Market Conditions – Transpacific Eastbound imports remain very strong with market wide booking forecasts near 100% through mid-December. Ocean carriers have announced extra loaders departing China before the end of the year which is a clear indicator that demand remains robust. The US landside issues are continuing and steadily worsening as outlined on last week’s Southern California Terminal Congestion update. Ocean carriers are now feverishly filing emergency surcharges adding additional costs on what seems like an endless parade of rising import costs since early summer. Container equipment shortages continue to worsen as turn times on equipment further slows due to terminal congestion at major ports around the globe.
Market Rates – The majority of ocean carriers extended current rates through the end of November. However, ONE, a major THE Alliance carrier, did unexpectedly take a minimum increase across the board. Wanhai which is considered a “niche carrier” on the Transpacific also pushed through a November 15th increase. As anticipated in our last market update, ocean carriers are shifting away from any substantial general rate increases on freight rates due to governmental pressures and instead looking at new surcharges to recover operational costs as detailed further below.
Ocean Carriers File Congestion Surcharges – With an adjustment to a pre-existing filing, CMA becomes one of the latest ocean carriers to file an emergency congestion/ equipment imbalance surcharge. Effective December 1st, CMA will apply a $350 per container surcharge on all off-terminal intermodal containers excluding the following destinations: Dallas, Chicago, Memphis, Kansas City, Columbus and St. Louis. All other inland points via LGB/LAX will be assessed a $350 surcharge as they require a truck move to access rail intermodal services. COSCO also just announced a $100 congestion surcharge which will be assessed as a prepaid charge at origin. It’s expected that suppliers are likely to push back this charge to the importer if the consignee is the party selecting the carrier. ZIM, Hapag-Lloyd and Hyundai each filed surcharges last week with varying amounts and conditions. As of now, ZIM Lines is the only carrier to file an across the board equipment imbalance surcharge of $250 per 40’ and 40’HC containers, applicable to all destinations in North America and the Caribbean. Please reach out to your sales representative for more details or contact our corporate office at firstname.lastname@example.org.
Equipment Shortages – As equipment turn times increase so does the scarcity of equipment, especially 40’HC containers which is the most utilized piece of equipment market wide. Ocean carriers are recommending shippers utilize 20’ containers which are still readily available at many origin ports in Asia. For many shippers this is a last-ditch effort since utilizing a small cube container will increase costs when taking into consideration all of the landside accessorial charges right now in the market coupled with historically high freight rates. Speculation continues on when the surge will slow, stay tuned…