Market Letters

Transpacific Eastbound Market Update – Week 51, 2020

Market Conditions – Import volumes remain very strong and this trend is expected to continue through this coming February’s Chinese New Year.  The situation with capacity and equipment is still quite serious and the lack of equipment is causing cancellations and rolled bookings at many origin ports.  There are over 20 container vessels currently waiting to berth in Southern California. In developing news, the BNSF is reporting rail car shortages which could quickly develop into lengthy rail delays for inland destinations.  We expect escalation in the growth of supply chain bottlenecks across the country as terminal congestion, along with chassis, rail car and labor shortages due to the upcoming holiday season will further aggravate landside issues.  Throw in a few untimely Northeastern winter snowstorms expected this week and issues will surely continue to multiply.

Market Rates – The majority of carriers have extended current pricing through the remainder of December. However, MSC will push through a large increase due to strong demand for their Gulf and East Coast services.  The market has not seen an official market wide GRI implementation since early September.  As noted in our last update, ocean freight costs continue to increase on an ad-hoc basis depending on specific Asian origins and sailings where capacity and equipment shortages are severe.  It’s too early to speculate if ocean carriers will push through a general increase with the flip to a new calendar on January 1st year or will the fear of government intervention on the already sky-high ocean freight rates keep them at status quo?  Stay tuned….

Equipment Shortages in Asia – Ocean carriers have utilized extra-loaders and other westbound vessels to evacuate a large volume of empty containers from US ports during the month of November.  As reported by American Shipper, the Southern California port complex eclipsed 280,000 empty TEU shipped back to Asia. This represents an increase of 55% versus same period last year.  The continued growth in equipment evacuation will certainly help relieve some of the container shortages, however for the short-term it’s still quite a challenge to secure equipment.  Last week the ocean carrier Yang Ming, reported they were out of 40’ equipment in Yantian and would not have empties available until the weekend.  Vietnam, which, up until November was managing the strong demand quite well, is now reporting severe shortages, resulting in canceled and rolled bookings.  India is also facing severe equipment shortages and ocean carriers have responded by further restricting bookings.  Even with vessels departing from US and Europe loaded with a large number of empties, we expect equipment shortages to continue and only begin to slowly improve over the next several weeks.

India Import Delays Continue – Unfortunately, in regards to of equipment shortages, India is not on the short-list to receive an abundance of empty containers anytime soon.  India ports, such as Chennai and Tuticorin that utilize transshipment hubs are experiencing lengthy delays due to terminal congestion in countries such as Sri Lanka.  Due to operational constraints, mainline ocean carriers have reduced or temporarily suspended acceptance of new bookings during the month of December.  We recommend all importers communicate closely with their suppliers and logistics providers to explore all options over the next several weeks.

Severe Intermodal Bottleneck Expected – It was only a matter of time before rail car shortages would start appearing within the Southern California port complex. COSCO lines is reporting long delays on their intermodal departures due to BNSF railcar shortages for on-dock trains.  The shortage is forcing port terminals to utilize off-dock container storage yards and impacting several terminals including GGS, LBCT, PCT and WBCT.  Once containers are buried in a stack a lengthy delay is almost a guarantee.  We are receiving reports of dwell times measuring up to 30 days at some port terminals.  Expectations are for a larger percentage of containers to be ultimately delayed if the rail car shortage continues.

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