Shippers may have enjoyed a brief respite as they closed year-end inventories and celebrated the holidays with family and friends. But, with a New Year comes a fresh shipping cycle – and rates are already on the move.
Spot rates from Asia increased across the board as we brought in 2018 and the industry has begun bracing for the Lunar (Chinese) New Year holiday:
- Asia – U.S. East Coast (up 22.6%)
- Asia – U.S. West Coast (up 29.4%)
- Asia – Mediterranean (up 23.8%)
- Asia – Europe (up 8%)
Unlike 2017, retailers pushed hard against inventory glut and with strong consumer demand, managed to enter 2018 with lean inventories that will need replenishment, soon. In addition to healthy demand, the Lunar (Chinese) New Year annually provides carriers with the opportunity to increase rates as Asia shuts down manufacturing (and cargo operations) during the annual celebration.
IN 2018, THE LUNAR (CHINESE NEW YEAR) IS FEBRUARY 16TH – MARCH 2ND.
Blank sailings will restrict market capacity for a short while, but traditional beneficial cargo owners (BCO) have some thinking to do when entering annual carrier contract negotiations later this April.
Ocean carriers made large investments in mega-vessels over the past several years that are scheduled for delivery in 2018. Capable of carrying up to 22,000 TEU per trip, a race for market share has also been muddied with vessel sharing agreements (VSA), not guaranteeing BCO cargo ships on the contracted carrier’s vessel. In 2017, the overcapacity caused direct contract pricing to be a whopping $800 more expensive than market spot rates during peak holiday shipping.
International shippers are advised to secure bookings as soon as possible to avoid space restrictions and delivery delays, but should be prepared for another rate increase over the next few weeks.
For fair, friendly international forwarding, contact Green Worldwide Shipping – your freight people!
