Just as mid-market and large Beneficial Cargo Owners (BCOs) are finalizing contract ocean container agreements for 2023 and beyond, shipping lines are trying to implement an April 15th General Rate Increase (GRI). The GRIs that Hard Deck Logistics has seen range from $600 West Coast to much as $800 East Coast/Gulf per Forty Foot Equivalent Unit (FEU). Combine this with the capacity that carriers have canceled in the last 30 + days, ocean carriers are hoping to see these GRIs actually stick.
Ocean carriers are also trying to pull rates up desperately claiming that rates at the spot market level are not sustainable despite the inflation, economic, and high inventory turmoil on the USA side, which is all weakening container demand for imports from Asia to North America. Recently increasing oil prices, inflation, along with initiatives for carbon emission control such as IMO 2023 (entails investments in shipping fleets for compliance), the addition of more port calls to sweep up more containers amidst overall lower container demand (which is all added cost) are all points that ocean carriers mention to justify their position in having to deal with increased operating costs.
Additionally, with several public holidays upcoming in Asia/S.E. Asia such as Labor Day, Songkran, Hari Raya, and Khmer New Year, which traditionally causes a bit of a rush of cargo ahead of the holidays, this year so far the market demand has remained overall quite low hence why GRIs are being closely monitored.
There are reports, with horrible timing as some would say, that spot market rates after the 4/15 GRIs are implemented (which as of now look like they will stick), would be on par with annual contract rates that mid-market and large BCOs are currently being offered.
We will keep a keen eye on these matters. Stay tuned for more….
Sincerely, CEO Hard Deck Logistics
www.harddecklogistics.com
traffic@harddecklogistics.com
