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The third quarter of 2019 brought an early but muted peak season to the Transpacific Eastbound trade. Volumes spiked mid-summer and slowed from there, resulting in one of the weakest peak shipping seasons in years.

Uncertainty surrounding trade policies and IMO2020 impacts remain, but no major cargo rush has occurred as a result. Carriers, eager to push rates to more healthy levels, implemented an aggressive blank sailing program post-China Golden Week; approximately 40 sailings, totaling about 10 percent of market capacity, were cut during October and November.

Early results show that this strategy has been effective. Vessels are fully booked two weeks in advance, and rates are back to higher levels. Air freight space is also quite tight, with corresponding high rate levels. Accurate forecasting is critical to maintaining secure space, as is early booking. We recommend placing bookings at least three weeks in advance of desired sailing.

The Transatlantic Westbound trade is also quite strong. Vessel space is booked weeks in advance, and equipment scarcity in Europe is compounding the situation. Many container depots are facing shortages, forcing shippers to look to alternate, far-flung locations to secure equipment. Forecasting and advance booking is imperative for shippers looking to move cargo from Europe to the US. 

US export lanes remain stable, though some services from the US to Asia have been booking up earlier than usual over the last few weeks. As always, be sure to place bookings as early as possible.

Carriers have begun to announce increases related to the IMO2020 low sulfur fuel regulation. There are a variety of approaches so far – some carriers are increasing their BAF levels, some are implementing low sulfur transition fees, and some are still waiting to announce any changes. We expect to see trends emerge as we move closer to the January 1st deadline.

For more information, please contact Rachel Shames, Director, Pricing & Procurement, .

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