Transpacific Eastbound Market Update
January 8, 2018
To Our Valued Customers: Happy New Year!
Market Conditions - The traditional cargo rush prior to Chinese New Year is in full swing with capacity tightening on most service lanes. Ocean carriers are requesting bookings well in advance to secure space and EQ. Market rates increased on January 1st and ocean carriers have two additional increases filed within their tariffs (see GRI schedule below) before the holiday in China on February 16th. We can expect capacity to remain tight until the holiday and possibly beyond as carriers pull capacity due to lack of demand during the late February early March time period.
In the domestic market high demand for trucks has continued into the New Year. Demand is far outpacing supply pushing up rates in both the over the road and drayage markets. The new requirement for ELDs and severe winter weather conditions in both the Midwest and East Coast are also putting pressure on the already tight capacity. We expect demand to remain strong for the foreseeable future as overall market volumes remain strong.
Blank Sailings – As expected carriers are just starting to announce their post Chinese New Year blank sailing schedules and as of today only The Alliance was provided a schedule, below are the port skips for reference;
- The Alliance PS6 skip Qingdao February 22nd
- The Alliance PS7 skip Xiamen February 24th
- The Alliance PS5 skip Shanghai March 2nd
- The Alliance PS7 skip Xiamen March 3rd
- The Alliance EC3 skip KaohsiungFebruary 23rd
- The Alliance EC2 skip Qingdao March 4th
- The Alliance EC3 skip Kaohsiung March 9th
General Rate Increase - Ocean carriers rate increase effective January 1st was mitigated from the initial $1000/40’ on average filing by various ocean carriers however a significant increase was pushed thru due to increasing demand. Additional GRI filings were made by all ocean carriers with effective dates of January 15th and February 1st at varying levels and mitigation is a certainty however market demand will dictate how successful the ocean carriers will be on increasing rates prior to CNY. The average increases are below for reference;
January 15, 2018 proposed GRI - Average increase filed is 850/40’
February 1, 2018 proposed GRI - Average increase filed is 900/40’
2018 1st Quarter BAF & LSF:
2018 1st Quarter BAF tariff amount (Jan 1 - Mar 31)
WC $303/ 336/ 378/ 425 (increase by $22/24/27/30 from last quarter)
IPI $497/ 552/ 621/ 699 (increase by $55/61/68/77 from last quarter)
EC $581/ 645/ 726/ 817 (increase by $44/48/54/61 from last quarter)
2018 1st Quarter LSF tariff amount (Jan 1 - Mar 31)
WC/IPI $26/29/33/37 (increase by $7/8/9/10 from last quarter)
EC $10/11/12/14 (previous quarter LSF was $0)
Our #1 priority as always is to help maintain our customers’ competitiveness, to keep your cargo flowing as quickly and as consistently as possible, and to continue to communicate effectively along the way. Our nimbleness, market awareness, and “Built Different” philosophy enable us to do this - as your partner.
Thank you very much for all your support.
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