The Transpacific Eastbound trade continues to see softer spot rates and volumes, despite the reopening of the Shanghai metro area on June 1. A surge in volume from Shanghai has not materialized, keeping rates on the lower end of the range we’ve seen for the last 24 months – especially from China ports. Short-term rates and services from Southeast Asia ports are still slightly stronger than those from China, though levels are adjusting frequently.
European ports and rails remain heavily congested due to strong volumes and recent labor slowdowns at some major N. European ports. Delays overseas due to congestion and equipment shortages are prevalent. Most carriers have cut back their Europe-US west coast services, putting even more pressure on the US east and gulf coast services.
Many US importers are cutting back orders and forecasts for the rest of the year, citing slowing consumer demand, over-inventories, and full warehouses. Major retailers have reported cooling sales and are beginning to discount excess inventories. The Federal Reserve’s latest interest rate increase illustrates broader concerns about inflation, which has soared to a 40-year high. There are, however, also reports that spending is still shifting, and inventories are mismatched across certain industries. The home and durable goods sectors are cooling off, while the market for goods required for service industries remains strong. Some industry analysts still predict a healthy back-to-school and holiday peak shipping season this year.
Concerns about US west coast labor contract negotiations persist despite both sides affirming their commitment to avoiding port disruption. Negotiations are expected to extend past the June 30 contract expiration. Shippers are utilizing more to US east coast services to hedge against a potential west coast labor slowdown. US west coast services are less full, and west coast ports have been able to clear most of their congestion backlog as a result.
US truck capacity has eased recently, but congestion at ports and rail yards remains high. Chassis shortages are causing delays across the US as well, as import container chassis dwell time increases due to high inventories and full warehouses.
Finally, the Ocean Shipping Reform Act (OSRA) was signed into law last week, marking the first significant US ocean shipping regulation change in over twenty years. The Federal Maritime Commission (FMC) is in the early stages of rule-making based on the updates; changes will become effective once the FMC formalizes the new rules. Major updates will include protections for US exporters and new certification requirements from ocean carriers for all detention and demurrage billing.
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Director, Pricing & Procurement
CV International, Inc.
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Rachel serves as Director, 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, Director, Pricing & Procurement, CVI
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