Transpacific capacity tightens, spurring US importers to sec
Time: 2016-08-17 13:48
SHIPPERS expect capacity will be cut further as shipping lines, whipped by harsh transpacific contract rates, work to lift spot rates as shippers stock up ahead of the holiday shopping season.
US importers, faced with fast filling ships in Asia, are focused on securing peak season space on the transpacific, despite falling spot rates, which post the occasional increase.
Beneficial cargo owners are concerned that a brief uptick in rolled cargo that affected non-vessel-operating common carriers in recent weeks could spread to their contracted shipments if vessels are overbooked later this month, reports IHS Media.
One quarter of the 20 US importers surveyed by IHS report an increase in rolled cargo over the last three to four weeks. Those who have been affected note the increase in contracted cargo delayed from loading in favour of more profitable spot freight has been minimal.
It could be crunch time soon. "August and September. This is when the crush is supposed to be on," said Pacific Northwest Asia Shippers Association official Hayden Swofford.
He said he is aware of a few cases of rolled cargo that occurred last month, but knows of no significant rolling in the early part of this month.
The spot rate for shipping an FEU from Shanghai to the US west coast in the first week of August fell 3.4 per cent to US$1,277 from $1,322 the previous week, according to the Shanghai Containerised Freight Index.
The spot rate to the east coast fell 3.8 per cent to $1,884 per FEU from $1,958 in the last week of July.
Griffin Creek Consulting past president Ed Zaninelli said carriers are reporting vessel utilisation percentages in the mid-90s, so the expected spike in cargo volume in the coming weeks will lead to full ships and possibly some rolling of cargo to subsequent voyages on the busiest trade lanes. These factors will push freight rates higher.
Another indicator space is tight is that some importers are increasing the minimum quantity commitments (MQCs) they make to carriers for a specified time period to secure the lowest rates.
One carrier reported the MQCs are being increased not so much for rate purposes, as to ensure sufficient space now that vessels in the eastbound trans-Pacific are filling up.
NVOs are concerned because when vessels fill up, the lowest-paying containers are the first to be bumped off of ships and "rolled" to subsequent voyages.
Several importers reported there were some instances of cargo rolling two to three weeks ago, but the situation cleared up quickly when it became evident that proposed general rate increases did not materialise.
US importers, faced with fast filling ships in Asia, are focused on securing peak season space on the transpacific, despite falling spot rates, which post the occasional increase.
Beneficial cargo owners are concerned that a brief uptick in rolled cargo that affected non-vessel-operating common carriers in recent weeks could spread to their contracted shipments if vessels are overbooked later this month, reports IHS Media.
One quarter of the 20 US importers surveyed by IHS report an increase in rolled cargo over the last three to four weeks. Those who have been affected note the increase in contracted cargo delayed from loading in favour of more profitable spot freight has been minimal.
It could be crunch time soon. "August and September. This is when the crush is supposed to be on," said Pacific Northwest Asia Shippers Association official Hayden Swofford.
He said he is aware of a few cases of rolled cargo that occurred last month, but knows of no significant rolling in the early part of this month.
The spot rate for shipping an FEU from Shanghai to the US west coast in the first week of August fell 3.4 per cent to US$1,277 from $1,322 the previous week, according to the Shanghai Containerised Freight Index.
The spot rate to the east coast fell 3.8 per cent to $1,884 per FEU from $1,958 in the last week of July.
Griffin Creek Consulting past president Ed Zaninelli said carriers are reporting vessel utilisation percentages in the mid-90s, so the expected spike in cargo volume in the coming weeks will lead to full ships and possibly some rolling of cargo to subsequent voyages on the busiest trade lanes. These factors will push freight rates higher.
Another indicator space is tight is that some importers are increasing the minimum quantity commitments (MQCs) they make to carriers for a specified time period to secure the lowest rates.
One carrier reported the MQCs are being increased not so much for rate purposes, as to ensure sufficient space now that vessels in the eastbound trans-Pacific are filling up.
NVOs are concerned because when vessels fill up, the lowest-paying containers are the first to be bumped off of ships and "rolled" to subsequent voyages.
Several importers reported there were some instances of cargo rolling two to three weeks ago, but the situation cleared up quickly when it became evident that proposed general rate increases did not materialise.
