Ocean freight demand from Asia to the US continues to exceed capacity since the May 12 China tariff reprieve. The major carriers are repositioning vessels, adjusting services, and adding extra loaders, while niche, independent carriers are once again entering the trade to take advantage of high rates. Still, there is not enough space to accommodate the backlog of shipments and new orders in the market. Roll pools at origin are growing, and rates are scheduled to increase again on June 1 with a significant GRI. New spot rate levels for June 1 are expected to be $6000-7000 per FEU to USWC and $7000-8000 per FEU to USEC. If the market remains tight, another large rate increase will be implemented in mid-June.
In addition to vessel space, equipment shortages and port congestion are impacting shippers. Equipment is already becoming scarce at some China ports, and congestion is growing as well, especially in North China. Congestion has been an ongoing concern at major transshipment hubs, including Singapore and Pusan, and the current volume surge is exacerbating the situation. US ports are mostly fluid, though concerns remain about congestion developing in the coming weeks.
North Europe ports have been experiencing significant congestion this year, and the situation is not improving. Labor shortages, holidays, low water, and rail delays are all contributing factors. Expect delays for cargo moving via any North Europe port in the coming months.
As always, we remind customers to plan early, provide forecasts, and make bookings at least 4 weeks in advance of the cargo-ready date or desired sail date. In some cases, during these tight markets, bookings received even earlier than 4 weeks prior are better positioned to secure space when vessels open for bookings.
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Your CVI team is here to assist you through these current market challenges. Ocean freight, air freight, domestic road/rail, and Customs Compliance – count on our dedicated professionals to care for you and your supply chain. Call us and let us show you what we can do!
Rachel Shames
VP, Pricing & Procurement
CV International, Inc.