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In light of the global trade disruption at the Red Sea, ocean carriers are implementing rate increases across a wide range of trade lanes, including trades that do not typically transit the region. Equipment imbalances and effective capacity reductions are impacting most global container shippers.

For US trades, Transpacific Eastbound lanes are seeing the largest rate increases. Carriers are implementing another round of increases on spot market rates as of January 15, sending rates to their highest levels since 2022. Ocean freight rates from Asia base ports to US West Coast ports are set to jump to $5000+ per FEU and up to $7000-8000 to US East Coast and Gulf Coast ports.

Space is very tight on services from Asia to the US, especially with the Lunar New Year holiday rush.

Import rates from other regions, including the Middle East, Med, and Europe, are also scheduled to increase in the coming weeks. Export trades will be impacted as well, including US to Asia, India, and the Middle East. Amounts vary based on carrier and routing. Service to and from Middle East ports is difficult in general due to the high risk in the region.

We’re seeing other effects as well, such as Maersk announcing this week that they will cease transiting the Panama Canal on their service between the US East Coast and Oceania. Instead, rail via West Coast ports will be utilized.

In general, more shippers are considering West Coast gateways to bypass disruptions on Suez and Panama Canal services. Solutions such as inland rail and transload/truck are available and recommended for urgent shipments; air freight is another good option for the most urgent cargo. West Coast gateways are likely to see their infrastructure and efficiency tested once again as their volumes increase.

The situation at the Red Sea is still very fluid. Most containerships are avoiding the region and using the Cape of Good Hope routing for now. The US and others launched strikes against the Houthi rebels in Yemen yesterday to deter attacks on global trade; the effectiveness of this step will be determined in the days and weeks ahead.

Please be sure to place all bookings early, at least 3-4 weeks in advance. Carriers are likely to implement more rate increases in February, as long as the global disruption continues.

 

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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.

 

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Rachel serves as Vice President, Pricing and Procurement for CVI. Her responsibilities include vendor selection, contract management and negotiation, transportation pricing, FMC compliance, and international agent network management.

Rachel began her career in international shipping with CMA-CGM America. She joined CVI in 2011, gaining experience in various departments with a focus on inside sales and marketing for the company. In 2014, Rachel assumed the role of Manager, Transportation, working on service procurement and development of client proposals. She has served in her current position since 2018.

A native of Norfolk, Virginia, Rachel earned her bachelor’s degree from the University of Michigan in 2005. She holds a Master of Business Administration with a concentration in Maritime and Supply Chain Management from Old Dominion University.

– Rachel Shames, VP, Pricing & Procurement, CVI
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