Air
Trans-pacific: Due to overcapacity, the slow return to manufacturing and the slow start to return from mainland China, flights are departing with available capacity. This slack in demand has resulted in a softer rate market. However, we are expecting spot market rates to remain elevated through 2021 due to uncertain demand and a slow reintroduction of capacity to the market. On top of the challenges of low passenger volumes and lockdowns, rates now contend with an influx of Asia outbound vaccine cargo, the ups-and-downs of the Brexit agreement and a new strain of COVID throttling cross-border commerce. Sentiments remain positive that passenger flights (PAX) will be fully resumed by the second half of 2021.
Europe: Main airports in E.U. are back to full operations and working on strong demand for exports. Capacity and COVID related complications continue to cause challenges across the UK. We are expecting continued delays, capacity shortages, and potential rate increases as further lockdowns are implemented.
Americas: TPWB rates remain stable as balance between capacity and demand continue through the new year. TPEB rates remain stable and we are seeing capacity available to Continental Europe. Services to and from the United Kingdom remain a challenge due to COVID. Although some freighter operators are providing capacity, PAX capacity plummets back down to almost none. COVID related operational challenges linger across all major U.S. hubs as well. LAX and the West Coast continue to face the most challenging environment due to high cargo volume and labor shortages. These complications will continue to affect all key hubs across the entire U.S.
Ocean
Transpacific Eastbound: Spot market pricing remains stable, with carriers implementing small increases or extending rates. Though the spot market remains relatively unaffected by general rate increases (GRI) and peak season surcharges (PSS), spot pricing has become a moot point with current premium services being the sole way to secure bookings and space. In response to strong demand, carriers have been increasing their premium service surcharges. However, we expect carriers to continue to scale back the amount of space allocated to premium bookings and given that charges continue to increase by the week, it appears that some carriers have oversold the premium space guarantee.
General Rate Increases (GRI): Spot rates will remain stable in January, but carriers continue increasing Premium Space Guarantee surcharges, partly to cool demand for guaranteed space after over-committing in December.
CMA-CGM is launching the first direct service from Asia with an initial call to the Port of Oakland, CA. This is the first of what we expect to be a wave of similar service offerings from carriers attempting to avoid congestion at the ports of Los Angeles and Long Beach.
Equipment shortages remain an industry-wide challenge for all container sizes and a major limiting factor for shipments out of Asia. Repositioning and in-fleeting will remain a focus for most carriers in January and February.
Equipment Returns and Import dwell time of containers: Currently 30+ vessels sit at anchor waiting to be unloaded in the ports of LA/LB, with limited appointment slots and reduced throughput at the terminal due to COVID-19. Janel is working around the clock to secure appointments and reduce storage, demurrage, and detention costs.
Blank Sailings: The positive news in the new year was the update on carriers’ post-Lunar New Year (Feb 12) blank sailing schedule. The blank sailing schedules cover approximately 2% of capacity will be voided following the holiday, compared with 20% a year ago.
The U.S. Market
Conditions at U.S. West and East coasts remain extremely congested and have not improved over the last two weeks. More than 30 vessels sit idle off US ports, pending unload & processing. We are expecting conditions to continue through January as terminals report record arrivals. Los Angeles Signal port optimizer reports manifested cargo due on vessels scheduled to arrive this week at 177,235 TEU, which is 102% higher than the same week last year. It is reported the following week is expected to be 94% higher year-on-year at 143,727 TEU scheduled for arrival.
We continue to receive many notices and updates from our stations across the U.S. regarding the current capacity issues with local truckers and equipment shortages
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West Coast: Truckers are beyond capacity in LA/LB area and many are refusing new clients or loads. Most are currently booking 3-5 weeks out making last-minute bookings completely out of the question. Clients and carriers are looking to Oakland and other West Coast ports for relief.
South-West: Truckers are booking 3-4 weeks in advance.
Mid-West: Truckers are booking 1-3 weeks in advance, but capacity can be secured with advanced notice. Equipment shortage and the usual issues with rail yards and ramps running behind persist. The biggest delays and issues are arising from WC/EC congestion, capacity, and equipment shortages.
South-East: Truckers are booking 3-5 weeks in advance with last-minute bookings and appointment requests being nearly impossible to secure, especially at normal rate levels. The situation at the ports of Savannah and Charleston remains dire and local contacts are forecasting further strain into Q1.
East Coast: Truckers are booking 2-4 weeks in advance with the main issue on the EC being equipment shortage and congestion. Containers of all sizes and chassis have become increasingly unavailable to meet deadlines and free time. As mentioned in the previous update, smaller ports that are completely overwhelmed with volume pulled from certain loops and sailing schedules to avoid arrival delays (IE the port of Boston has been experiencing this issue with more frequency than others).
Janel Group continues to closely monitor the market and port situation. Updates will be provided as they come available. To secure a booking or explore additional options for your supplier, please reach out to your Janel Group Representative.