November 29, 2018
Cargo volumes remain very strong, with a majority of service lanes at full capacity. The current strong demand will continue until at least early December as shippers do their best to avoid the potential January 1 third-round tariff against China on an additional 5,700 HTS classifications. Freight not already on the water by the third week of November will have little chance of beating the tariff if final destinations are East or Gulf Coast ports moving via all water services. Freight from China to West Coast ports will have until early December to beat the clock and avoid the 25% tariff.
Extra vessel Loaders
Several ocean carriers have announced extra loaders to West Coast ports to meet the high demand from order advancement and temporary supply chain routing shifts from East Coast to West Coast ports due to January 1st tariffs. An additional 57,610 TEU of announced capacity is available to the market from November 7 to November 27 over 15 vessels. Additional capacity figures for vessels sailing at the end of November have yet to be released to the market. Only three of the extra loaders will service East Coast ports while the remainder will move on the Pacific Southwest.
Market rates reach high water mark
The rate gap between West Coast and East Coast is typically around $1,000 per 40 ft. container. However, with the high demand for West Coast services, the gap is currently well below the standard and is not reflected by the below graph as figures did not include the November 1 general rate increases implemented in the market. One should expect further gap erosion, possibly to levels unseen in the market, into December.
Traffic Mitigation Fee (TMF) replacing Pier Pass Program effective November 19th
Import and export containers received or delivered at Long Beach and Los Angeles terminals during all operational gate times will be subject to the Traffic Mitigation Fee (TMF) of $31.52 per 20 ft. container and $63.04 for all other container sizes. The TMF is administrated and exclusively collected by the terminal operators. Cargo owners are responsible for payment prior to delivery or pick of containers from the respective terminals.
Please contact your Laufer sales representative if you have any questions on the new TMF.