Heading into the peak shipping months on Transpacific Eastbound trades, import volumes are strong and carriers are anticipating a healthy season. Overall US containerized imports are on the rise, but the capacity glut that has plagued the industry for years continues to put downward pressure on freight rates. Carriers are pushing for peak season surcharges beginning in July, hoping to recover as much operating cost as possible. In response to the capacity issues, the 2M Alliance (Maersk and MSC) recently canceled one Asia-US service and is reviewing port calls on other individual services. There is clear motivation for the industry to pull space where practical and attempt to rebalance the market.
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 exports have been strong in 2018, on track for growth of 5-6% over 2017. Export services are filling up quickly as a result, especially to Asia and Europe. We’ve seen carriers successfully implement incremental rate increases on key export lanes.
US and overseas trade policies remain a factor for many sectors, with continued uncertainty on the ultimate impact on growth of imports and exports in the coming months. Global fuel rates have impacted all aspects of the transportation industry this year. US inland fuel rates are up, and ocean carriers have applied various increases to cover rising fuel costs worldwide (emergency bunker, operational recovery fees, etc).
Domestic trucking continues to be a major concern, though the severe issues we saw in Q1 2018 have softened over the last couple of months. There are signs of another tightening already, however, and we expect the peak shipping season to put further strain on the industry. It is still critical to plan ahead and secure truck power as early as possible.
For more information, please contact your CVI customer service representative or Rachel Shames.