Peak season is here for importers

freight forwardersHere’s something new for peak season freight forwarding for importers. We already had one carrier try to implement a “Trade War Surcharge,” on top of a peak season surcharge. Looks like it could be a rocky and expensive 2018 peak season for imports.

Peak season is here, and it’s looking strong considering:

  • GDP growth of 4.1 percent has importers stocking up for a busy holiday season.
  • Worry about tariffs and a possible trade war with China pushed importers to order early and often to get as much product in the United States before trouble starts to brew.
  • The last three years have shown growth from August to October. According to Alphaliner, 2017 had grown six percent over 2016. So, the traditional peak season surge will be in play for 2018.
  • Carriers took three services out of rotation from Asia to United States to manage capacity and tighten up space for 2018, driving up rates along the way.

What to expect:

  • Heavy congestion on the rails: According to the Intermodal Association of American, intermodal traffic increased 6.7 percent in June compared to last year.
  • Container drayage truckers to be maxed out: This will create delays getting containers out of the rail yards. Container demurrage will be a concern plus delivery costs will go up.
  • Tight vessel space: Expect some containers to get rolled to later sailings.
  • Skyrocketing peak season surcharges and general rate increases: Carriers will take advantage of full vessels and slap large surcharges to make up for losses in the first quarter hoping to end the year in the black.
  • Premium on airfreight: Airfreight space could be at a premium again this peak season, demanding higher prices.
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