To Our Valued Customers:
We know the situation impacting all of us is evolving hourly it seems, we wanted to continue to advise you all of what we are seeing and experiencing in the market. At Laufer, we are committed to providing you with as much information as possible as quickly as possible, understanding of course that the events are quite fluid and changing rapidly.
So here is a shortlist of what we are seeing so far today:
Market Conditions: We are currently booking late May and early June departures from the US East Coast. West Coast space is bookings approximately 2 weeks out. Vessel space is at a premium due to vessel cancelations from COVID-19. Ocean carriers are in a perilous financial position due to lack of volume and canceled sailings. While we do not expect another Hanjin situation, six of the top eleven ocean carriers have negative working capital which means current liabilities exceed current assets. Your Laufer team is actively monitoring this situation and will provide guidance when and if necessary.
Blank Sailings: Blank sailings are going to be the new normal throughout the second quarter with carriers announcing blank sailings into July! Ocean carriers are voiding more sailings as they attempt to keep the supply in line with demand.
Inland Container Shortage: Due to the lack of imports into the US, we are seeing a shortage of equipment in some inland locations. The West Coast and East Coast ports have an adequate supply of equipment. We expect some inland locations to struggle with container availability until the import volume improves.
General Rate Increase: Ready or not here they come, ocean carriers have announced GRI’s on May 1st, May 15th and now June 1st. Initial indications have GRI amounts at $80 per 20’ and $100 per 40’. We may be beginning to see erosion in the GRI’s. We will update further next week.
Panama Canal: The Panama Canal Authority has announced new fees to protect the water environment and maintain services for canal passage. Ocean carriers have announced a surcharge of $ 30 per container.
APL Narrows Scope: APL will focus on the Trans-Pacific trade and pull out of the Middle East, India and Latin America trade lanes over the next 3 months. The allocations on the vacated trades will shift to APL parent company CMA.
HMM Algeciras: Hyundai has launched the world’s largest container ship at 24,000 TEU (twenty-foot equivalent units). This is the first of twelve 24,000 TEU vessels Hyundai has on order. The HMM Algeciras will be deployed on the Asia to Europe trade lane.
Philippines: The lockdown for COVID-19 has been extended to May 15th in the capital Manila. Manila is still experiencing a slowdown in customs clearance and back log of containers.
Vietnam: Vietnam has begun easing their nationwide lockdown.
Malaysia: Malaysia has extended its Movement Control Order through April 28th due to COVID-19.
India: India extended the world’s biggest lockdown until May 3rd. Indian port congestion is becoming a major issue with a buildup of containers that are not being cleared and delivered in a timely manner.
Bangladesh: Port of Chittagong is beginning to move containers to private off-dock storage to relieve congestion. However, the port still has severe congestion and carriers are implementing a congestion surcharge ranging from $1000 – $1500 depending on the ocean carrier.
Singapore: Singapore COVID-19 lockdown extended to June 1st with the exception of those providing essential services.
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.