Industry News

Freight Rate Update: March 2020

Ronald Vincent | M.E. Dey & Co.

Here is the latest update on current freight rates for both Import and Export cargo. M.E. Dey provides the best possible rates available to our clients by reviewing various carrier options. We’ll keep you advised and informed as trade updates are announced.

As you may imagine, the coronavirus outbreak has significantly impacted freight volumes and rates, particularly from China to the U.S. At the beginning of March freight volumes are about 50% lower when compared to last March.

At the moment, it is estimated that about 65% of factories have resumed production. It is projected that this number will increase to about 80% in early April. As a result, carriers have continued to cancel or ‘blank’ sailings in March and into April in some cases. Space is currently not an issue where sailings have not been cancelled.

 

Trans Atlantic Westbound (import)

 

  • Space is still very tight with vessels sailing at capacity. We encourage customers to book as least 2 weeks in advance.
  • Rates are stable at the moment, but increases may be implemented if capacity remains tight.
  • The U.S. has implemented additional tariffs on some EU origin products. To date the additional tariffs have not impacted shipment volumes and space remains tight.

 

Trans Atlantic Eastbound (export)

 

  • Rates remain stable. Equipment availability has improved, but some origins/carriers continue to have equipment shortages.
  • We encourage customers to book at least a week in advance.

 

Trans Pacific Westbound (export)

 

  • Rates remain stable. Equipment availability has improved, but some origins/carriers continue to have equipment shortages.
  • With some carriers we are having to book 2 weeks in advance.
  • Due to the lack of imports from Asia, equipment shortages are expected in March and April in the U.S.

 

Trans Pacific Eastbound (import)

 

  • Carriers have announced a GRI for March 15th of $200-$250/40’ container. We do not expect that demand will support this increase. We expect that within a few days after the 15th the increase will be reduced and/or eliminated.
  • Carriers have said that they expect a surge of freight in April. They are expecting that factory production will be close to 100% and that U.S. importers will be demanding accelerated shipments to replenish inventories.
  • Early indications are that the carriers will try to push through a large GRI on April 1st in the neighborhood of $ 1000 per 40/ container.
  • As we head into the annual contract season, we have started preliminary discussions with steamship lines on rate levels for new service contract rates. Initial feedback is an increase of $200 per container to east coast and west coast ports. Carriers have said that they expect a larger increase to inland points.
  • It is early and everyone is staking out their positions. So we expect this to change. As always, freight volumes will greatly dictate where the final rates.

 

We continue to monitor rates daily and will work to mitigate rate increases wherever possible.


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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