The service contracting season in the eastbound trans-Pacific had barely wrapped up in late May when shippers and non-vessel-operating common carriers were unexpectedly hit with two general rate increases. Spot rates from Asia to the West Coast increased almost 50 percent to $2,132 per FEU and East Coast rates increased about 10 percent to $2,738 per FEU through early June. Rolling of shipments at Asian ports was common as vessels were booked beyond 100 percent utilization. How did this happen when US imports from Asia in May were 18.5 percent lower than in May 2019, according to PIERS? NVOs say carriers reduced capacity through blank sailings more than necessary so they could fill ships and increase freight rates. Carriers said they had no visibility into purchase orders that retailers had placed in Asia, and still have no visibility into peak-season volumes that will begin moving later this summer. Meanwhile, the dramatic swings in cargo volumes, and carriers’ penchant for blank sailings, is making it difficult for shippers and NVOs to plan their supply chains. Terminal operators, warehouses, and truckers are struggling to plan their capacity requirements.
In this essential webcast, Jonathan Gold of the National Retail Federation and David Bennett of Globe Express Services will explain what the market should expect in this volatile environment leading up to the peak season.