The new year began with the traditional spike in volumes out of Asia in advance of the Chinese New Year holiday. Since the end of the holiday in late February, volumes have settled and the market is swaying between dips in rate levels and occasional increases as carriers work to maintain sustainable rates during spring contract negotiations. Overall, volumes are relatively strong, but continuous addition of new capacity has kept rate levels similar to last year.
Other inbound trades are stable, such as the Latin American lanes. Volumes out of Europe remain strong, though a shortage of truck power on that side has caused some delays as of late.
US export trades are gaining some momentum, and services are filling up quickly as a result, especially to Asia and Europe. We’ve seen incremental rate increases on select services, as carriers are eager to get rates up after years of low levels.
There is concern among importers and exporters alike surrounding new tariffs implemented by the US and other governments. It remains to be seen exactly what impact these will have to shipping volumes and rates.
Domestic trucking is the biggest challenge facing the industry this year. The situation came to a head in January, when the impacts of the new ELD regulations combined with holidays, weather delays, driver shortages, and overall increased demand resulted in major service interruptions. Truck power is still extremely tight across the country, especially in the Midwest. Current lead time for truck power can range from one to three weeks depending on the location. We have already begun to see rate trucking rate increases across the board, in the form of base rate increases as well as more frequent accessorial charges such as prepull and layover fees. The situation is not expected to normalize until 2019 at the earliest. Advance booking will be essential going forward to avoid major disruptions to shipping schedules.
For more information, please contact your CVI customer service representative or Rachel Shames.