriers are temporarily advising that space is unavailable and rejecting booking requests. The lack of capacity is driving the transload market up sharply. This will continue for the foreseeable future as shippers frantically look for alternatives to keep product flowing into their distribution centers.
Dray Capacity & Chassis Shortages – The continuing import surge is applying maximum pressure on chassis availability in major inland rail hubs across the country. Areas such as Chicago, Dallas, Memphis, and Kansas City are feeling the brunt of the shortages. Dray carriers are also experiencing capacity constraints. Many require 30-day notification on delivery orders which is quite challenging in today’s market due to vessel and terminal congestion delays. Nothing is easy in today’s import marketplace.
For over 70 years, Laufer Group International Ltd. has been helping customers improve the way they handle their logistics. To see how we can help, or for any questions, contact Brian Martorano, National Director of Business Development, Ocean Import or contact your local sales representative.