Industry News

Freight Rate Update: February 2021

Ronald Vincent | M.E. Dey & Co.

Air FreightRates increase gradually throughout January for standard and economy air freight services from Asia. With ocean space very scarce, companies turned to air freight to move at least some of their product. We believe air freight demand will be strong after Chinese New Year as well as the ocean freight market is a mess and appears that it remain this way throughout February.

Rates from Europe have remained stable and we do not foresee rates increasing in the near future.

If you have any shipments that you must move before Chinese New Year, please book with us as soon as you can. Please contact us with shipment details. We can then provide standard options/pricing as well as propose creative solutions that may meet your service requirements while also reducing additional costs.

 

Trans Atlantic Westbound – TAWB (import)

 

  • Import volumes from Europe are increasing and space is tightening. Some carriers are fully booked 2-3 weeks in advance. We are seeing carriers increase rates $100 – $ 300 per container on some lanes and in a few cases implement a peak season surcharge (PSS).

 

Trans Atlantic Eastbound – TAEB (export)

 

  • Carriers are reporting that in many cases vessels are departing full. While much of the volume is empty containers, we are seeing a significant increase in exports of commercial goods and agri-business products.
  • Some carriers have increased rates in the past month, with the average increase being about $ 100 per container.
  • At this time, some carriers are booked 2 weeks in advance and we are seeing some bookings get rolled.

 

Trans-Pacific Westbound – TPWB (export)

 

  • Carriers are reporting that in many cases vessels are departing full. While much of the volume is empty containers, we are seeing a significant increase in exports of commercial goods and agri-business products.
  • Some carriers have increased rates in the past month, with the average increase being about $ 100 per container.
  • At this time, some carriers are booked 2 weeks in advance and we are seeing some bookings get rolled.

 

Trans-Pacific Eastbound – TPEB (import)

 

Getting right to the point, the current status on the TPEB is dire. It does not appear that it will improve until at least April.

As previously mentioned (I know this sounds like a broken record) we are currently contending with Chinese New Year (CNY) which starts February 12th. While the 12th is still 2 weeks away it is almost impossible to find space from Asia. Then, when we do get a booking we have to wait for confirmation that containers will actually be available for the booking.

To get space we are seeing ‘premium service fees’ as high as $ 3500 per container which applies on top of the already preposterously high base rate of say $ 5000. Which results in total ocean freight costs of $ 8000 – $ 10,000 per container in many cases. Yes, the steamship lines have incurred some additional costs in the past 12 months due to Covid 19, but in my opinion, it does not justify these rate levels.

Predicting the rate levels and space situation in February, March, and beyond is not easy. At the moment, most industry experts see the rate and space environment staying the same or possibly getting a bit worse after CNY.

This article Trans-Pacific trade crashes into the max-capacity ceiling – FreightWaves explains the Catch 22 the TPEB trade is in. A ton of demand out of Asia. A glut of vessels arriving at U.S. ports. U.S. and Canadian ports that cannot handle the additional volume of the ‘extra loader’ vessels. Vessels at anchor unable to berth at destination ports. A lack of vessels and containers arriving back to Asian ports to maintain coherent schedules. And then repeat.

We are asking our partner offices for space to ANY U.S. or Canadian port regardless of what the final delivery location is. The answer at this time is that all vessels to all ports are fully booked for the next 2-3 weeks. This is not deterring us from looking for other options or continuing our daily dialogues with carriers. We continue to have booking requests on waiting lists. When bookings are canceled by other service providers we work to obtain canceled slots immediately.

We are committed to moving your freight and are literally working overtime to meet our customers’ needs.


M.E. Dey and Co. monitors the market daily to find competitive rates that pair well with exceptional transportation services. We provide fixed-rate contracts in addition to standard market rates. Contact us to talk with a representative or request a quote to get started.

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