Market Letters

Transpacific Eastbound Market Update – Week 29, 2021

Market Conditions – As we move into August, available capacity is extremely difficult to procure as the majority of vessels are over-booked through August.  This lack of additional peak season capacity, which the market is typically accustomed to, will be quite evident as freight is left at supplier factories due to lack of space. Ocean carriers continue to focus on port-to-port business and finding inland intermodal capacity is a challenge market wide.  The congestion at the Chicago UP ramps is a perfect example why ocean carriers are shying away from intermodal moves as equipment turn-times skyrocket due to the lack of chassis in the heartland rail depots.

Market Rates – The July 15th general rate went through as expected increasing FAK rates between $500-$1,000 per 40’ depending on port pairs.  40’ Southeast Asia premium rates continue to rise with West Coast levels nearing $15,000 and East Coast rates between $17,000-$20,000.  Intermodal and Gulf port rates are now at stratospheric levels with costs on either side of $20,000 depending on carrier.  We expect another increase on August 1st and it’s likely we see another $500-$1,000 per 40’ bump. These increases coupled with new ocean carrier congestion surcharges paint a picture of doom and gloom as costs are expected to skyrocket for the remainder of peak season.

Congestion Surcharges Effective August 1stSeveral ocean carriers have announced port and rail terminal congestion surcharges up to $1,000 per container effective August 1st.  MSC advised their filed congestion surcharge of $1,000 per container is based on discharge date of September 1st. ZIM Lines announced their $1,000 per container congestion fee will increase to $5,000 per container effective August 6th.

New Transpacific Capacity – Maersk Lines will launch two new services at the end of July with one service into Long Beach, CA, and another to the US East Coast ports of Norfolk and Baltimore.  This additional capacity is certainly welcomed, however due to the small vessel sizes (each between 3.5k-4.5k TEU), it will simply not be enough to ease current capacity shortages.  China United Lines and Bal Container Lines have also started services into the PSW. With large container vessel charters unavailable, small vessels that usually service Intra-Asia trades are now making the long-haul voyages to take advantage of the lucrative market conditions.

 Port Congestion on the Rise – Vessel anchor dwell times in July are averaging five days in Southern California and terminals are giving up recent gains due to the recent July 4th long holiday weekend.  Prior to that time, terminals had been reporting days at anchor down to 2 during the last days of June.  Congestion at ports in Central and North China have increased steadily and with an increase in COVID cases in Vietnam we expect terminal congestion to worsen over the next few weeks.

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.