Industry News

Freight Rate Update: May 2021

Ronald Vincent | M.E. Dey & Co.

 

Air Freight – From Asia to the U.S. rates have increased significantly in the past month. With ocean freight space fully booked throughout May, importers are turning to air freight to move their cargo. With the increased demand air freight space is at a premium which is resulting in higher rates.

Rates from Europe are also starting to increase as ocean freight space from Europe to the U.S. has tightened dramatically in the past 8 weeks. Please advise us of your order deadlines. With this information, we can assess the best rate and service combination to meet your needs.

 

Trans Atlantic Westbound – TAWB (import)

 

  • In the past 8 weeks, import volumes from Europe have increased dramatically. Space is extremely tight into June at this point.
  • As mentioned last month, most carriers are now providing rates on a month-to-month basis. As well, most steamship lines are only accepting bookings one month in advance.
  • Rates and surcharges continue to increase. Rate increases of $ 500 – $ 2000 per container have been implemented for May and June. As well, carriers continue to increase the amount of additional surcharges such as PSS.
  • Some carriers have already announced that their ‘emergency’ surcharges and/or PSS will double on June 1st.
  • We urge customers to book at least 4 weeks in advance. If you are able to provide us with a shipping/production schedule for the next 3 months or longer it will be very helpful.

 

Trans Atlantic Eastbound – TAEB (export)

 

  • Space continues to be tight with carriers reporting that on many lanes vessels are departing full. Currently, the biggest issue with export cargo is obtaining space.
  • Some of this is the result of an imbalance of containers. With import volumes spiking, carriers are having to commit additional space on export voyages to move empty containers back to Asia and Europe.
  • The continued congestion at U.S. ports is also affecting exports. We have seen some vessels skip certain U.S. ports due to congestion. This then results in bookings being rolled to the next vessel and/or a scramble to re-book with another carrier.
  • 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 -3 weeks in advance and we are seeing some bookings get rolled.

 

Trans-Pacific Westbound – TPWB (export)

 

  • Similar to the situation on the TAEB services, carriers are reporting that on many lanes vessels are departing full. Currently, the biggest issue with export cargo is obtaining space.
  • Some of this is the result of an imbalance of containers. With import volumes spiking, carriers are having to commit additional space on export voyages to move empty containers back to Asia and Europe.
  • The continued congestion as U.S. ports is also affecting exports. We have seen some vessels skip certain U.S. ports due to congestion. This then results in bookings being rolled to the next vessel and/or a scramble to re-book with another carrier.
  • Some carriers have increased rates in the past month, with the average increase being about $ 100 – $ 200 per container.
  • At this time, some carriers are booked 3 -4 weeks in advance and we are seeing some bookings get rolled.

 

Trans-Pacific Eastbound – TPEB (import)

 

  • Space continues to be extremely tight due to carriers continuing to cancel sailings and equipment shortages. Additionally, some carriers are placing restrictions on bookings to inland ramp destinations such as Chicago. They prefer to keep containers at the coastal ports as they can be returned to their origin more quickly. Feedback and projections from our partners continue to be that volumes will remain at these levels through Q3.
  • Rates have leveled off a bit, though at very high levels. We encourage everyone to get booking requests in as soon as possible as most of May is already booked.
  • As most current contracts expired on April 30th, there is a bit of a waiting game to see where rate levels end up to be in the new contracts. This will then set the market for biweekly ‘spot’ rates.
  • We continue to see steamship lines push ‘premium’ surcharges to ensure that equipment and space is available. The surcharges range from $ 1000 – $ 8000 per container. That said, premium booking/space is not 100% guaranteed.
  • Delayed berthing of ships at west coast and east coast ports continues with many vessels sitting at anchor for 5 – 10 days while waiting for a berth. This in turn delays vessels on their return voyages and the whole circular issue starts again.
  • Congestion at LA/LGB ports has eased a bit however, we are seeing an average of 8-15 days delay for loading containers on the rail. In extreme cases, we have had containers sit for more than 30 days at LA/LGB, Oakland, and SEA/TAC in the past 3 weeks waiting to move to the rail.

 We are continuing to monitor all lanes, ports, and services to provide you with the best possible service at the best possible price.


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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