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Transpacific

Rates are down a bit from last week, though vessels are still seriously overbooked. Another increase is
possible for July 15th. We’re seeing rollovers and booking delays out of most Asia origins. Vessels are
booked up 3-4 weeks in advance; many services are already completely booked through early August.
Some carriers are securing premium surcharges for priority loading, and some have announced peak
season surcharges beginning in July. Extra loaders have been utilized and some previously blanked
sailings have been reinstated.With surging COVID-19 cases in the US and some key high population states taking extra safety
precautions, we may be headed toward another volume decline. If consumers are less active in the
coming weeks, we’ll see importers cut orders and demand less ocean space. This scenario is far from
guaranteed, but we’ll continue to monitor as usual.

There is no doubt that carriers will take action by canceling more planned sailings if the market shows
signs of softening. Carriers took a more restrained approach with blank sailings for Q3, electing to blank
many early sailings and leave much of the schedule for August/September unchanged for now. Volumes
and forecasting over the next few weeks will determine whether additional Q3 sailings will be canceled.
There is a lot at stake for ocean carriers. Top container shipping analysts recently revised the outlook for
2020 carrier profitability. If they can maintain rates at these higher levels, the industry stands to achieve
an annual profit in the range of $9 billion. That scenario, a significant turn from the previous outlook
dampened by the pandemic, depends heavily on carriers’ discipline with rates. As we’ve learned over
the last few years, carriers will continue to manipulate capacity, so it reflects expected demand and
higher rates are maintained.

It is imperative that all transpacific eastbound shippers place bookings at least one month prior to cargo
ready date. For all business, contract/long term and floating/short term, advance booking is required.
We urge you to proactively communicate any specific space needs to your dedicated CVI customer
service or sales representative.

Special Note: Congratulations to our dedicated partner in Asia, ORIENT STAR GROUP,
on their recent Trans-Pacific NVOCC rankings – #11 Asia→ USA and #16 China→USA.
We are extremely proud to be a part of this great success.

 

Rachel Shames,

Director, Pricing & Procurement

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