Market Conditions – The Chinese New Year freight rush is well underway. With approximately 25% of Transpacific weekly capacity removed from circulation due to port congestion, importers can’t turn the page fast enough on the 2021 shipping season. We have seen rail congestion ease significantly over the last few weeks with dwell times ranging a week or less in many cases. Dray capacity continues to remain in short supply with costs at historic levels in many regions such as Southern California, the Southeast and Northeast. We expect current conditions to continue through at least March as vessels are loading in Asia at maximum capacity in a rush to arrive US ports before CNY.
Market Rates – Carriers increased FAK rates on December 15th with a few carriers extending rates through the end of the year. Rate increases range from $500 to $1,000 depending on ocean carrier. Due to strong pre-Chinese New Year demand, we are seeing premium rates skyrocket once again after falling in late October and November. The most significant increases can be found om the premium rates to East Coast ports, however with several carriers announcing a reduction in local port cargo into the Southern California gateway we expect premiums to climb through January. Premium rates to inland rail destinations remain flat however USIPI didn’t see a dramatic drop off in cost after Golden Week, therefore costs are still near historical highs. We do expect rates to fall off after Chinese New Year, however it’s too soon to speculate on where market rates will settle post CNY.
Ocean Carriers Limit Southern California Port Cargo – Market rumors are swirling that ocean carriers will dramatically cut back on Southern California port bookings through January due to the severe port congestion while at the same time open back up acceptance of US inland rail routed cargo. This is a complete reversal of policy from only a couple of months ago when ocean carriers limited USIPI shipments due to the severe rail congestion at ports and inland points such as Chicago. Implementation of this policy will create a manufactured shortage of capacity and the market will see premium rates drastically increase in January and possibly beyond.
No Improvement on Southern California Port Congestion – New regulations have simply pushed the vessels waiting for a berthing window further out in the Pacific. Approximately 80 container vessels are waiting for a berth with an average dwell now approaching 30 days! We don’t expect to see any noticeable improvement until March at the earliest.
Asia Equipment Shortages Spike – Asia ports are experiencing equipment shortages due to the long roundtrip voyages and ports that depend on transshipment are suffering the worst of it. Shippers are recommended to utilize whatever size equipment is available or risking being placed in a booking queue until possibly February.
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.