Tight Ocean Freight Market Balance of 2018

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Tight Ocean Freight Market Balance of 2018

Author: sales@jsconnor.com


Tight Ocean Freight Market Balance of 2018

November 1, 2018

Data coming from our agents in Asia plus various trade journals indicate that the peak season for the trans-Pacific market could last until mid-December, contrary to reports that were circulating just a few weeks ago. This seems to be fueled to a significant extent by looming increases in tariffs on $200 billions worth of goods from 10% to 25% by year-end.

This has been further confirmed by the unreliability of carrier schedules and space shortages recently which we now expect to continue until close to Christmas. We also continue to see rising rates in the form of GRIs and spot rate indications. There are also bookings being rolled to later sailings. This is in spite of carriers adding extra loaders recently to increase capacity.

Seaintelligence reports that Asia-N. American West coast schedule reliability decreased by 23% year over year in the third quarter dropping to 54.3% in August and 44.2% in September. East Coast port schedule reliability was at 64% for the two months. Ironically this was partially contributed to by the number of blank sailings (vessels pulled out of regular rotations) in an effort to balance capacity and increase ocean freight rates. Hard to figure. Severe weather events have also contributed.

At this point, shippers with needs/reasons to get cargo into the U.S. from Asia should push suppliers to make sure product is ready for shipping and book as early as possible (but make sure the bookings are real to avoid exacerbating the problem). If cargo is not so urgent and inventory is adequate it will be interesting to see if the situation will improve after the holidays.

We will continue to monitor the situation and keep your cargo moving as efficiently as possible.