August 24, 2017
Transpacific Eastbound Market Update
Market Conditions – What’s Happening with Space? Space conditions in the Transpacific trade for late August and into September continue to be tight, especially in South China and Southeast Asia to the US West Coast and IPI points via the West Coast. We anticipate the six weeks between now and the October 1, 2017 National Day Holiday in China to be this year’s most challenging in terms of space and equipment availability, and carriers are forecasting that strong demand conditions will continue well into October to possibly early November.
General Rate Increase: Carriers have filed a General Rate Increase (GRI) for September 1, 2017 in the amount of $720/20’, $800/40’, $980/HQ and $1015/45’. We expect this increase to go into effect, but at a mitigated level closer to $500-$600 per 40’ container.
Peak Season Surcharges: The Peak Season Surcharge went into effect on August 15, 2017. Should space conditions worsen carriers may increase the amount of the Peak Season Surcharge or impose a Second Stage Peak Season Surcharge for mid-September. Already one carrier, Hyundai Merchant Marine, has filed a Second Stage PSS to be effective September 15, 2017 and other carriers may follow.
Typhoon Hato and South China: Typhoon Hato has significantly disrupted freight operations in Hong Kong and South China. Most businesses in Shenzhen, Macau, and Hong Kong were forced to close on August 23 and have yet to reopen. We expect this to cause delays in bookings, documentation preparation, export Customs, and vessel operations in Shenzhen and Hong Kong through the weekend. Space conditions were already challenged in South China and we expect the typhoon to make the situation worse as we enter September.
BRICS Summit Update: The 9th BRICS Summit will be held in Xiamen, China from September 3-5, 2017. We have learned that the government has requested certain factories in the Xiamen area to close during that time. Additionally, the government has imposed truck restrictions and road closures from August 31-September 6. Even our partner offices in Xiamen will be forced to close from September 4-5. For those customers importing from Xiamen, please be mindful that the first week in September may be a challenge getting freight to the port of Xiamen and out of China, and you may have to push shipments forward or back to accommodate the government restrictions.
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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