Record High Import Ocean Rates from Asia
Record High Import Ocean Rates from Asia
As a result of COVID-19, the first and second quarter of 2020 brought record air freight rates from Asia into the United States. The pandemic also led to blank sailings during this period. In an effort to recoup loss revenue, ocean carriers continue to implement general rate increases and increase market rates during May and June. Therefore, importers are experiencing record high ocean freight rates from the region. Transpacific Eastbound ocean rates were unusually hit with three straight general rate increases on June 1, June 15, and July 1, while market rates continue to increase up to 50 percent from the beginning of the year. Although the number of imports into the United States from Asia are actually lower this year, the market has continued to stay at a sustainable level. This is due to the “new normal,” as carrier space remains extremely limited as a result of the blank sailings issued and of which are estimated to continue into Q3 due to a projected weaker peak season than in past years. A blank sailing is known as a “voided” sailing. The cargo is still scheduled, yet sailings do not actually occur. This event not only causes higher rates, but a potential cargo roll over, as well. Despite the frequent GRI’s implemented in the past few weeks, the July 15 GRI will most likely be postponed until July 20 or even until the end of the month, although carriers can assess differently at anytime.
When COVID-19 was just beginning to hit the United States, Scarbrough predicted an “import surge” in April or May, effecting vessel space, air and ocean rates, congestion at terminals, equipment availability, and more. This included all origins. In fact, 1.69 million TEU are forecasted to be imported into major U.S. ports in just July, which is approximately what was imported in June. This is 14.1% less than a year ago according to the Global Port Tracker Report. The report also forecasts that October is slated to be the busiest month of peak season. Click here to capture a timeline and summary of the global supply chain effects from COVID-19 in recent months.
Scarbrough continues to monitor the situation closely and continues to work on mitigating what it can remaining aware that future surcharges, transit times and delays many times cannot be controlled. Scarbrough will send updates on your cargo if it is significantly affected. If you have any specific questions, please contact your direct customer service representative. New to Scarbrough? Contact us for pricing.
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The Scarbrough Group of Companies, headquartered in Kansas City with local presence in every major port in the world, is a complete international and domestic supply chain service provider, offering U.S., Mexican, and Canadian Customs brokerage, Import & Export Transportation Solutions, Domestic brokerage and asset-based trucking, Warehouse fulfillment and distribution services, Trade Compliance Consulting, Large Equipment and Project Cargo moves, as well as Parcel Audit Savings. Scarbrough is widely known for its trade experts, training, personalized customer service, customized solutions, and data analytics tools. Since 1984, Scarbrough has continued to satisfy its clients by following its motto on a daily basis: “It is our job to make your job easier.” Moreover, our team of experts is available at your disposal. We offer free consultations on any topic from supply chain optimization and duty savings opportunities to the basics, helping to guide new importers and exporters as they jump into the world of global trade. Contact us now.