Transpacific Eastbound Market Update
May 1, 2018
To Our Valued Customers:
Market Conditions - Freight volumes were slow to recover after Chinese New Year however the lull seems to be over as April bookings look fairly strong market wide. Congestions in the Canadian gateways are finally easing with both Vancouver and Prince Rupert seeing vast improvement in comparison to February and March where delays averaged anywhere from 4 to 7+ days on intermodal containers. Many shippers diverted cargo flows thru US PNW or PSW gateways are slowly migrating back due to the market cost savings routing cargo over Canada however with the pending CP strike it might best to leave current routing alone until an agreement is in place. What we experienced with terminal congestion in Canada and now with a possible work stoppage with the CP rail is another example on the importance of having multiple gateways within your supply chain to quickly adapt to market disruptions.
Blank Sailings – ONE/Hapag Lloyd > PS4 service to skip Hong Kong on 4/14, PS7 service skip of Yantian on 5/4, PIL > ACS/AAC3 skip Qingdao on 4/16, Shanghai on 4/19 and Ningbo on 4/20. The services mentioned are direct calls into Long Beach/Los Angeles and Oakland.
Shanghai & Ningbo port skips and delays due to fog – Long berthing delays and slower terminal operations have caused havoc in North Central China ports of Shanghai, Ningbo & Yangtze river ports and even with improving conditions as of Mid-April the congestion is expected to continue for the next few weeks.
PierPass new appointment system and flat fee program – To increase flexibility and reduce trucker congestion that occurs before the off-peak night shift begins the members of the West Coast MTO agreement (WCMTOA) which consists of the 12 marine terminal operators and two adjacent ports will implement a Traffic Mitigation Fee (TMF) for all import containers regardless on when the containers are picked up from the terminals. The current TMF will be reduced to a new flat fee of $31.52 per TEU. The effective date is August 2018.
Trucking and ELD Update - The three-month law enforcement grace period came to end on April 1st and any dray carrier not equipped with an electronic logging device can face fines, be placed out of service until compliant and have points added to their compliance, safety & accountability records. Shippers that are currently negotiating long term fixed rate contracts for the 2018 shipping season are reading the fine print closely as the days of having a fixed rate valid for the term of the contract are in most cases now in the rearview mirror. Ocean carriers and forwarders alike are introducing verbiage to protect against last mile rate increases due to terminal congestion, seasonal capacity shortages, layover charges, reduction in free unload wait time and other potential additional costs that might impact dray carriers electronic time card while on the road. The capacity shortage is not expected to improve in 2018 and we recommend to the shipping community to review your last mile requirements closely as making your deliveries attractive over others can go a long way in this new market place.
General Rate Increases announced in the market - May 1, 2018 of $1000/40’
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