Far East Peak Season Disruptions

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Far East Peak Season Disruptions



Far East Peak Season Disruptions

August 23, 2018 Peak Season Disruptions from Asia We have been monitoring the inbound ocean freight situation from Asia and it appears the concerns of many are coming true.

Market reports, as well as intelligence provided by our agents, are confirming the difficult situation of rolled bookings, rejected bookings and the payment of much higher pricing to move cargo in recent weeks.

There are several causes for this.The peak season activity is robust, even more robust than expected, which could be explained by efforts to beat the imposition of new import tariffs, a strong economy and carrier capacity reductions to drive up ocean freight due to the disappointing earnings in the first half. Severe weather events in central China ports (e.g. Shanghai and Ningbo) have further disrupted sailing schedules and left terminal operators with thousands of containers to manage on terminals.

Due to space shortages carriers are turning down bookings for even their best/larger Beneficial Cargo Owners (BCOs) with large service contracts. Shippers are being faced with options of delayed or uncertain sailings versus paying a premium to move their cargo.

The unfortunate reality is that carriers are in a very strong position to extract increased pricing from shippers and they are doing it. This condition is expected to continue for at least a few weeks as the back log works its way down. Importers should be aware of this and plan accordingly. We will do our best to present our customers with the best options available and it could be the only options are ugly ones from all the feedback we are getting.

As always we want to keep you informed and will continue to work for the best solutions possible. Our team will continue to keep you updated and scour the market for alternative solutions where possible.