TRADE ALERT:

RATE INCREASES HITTING THE TRANSPACIFIC MARKET

May 9th 2024

Rogers & Brown

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Price increases have hit the Transpacific eastbound market, starting with containers in-gated on or after May 1st, 2024. With volumes surging over the past few weeks, space has become increasingly in-demand, allowing the ocean carriers to successfully implement GRIs, elevating rates to the US by as much as 60% in some cases.

Prior to this surge, the market had remained soft post-Chinese New Year as rate reductions continued well into April. As soon as volumes started spiking, the ocean carriers were quick to implement GRIs to elevate rates across all ports of entry into the United States.

Outside of the increased volumes, there are a few other market conditions to consider:

• Schedule reliability for cargo that is normally routed through the Suez Canal has remained volatile, causing shifts in trade lanes for some importers and longer times for equipment to be tied up in the process.
• Blank sailings by the ocean carriers have not only reduced the supply of space in the market but also aided to a growing equipment shortage in some Asian base ports.
• An earlier peak season is possible (maybe even likely) given the uncertainty around the labor contract negotiations between the ILA and United States Maritime Alliance. The current contract expires September 30th, 2024 and any work stoppage would affect almost all ports from Maine to Texas. West Coast ports have subsequently seen a spike in volume indicating some importers are already changing their routings ahead of any disruptions.
• Canadian National Railroad is facing potential disruptions due to a worker strike. Not only will this be a supply chain issue for US Importers currently utilizing Canadian ports with rail service to the US, it is likely to push more volume down to SeaTac terminals in the U.S. in the near-term.

Rogers & Brown and our partners have received indications from at least one major ocean carrier that another GRI of $1000/container is expected May 15th and likely to hold. We have also seen another carrier put out a placeholder to begin charging a Peak Season Surcharge as early as June 3rd. Some of these may be reduced or even postponed, but there is enough momentum to keep a close eye on the numbers.

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What should importers do in the meantime?

Given the volume projections, it is very important to have suppliers book cargo as far in advance as possible. We are always working with ocean carriers to procure the space needed for our clients and reduce any vessel rollovers to a minimum.

We encourage everyone to work with their customer service and sales representatives to discuss forecasts for the upcoming months so we can work with our international partners to plan accordingly. As always, do not hesitate to reach out as needed. Rogers & Brown is here to support you in any way possible.

[email protected]

Best regards,

Rogers & Brown Team

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