As the New Year brings fresh resolutions and opportunities, shippers are coming face-to-face with tighter capacity and higher rates on Pacific trade lanes.
Spot rates from Asia increased for the second week in a row as we brought in 2019, and the industry has begun bracing for the Lunar (Chinese) New Year holiday:
- Asia – U.S. East Coast (up 13.4%)
- Asia – U.S. West Coast (up 9.6%)
- Asia – Mediterranean (up 15.3%)
- Asia – Europe (up 14.2%)
IN 2019, THE LUNAR (CHINESE NEW YEAR) IS FROM FEBRUARY 5TH TO FEBRUARY 19TH.
The increase in trans-Pacific rates are due to a mixture of pre-Chinese New Year preparations and trade tensions between the United States and China. Most retailers and manufactures front-loaded their imports in December (2018) forcing some terminals, such as Los Angeles – Long Beach, into extreme delays and backlogs of containers.
While some of the capacity is forecasted to slow come mid-January as the “cargo rush” passes, a March 2ndtariff increase deadline has shippers pushing to secure any additional inventory before duties increase to 25 percent after the Lunar holiday.
If a last-minute surge occurs, ocean carriers could deploy additional mega-vessels to meet the demand. Carrying close to 20,000 TEU, the extra-loaders would devastate already congested ports like Los Angeles-Long Beach, where an extra-loader ship can deposit an additional 90,000 containers onto the current back-log.
Shippers should look to secure their booking as soon as possible to avoid the expected rate increases in the coming weeks.
As Green continues to monitor the situation, stay up-to-date on freight news by following us on Facebook, Twitter, and LinkedIn. For continuous updates, make sure to check out our website at greenworldwide.com.