Market Letters

Transpacific Eastbound Market Update – Week 47, 2021

Market Conditions – As expected, capacity is tightening again on all lanes due to the onslaught of blank sailings announced in the market through the end of the year. We are beginning to see new booking acceptance pushed on average well into mid-December. Reports are circulating that ocean carriers will start releasing additional USIPI capacity as rail congestion eases and local port congestion in Southern California continues to suffer with delays. However, we have yet to see any policy change from the ocean carriers as USIPI bookings continue to remain difficult to procure unless on booked on high premium rate services. 59 combined blank sailings and port omissions have been announced on TPE services through the remainder of the year and with the start of Chinese New Year on February 1st, expectations are for a very busy start to the 2022 shipping season.  


Market Rates – The table is set for a December 1st general rate increase on FAK rates and market conditions are pointing in this direction. Following October’s Golden Week holiday, most carriers have held FAK rates in check and there has even been some downward pressure on rates over the last couple of weeks, primarily into the PSW. Carriers announced GRI amounts of $1,000 per 40’ effective December 1st. With so many blank sailings combined with an early CNY, a December 1st GRI seems likely to be implemented for the full quantum. We can expect continued upward pressure on FAK rates through Chinese New Year, with potential for an additional spike on premium rates as we move into January.  


USIPI Gray Area, Premium or FAK Rate – Though many ocean carriers significantly increased their FAK rates through the summer to inland rail destinations by huge quantum increases, ($2,000-$3,000 a month to some destinations) the increases were not as transparent to the market when compared to port rate increases. We also saw many cases, when carriers were pressured to keep rate increases in check, that port FAK rates were held flat while USIPI rates continued to increase sharply. Fast forward to today’s market and the gap between one ocean carrier’s FAK rate and another carrier’s premium rate might be surprising. Importers might be under the impression that all rates being tendered are on premium but are in fact just a carrier’s inflated FAK rate. For instance, with some carriers the gap to Chicago on FAK versus premium can be less than 10%. Bottom line, inflated USIPI rates will unfortunately continue well into 2022 if not through early 2023.  


Rail Congestion Improves, Delay Depends on Destination – In terms of average dwell times, rail congestion has seen great improvement at major inland rail hubs such as Chicago, Kansas City, Memphis, and Dallas. For instance, the average rail dwell from Southern California is now around 7-10 days where a couple of months ago it was 15-20 days, with some containers sitting for over 2 months before finally being dug out and making it onto to a train. Selection of destination ramp continues to be vitally important. Be mindful that only major rail hubs are seeing the improvements, smaller  intermediate rail destinations are still experiencing well above average rail departure delays.  


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