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Transpacific Westbound Market Update

January 2018

 

To Our Valued Customers: 

 

Market Conditions Space conditions for US exports on the Transpacific trade from the US East Coast remain favorable.   However, there has been a bit of tightening up in the Pacific Northwest. We expect short term challenges with vessel space due to Chinese New Year and void sailings..

 

Chinese New Year:  Chinese New Year is February 16, 2018.  The New Year’s celebration lasts for 1 week; however, factories are generally closed for 2 weeks.   Cargo will not be cleared or delivered during this time.    Please consult with your Laufer Export specialist to find sailing schedules that meet your needs.   The standard equipment free time in China is 14 calendar days.

 

General Rate Increase:  The Asia Export GRI can keeps getting kicked down the road.   What started on October 1st has now been postponed monthly and announced for March 1st.     This GRI has been filed in the below varying amounts.

                                20’- $ 50 - $ 80     

                                40’ - $ 100- $ 150

Most carriers seem to be postponing till 3/1 except for areas of heavy congestion such as Ho Chi Minh and Manila.  

 

Electronic Logging Devices (ELDs):  The Electronic Logging Device mandate took effect on December 18th,. Truck drivers are be required to have ELD's fitted to all commercial vehicles and will no longer be allowed to maintain paper/manual logs of their hours; this change is not cutting driving hours rather enforcing the regulations already in place.   We have encountered a lot of issues and increases on rates, especially on longer haul.

  • Infrastructure and congestion
  • Fewer entrants into the job market
  • Increasing cost of operations
  • High service demand (hazardous, refrigeration, other special cargo)
  • Limited free times at US and Canadian rail ramps

All of these challenges make on-time door pickups increasingly difficult, increase the risk of demurrage, detention, storage and dry run charges for the account of the cargo and exert continuing upward pressure on drayage rates.

In order to try to alleviate the situation, Laufer is encouraging customers the following recommendations for your consideration:

  • Plan production schedules as far in advance as possible
  • Accepting cargo upon arrival at origin rail ramp
  • Establish 24/7 flexible receiving times

Understand the impact of government regulations to your delivery expectations

 

The One- The three existing Japanese carriers(NYK,MOL and K-line) are merging to form a new company-The One and they begin operations on April 1st. We have already experienced losses of key personnel from the existing 3 lines as they hire for the new company.

   

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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