Transpacific Eastbound March Update
To Our Valued Customers:
Part of why Laufer is “Built Different” is knowing what situations in the logistics and supply chain business will affect your bottom line. Below is a quick review of some recent market updates on the Transpacific Eastbound Market. At Laufer Group International, we’re here to help you navigate any issues you encounter and find solutions which provide the least impact to your business. Contact your Laufer sales representative for any inquiries or assistance.
The terminal and rail departure delays are finally starting to ease at the hardest hit gateways such as Southern California and East Coast ports. East Coast ports were more sporadic with terminals in New York such as APM having lengthy rail departure delays and terminal congestion whereas terminals a stone throw away such Maher faced less congestion, especially on rail departures. Chassis shortages at inland rail depots were also affected with ramps such as Memphis facing a scarcity of chassis resulting in rail demurrage and detention charges.
Results of the tariff increase scare back on January 1st and the congestion that followed is now being realized as invoices generated by the cargo rush are hitting shipper’s mailboxes raising questions on how prevent or limit these normally controllable expenses in the future.
The traditional slack season trough which is possibly sharper due to the cargo rush this past November and December is clearly at its peak. The Chinese New Year cargo rush was very tame in comparison to previous years for the same reason as warehouses are full of product from the tariff scare. Ocean carriers only deployed a handful of extra loaders in the market before factories shut down for the holiday break which was a clear sign of the lack of demand.
A tremendous capacity reduction due to blank sailings following Chinese New Year have now returned to normal rotations quickly resulting in downward market rate pressure as container volumes will be slow to recover. We expect the downward pressure to continue until at least the 2nd half of March.
Blank sailings in March & April
Ocean carriers are in the midst of announcing another large market capacity withdrawal for the end of March thru April to stabilize the rate market by closing the gap on supply/demand. It’s a critical time of the year for ocean carriers as long-term fixed rate negotiations being in earnest. The majority of negotiations start during early March as the Transpacific Maritime Conference in Long Beach, CA represents the starting bell.
Tariff talks remain positive between Washington & Beijing
Trade negotiations continue to move in a positive direction as Washington has yet to announce an effective date on the proposed additional tariff increase covering a much larger product base. The tariff increase has now been postponed twice since being formally announced last year. The US administration will most likely not set another effective date unless talks stagnate and between both countries.