The tight situation on TPEB continues with another round of $1000-2000 per FEU increases as of July 1. To USEC ports, spot rates now exceed $10,000 per FEU. Carriers are adding capacity, especially to USWC ports, but it has not had a meaningful impact on the situation yet.
Carriers are also shifting capacity from India-US services to Asia-US services due to demand; this will put more pressure on India space and result in rate increases on that lane as well.
Fixed contract space remains severely limited, even with agreement on peak season surcharges (which are running as high as the $2000s per FEU for the surcharge alone – and expected to increase for July). Carriers are drastically restricting lower-priced fixed allocation, pushing more freight to the higher-level spot market. Spot market rates have risen sharply during the last two months, even faster than during the pandemic period, and carriers are eager to load as much higher-paying freight as possible.
On a positive note, port congestion at major hubs including Singapore and Barcelona has improved. Further, Charleston port announced a pause in construction work while they clear a vessel backlog that has built up over the last few weeks.
Some industry analysts project that this TPEB market situation may last through Golden Week in October, when there should be more clarity on the USEC/GC labor contract negotiations. However, with so many factors contributing to the tight market, there is no consensus on the potential duration of the current challenges.
Bookings need to be placed 4-6 weeks in advance; the earlier notice, the better. Forecasting and advance planning are critical, especially in these tight markets.
Industry News
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Rachel Shames
VP, Pricing & Procurement
CV International, Inc.