Dear valued customers,
It’s almost the end of first quarter of 2022 and we believe it’s the time of the year for you to plan your peak season shipment for the rest of the year and keep your supply chain smooth.
USPTI would like to update you some of insights about TPEB market and we hope this could help you better arrange your cargoes in a more efficient and economical way.
Looking into 2022, there are still many uncertainties and challenges this year.
1. Port congestion is still not fully relieved.
The number of container ships queuing to enter the ports of Los Angeles and Long Beach declined to around 61 vessels, down from the peak of 109 ships reached 2-month earlier in January, according to the Marine Exchange of Southern California. However, this is still not a good sign to the port congestions. The average total lead time from Asia base port to Los Angeles and Long Beach ports is still long at around 30 days, which should have been just 14-15 days as it was in 2020. This is a sign that the port is still congested even during this traditional slow season and it is expected to get even worse later this year when the volume picks up from late May or early June.
2. ILWU has rejected one-year contract extension offer from PMA.
Longshore man contract will expire on June 30, 2022. It poses a danger to your peak season cargo, as the shipping window is short this year – importers might need to arrange your peak season shipment a lot earlier to avoid the potential slowdown or even strike when they are negotiating the contract 2 months later.
If a slowdown or strike really happens, all the importers would definitely move their cargo out of WC ports, then space will get very tight to other ports, including EC ones. Surely, the Q2 and Q3 rates will be going up a lot just like last year (2021).
3. It’s a space market in 2022.
As we are seeing the port is still congested and the potential slowdown on the LA/LB ports. We believe it will still be a space market in 2022, which means the space will still be an issue for US importers.
Carriers will not put too many vessels into the market this year as they had the experience that more vessels would only cause longer lead time due to congestion and it will not 100% guarantee their revenue; hence, we will see fewer extra loaders this year. Carriers would also be more conservative not only on committing space to all contracts, as the space in 2022 will be limited or even less than last year, but also will definitely increase the direct contract rates with their long-term customers compared to last year’s contracts.
4. Our suggestion for your supply chain
a. Plan your peak season cargo as early as possible this year, starting from now (March, 2022) as you will get the benefits with a slightly better transit time, ocean freight and also the space allotment.
b. Develop and work with a long-term business partner for your logistics and supply chain. A fully developed NVOCC, such as USPTI, could be the one who can really help you when you need support. It’s even crucial than before under current market circumstance.
c. Keep up a lifting record with your logistics partners all year round, which will make them know you are seeing them as a long-term business partner and vice versa. Having a stable weekly volume during slack season is a good way to show your partner that you are treating them long-term and also guarantee you have a smooth supply chain.
Even though every year is different and the coming year could be challenging. USPTI team is always here to help streamline your logistics and supply chain. We promise to take your cargo to the Right Place at the Right Time at the Right Price – this is our core value and all our teams keep these principles with us all the time and doing the best to our customers.
Should you have any questions, please don’t hesitate to contact our offices or your sales representatives. All of us are happy to help.
USPTI appreciate your support!