Market Conditions: US Exporters continue to face challenging conditions executing their shipments on the Trans-Pacific trade. Though there appears to be more available vessel space than last month, the ability to secure empty containers has not improved. The biggest challenge continues to be the constantly changing port/rail cut offs and early return dates. Please see the carrier reliability scores graphic below for an eye-opening picture of their performance (or lack thereof).
West Coast Port Congestion: Extreme congestion continues to plague the ports of Los Angeles and Long Beach. LA/LGB combined currently have 40 vessels at the ports with 22 being worked. There are an additional 39 vessels sitting idle or anchored outside the ports. Below is a graphic representing the current situation:
General Rate Increase: Ocean carriers have announced upcoming GRI’s for August 15th and/or Sept. 1st on the Transpacific westbound trade. The amounts range between $100 and $200 per 40’ container.
Export Rail Surcharges: CMA announced, effective August 20th, an Emergency Rail Surcharge of $350 per container, applicable to all export containers that require motor or motor/ rail performed by the carrier. Similar action is expected by MSC in September.
ONE joins Overweight Rail Surcharge Club: The Rail Overweight Surcharge for all dry export cargo moving via rail amounts are:
20’ containers exceeding 19.95 metric tons is $80
40’ containers exceeding 23.58 metric tons is $80
Ocean carriers say “No Thanks” to Middle East Cargo: OOCL has suspended service between North America ports and Middle East destinations for vessel departures on or after August 15th. ONE has announced a September 7th GRI of $1,000 per 20’ and $2,000 per 40’ from USWC ports to Middle East ports. We expect others carrier to follow OOCL and ONE as they prioritize the Transpacific trade.
Except MSC: MSC is boosting their Middle East and IPAK network from the USEC. MSC is adding a 3rd Indus service to increase capacity on this trade.
Ocean Carrier Reliability Scores: Sea-Intelligence put together this fantastic graph on ocean carrier reliability. It speaks to the challenges US exporters have with the constantly changing ERD’s and rail/port cut offs. Only one carrier, Matson, had an on time reliability score over 50% in the April/May 2021 time period.
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 Marc Van Gorp, National Export Business Development Manager, or contact your local sales representative.