Market Conditions – The introduction of additional capacity via extra-loaders and new providers such as BAL, CCL and Sea Lead are providing welcomed relief to the PSW sub-trade for the remainder of peak season. Most of this capacity will unfortunately steam right into a flotilla of vessels at anchor off the Southern California coast. The number of vessels at anchor are approaching record levels and with ocean carriers continuing to limit USIPI capacity, we expect port the situation to only worsen over the coming weeks.
Market Rates – With an average increase of $500 per 40’, the August 15th general rate increase was minimal in comparison to past GRI’s. The market also saw a few carriers extending current rates through the end of the month for port cargo. USIPI destinations once again saw the largest increases with a couple carriers increasing rates between $1,000-$2,000 per 40’. Premium rates remain at stratospheric levels with South China 40’ rates averaging $15,000 to-$20,000 to the US West Coast. East Coast rate levels range between $16,000-$23,000 depending on the port of discharge. Ports with fewer direct calls such as Jacksonville, Miami and Baltimore and Boston are seeing the highest premiums.
Dray Rates Continue to Soar – As ocean carriers continue to restrict US inland rail freight, the downstream impact is now being realized as dray rates in and around the ports soar! Locations experiencing the highest jump in delivery costs include Southern California, New York, and Savannah port areas. Among the many challenges to managing costs in today’s market is a dray rate quoted several weeks in advance is often no longer valid when the delivery order is finally issued. This is occurring because dray carriers cannot control available capacity at time of arrival due to the various bottlenecks in the market. The market has seen dray rates increase by more than 50% for local deliveries while long haul drays have doubled in July. We only see the situation worsening in the coming weeks as the ratio of port versus inland rail continues to rise.
Ningbo Meishan Terminal Phased Re-Opening – Meishan will start a phased reopening on Wednesday August 18th and expects full operations by September 1st. Ningbo port operates 57 weekly services with Meishan terminal managing 8 on the Transpacific (5 x EC & 3x WC) and 6 Asia-Europe trade services. Approximately 50 vessels are at anchor off Ningbo as congestion was already in place before the terminal closure. We expect congestion and additional capacity constraints on all lanes for the next several weeks - the hits just keep coming!
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.