February 3, 2017

Transpacific Eastbound Market Update


To Our Valued Customers: 


Market Conditions – What’s Happening with Capacity and Demand?   Space conditions for the few weeks prior to Lunar New Year were extremely tight.  In fact, we haven’t experienced space conditions like that since 2009-2010, when carriers artificially reduced capacity by parking vessels all over the world.  Space conditions are expected to slightly improve over the next few weeks as factories begin production following the New Year holiday, but by March we expect space to tighten again.

Blank Sailings:  Carriers have confirmed a series of blank sailings starting in Week 5 and extending through Week 8.  The removed capacity as a result of these blank sailings exceeds the cuts from previous years, and according to SeaIntel (reported in the Journal of Commerce, February 2, 2017), carriers are collectively removing 27% of capacity in week 5, 19% in week 6, and 4% in week 7 – all significantly more than in 2016. 

General Rate Increases:  With space conditions so tight, carriers have been largely successful in driving the spot market up to levels not seen since 2015.  Carriers have filed an additional GRI for March 1, 2017 in the following amounts: $540/20’, $600/40’, $675/HQ, $760/45’.

Demand:  The current situation regarding space is not simply a capacity issue.  The industry at large is experiencing higher demand than had been anticipated, with importers reacting to strong retail sales in Q4, 2016 as well as robust inventory replenishment.  Demand is so strong that forward bookings post-CNY are above expectations. 

Carrier Alliances:  As a reminder, new Carrier alliances are largely set to start April 1, 2017 as follows:


          THE Alliance:        Yangming, KLine, NYK, MOL, Hapag Lloyd (UASC)

          Ocean Alliance:    COSCO Shipping, OOCL, CMA (APL), Evergreen

          2M:                       Maersk (Hamburg-Sud), MSC, Hyundai (limited slot charter participant only)

          Non-aligned:         Zim, Wanhai, PIL, Korea Line

As we get closer to the April start date for these new alliances, we at Laufer are in the process of studying the new networks to analyze revised direct calls and port pairs, review partner capacity, and better understand transit time adjustments so that we can work with all our customers and help prepare them for the upcoming changes.

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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