Full vessels + Chinese New Year = peak season surcharges

Midwest cargo importsVessels from Asia to North America have been sailing close to full and this is across the board for the majority of carriers. Meanwhile, members of THE Alliance are tweaking capacities on the transpacific in order to push through dramatic rate increases of up to $1,000 per FEU leading up to the Chinese New Year that begins Feb. 16.

The holiday means most factories in China will close for a week. The result is the push we’re feeling now as goods and services are being finished to be shipped overseas. The result is pure economics with demand driving rates and a Feb. 1 peak surcharge date:

  • Hapag-Lloyd has been leading the rate charge, warning it will void sailings on the transpacific around Chinese New Year while also seeking a $700 per FEU rate increase that it claims is a peak season surcharge.
  • Fellow alliance member Yang Ming has been more aggressive, seeking a general rate increase (GRI) of $1,000 per FEU.
  • Other alliances – 2M and the Ocean Alliance – are trying to push through general rate increases without necessarily referring to them as peak season surcharges.

Analysts are expecting carriers to announce more void sailings for February soon. The question will be how quickly cargo is regenerated after the factory shut downs from the Chinese New Year.

There is some good news. Bolstering transpacific rates after they had fallen to 12-month lows in December will help carriers that are struggling to make decent profits on the Asia-Europe tradelane.

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