Industry News

Freight Rate Update: May 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 will keep you advised and informed as trade updates are announced.

We hope everyone is healthy. Our office & staff are fully functional while working remotely.

The main item this month is the end of the 2019-2020 Trans Pacific Eastbound Contracts. These contracts expired on April 30th and new master contracts took effect May 1st, 2020.

We are currently negotiating fixed rate contracts for importers. The minimum quantity of containers for these contracts is 200 TEUs. If you are interested in a fixed rate contract or would like more information, please contact ron@medey.com.

Equipment Imbalance – In late March and early April industry sources predicted an equipment imbalance in the U.S. and possible shortage of containers. To date we have not seen any major issues in securing equipment for export or import bookings.

Air Freight – With continued cancellation of passenger flights, airfreight space is at a premium particularly from Asia to the U.S. Due to the reduced capacity, we are seeing rates ranging from $ 8.00 to over $ 20.00 per kilo.

Many of our partners are arranging charter flights to meet demand and we have access to this space.

We are moving airfreight shipments daily, and bookings need to be made 3-7 days in advance.

In some cases and particularly for shipments of PPE goods, including hand sanitizer, airlines are requiring full pre-payment for the freight charges before cargo can be booked. For these shipments, we will need to arrange specific payment terms.

Space from Europe is less of an issue and rates have decreased significantly in the past 2 weeks.

Please contact us with shipments 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 (import)

 

  • Space is still very tight with vessels sailing at capacity. We encourage customers to book as least 2 weeks in advance. We have recently seen rates increase $100-$200 per container.

 

Trans Atlantic Eastbound (export)

 

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

 

Trans Pacific Eastbound (import)

 

As mentioned above, the 2019-2020 contracts expired April 30th. New master contracts are in place as of May 1st, 2020. The contracts rates are $50-$200 higher than last year’s rates. The increases vary by container size and port pairs.

Spot rates have remained stable with some slight decreases so far in May.

The surge of cargo that was predicted for April did not materialize. While Chinese factories are back to work, U.S. importers have canceled or delayed orders, which resulted in lower than expected volume in April.

For ocean freight, we have not seen major space or equipment issues.

The steamship lines continue to cancel or ‘blank’ sailings. To date this has been effective from their point of view as they have been able to maintain current market rates and avoid excess capacity.

With the continued uncertainty with the U.S. and world economy combined with the steamship lines, continued efforts to manage capacity we are expecting rates to remain stable for the next month. Small reductions in market/spot rates are possible for certain routings.

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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