Industry News

TPEB TRADE UPDATED 4-9-21

Dear Client,

 

We are facing a critical time in our industry that has not been experienced for years and it is making it very challenging in regards to the effect on all supply chains.

 

See the below information:

 

  • Equipment shortages in China are being experienced.  Carriers are doing all possible to replenish origins however the imbalance in trade is making this increasingly difficult and it is also very costly to send empties back to Asia.

 

  • Space is extremely short at this time from all China base ports.  The arbitrary origins ports are even worse due to the smaller feeder vessels so trucking from the feeder port to the mainline POL is required in many cases.

 

  • Rates are at an all-time high and continue to increase with premium rates being required in exchange for space.  Even with premium rates there is no guarantee of obtaining space on the requested vessels. 

 

  • The space situation is most critical at this writing to the USEC however the USWC is also problematic.

 

  • For cargo that is needed to the USEC and/or inland locations you may wish to consider discharge on the USWC and then  transloading into domestic trucks to move inland,  as needed,  to keep the cargo flowing.

 

  • We do not expect that this situation will improve in the short term and could last thru August based on all indications at this time.

 

In order to assist you with your imports it is critical that you confirm the bookings immediately when sent so we can work on gaining space as needed.  The space situation changes from day to day due to the overall volume of orders being requested so important to advise ASAP to assist us to gain the space on your behalf.

 

Thanks for your continue support and rest assured we are doing all possible to keep your cargo moving.

 

Sincerely,

EC Capacity/Market Update

Dear Valued Customer;

 

The Trans -Pacific import market remains extremely strong with cargo volume exceeding vessel and container supply.

 

Although West Coast demand continues to exceed supply, the East Coast demand far exceeds the East Coast supply.

Blank sailings, terminal congestions coupled with the continuing increased demand will create  unprecedented international transportation supply shortages to the East Coast.

 

Currently we anticipate blank sailings from Ningbo to the EC during the month of April. We anticipate sailings from other China ports will also be impacted. Our core carriers are advising that EC capacity is  fully booked thru August whereas West Coast capacity is currently booked thru June.

 

We are aggressively pursuing any and all options to minimize the impact to your supply chain, however we anticipate rates to continue to escalate with space becoming the critical issue during at minimum the next 2-3 months.

 

Please insure you are providing your forecast and booking requirement as early as possible to USPTI.

 

Please contact your USPTI representative for any specific details

Market Update Feb 24,2021

Dear Valued Client,

 

We continue to see a very strong market thru the first quarter of 2021 and beyond.  Space, and equipment continue to be scarce due to strong demand up to and immediately after Chinese New Year.

 

It appeared  that there will not be a slow season and the strong consumer demand will continue into the second quarter 2021.  We request that book early and provide forecasts and projections that will assist us to obtain the space and equipment required to service your import requirements.

 

Vessel schedules and service integrity, with all carriers, continues to be a challenge. Terminal and berthing availability continues to be problematic at both origin and destination ports.  Weather has also had some effect on vessels crossing the Pacific Ocean and is currently impacting intermodal rail operations.

 

Freight costs will remain high in view of the space concerns, critical shortages of equipment and overall consumer demand.

 

Please contact your USPTI representative for detailed information or any specific questions

 

Thank you for your support and we look forward to a long term relationship of service.

ONE Line Apus Update Incident Update and Market Impact Dec 9, 2020

Dear Valued USPTI Customers

 

 

ONE Line Apus Update Incident Update and Market Impact

 

ONE Apus is now confirmed to be safely berthed in the Port of Kobe after losing 1,816 containers overboard when it encountered severe weather on Monday, November 30, 2020.

 

A full safety inspection of the vessel and its remaining cargo will now take place with the assistance of local emergency services to ensure that there is no threat to people or the environment posed by the dislodged and damaged containers that remain on deck.

 

Once the vessel and cargo are declared safe, surveyors from the various stakeholders will make their initial assessments whilst stowage planners and stevedores formulate and implement a plan to ensure the safe removal of the remaining units. Then, a thorough evaluation will be made on the exact number and type of containers that have been lost or damaged and damage to the vessel.

 

USPTI anticipates the unloading of containers and vessel assessment to take several weeks. We are still awaiting an actual list of potential USPTI cargo damaged or impacted and will keep you updated on the progress as provide you with additional information as it becomes available.

 

USPTI is still evaluating the  impact to an already space constrained market and anticipates the incident will reduce overall available space for the foreseeable future as demand continues to outpace available container supply. Likewise we anticipate the incident will further erode equipment availability.

 

We will provide additional updated as more info become available.

 

Thank you for your support and we look forward to a long term relationship of service.

 

Should you have any questions or concerns please contact your USPTI representative.

USPTI Market Update

September 2017

The Trans-Pacific import market remains volatile. As carriers continue to attempt to artificially adjust supply and demand rates remain at competitive levels. Carriers continue to file rates increase but have had limited success in implementing the increases in their entirety. The consolidation of carriers (mergers and acquisitions) noted below continue to impact both the quantity of space available and overall service (port of call, etc.)

  1. COSCO acquires OOCL
  2. COSCO and China Shipping merge
  3. APL is acquired by CMA/CGM
  4. Hapag Lloyd and United Arab Shipping merge
  5. Hanjin files for bankruptcy
  6. NYK, MOL and K Line announce new joint venture combining the three companies liner operations

USPTI opines that the strong/peak season will be short lived. We anticipate potential volumes to decrease from early October. To date space has been tight from certain origins (Shanghai for example) but still available creating the need for carriers to maintain relative low rate for peak season. We anticipate rates to stabilize for a few months in the $1300 to $1350 range to the west coast and $2300 to $2400 to east coast.

USPTI continue to actively negotiate with our core carriers to insure that we can provide our customers with quality reliable service at market driven rates.

Please contact your USPTI representative for update rate quotes and resolution of any supply chain issues.


July 20, 2017

Over the past several months the landscape of international ocean carriers has changed dramatically. Mergers, acquisitions and bankruptcy combined with ocean carrier alliances restructurings have been at the fore front of international trading news. Most recently COSCO announced the acquisition of OOCL. A brief summary of carrier activities is as follows:

  1. COSCO acquires OOCL
  2. COSCO and China Shipping merge
  3. APL is acquired by CMA/CGM
  4. Hapag Lloyd and United Arab Shipping merge
  5. Hanjin files for bankruptcy
  6. NYK, MOL and K Line announce new joint venture combining the three companies liner operations

Market share of top 4 carriers ( Maersk Line, CMA/CGM/APL, Med Shipping and COSCO/China Shipping after takeover of OOCL) is approximately 54% of global capacity. The container shipping industry has “officially” become an oligopoly.

The fight for market share is going to continue, there is still a significant amount of new vessel supply that is coming into the market over the next two years. Vigorous competition among carriers will continue with carriers protecting and attempting to increase market share at the expense of profit. Carriers continue to sell based on price and therein continues the problem of lower rates that are not sustainable.

Carriers continue to file monthly rate increase and peak season surcharges. To date carriers have had limited success in implementing increase but one can anticipate that as we move into the historical peak season cost will increase consistent with trading conditions. USPTI will continue to work with our carrier base to insure our clients quality and reliable service at market driven rates.

The carrier industry is historically a supply and demand business whereas rates rise when cargo is readily available and decline when trading conditions are poor. The jury is still out on future trading conditions. Globalization, protectionism, politics and general economic conditions are all impacting the perception and forecasted volume in the Trans-Pacific import market.

Logistic Partners Guidelines

A logistics company partner is often required in order to effectively run all aspects of a business within the transportation industry. However, logistics companies must be organized and consistently improving in order to meet client needs. USPTI proposes the top three ways in which to enhance operations:

1. Communicate well. Both internal and external communication is vital to running any successful company. All departments must work together to deliver optimal results for clients. Be sure to stay in touch with clients on a daily or weekly basis to let them know how things are going. This also provides opportunity for you to address any questions or concerns.

2. Comply with mandates. Always stay educated on what is going on regarding the various regulations and expectations for the transportation industry. These rules may present challenges for you or your clients, so you must beware of every aspect of these mandates in order to come up with a solution.

3. Encourage feedback. Your company’s success relies exclusively on whether or not your clients are happy with your work. Always ask for feedback on each assignment in order to assure you are on the right track and performing your services to perfection. Receiving feedback also an excellent way to ensure you are promoting a positive work environment for strong work ethics and output


April 2017

Even before last October’s announcement that the three Japanese shipping companies would merge their container operations, and the December announcement that Maersk would acquire Hamburg Sud, 2016 was already the most transformational year in the 60 years of container shipping. COSCO and China Shipping merged. CMA CGM acquired APL, Hapag-Lloyd agreed to acquire UASC and Hanjin collapsed. That led to a massive restructuring of global vessel-sharing alliances that will take effect in just weeks. Meanwhile, with ocean carriers still struggling with overcapacity that most analysts say will remain at least for the next two years, if not longer, shippers are facing a new environment with many unknowns.

Trans-Pacific spot rates were more than two-and-a-half times the level in June and they’ve held fairly firm as carriers increase scrapping levels and idle ships. Throw in the new Trump administration and its protectionist rhetoric that appears to be turning into policy, and the trans-Pacific is in the midst of a sea change. Given all these moving parts, what is the pricing and demand outlook for 2017? How will the new alliance rollouts impact service? And how will the new administration’s policies impact US importers and exporters?

The implementation of the new alliances will create disruptions to service as carrier reposition vessels to corresponded to new sailing schedules, port rotations and terminals. The phase in will be longer than normal due to the shear scope and number of carriers in each alliance.

The political impact to trading conditions cannot yet be determined although the current administration policies seem to favor protectionism over free trade.

Once again 2017 will be a challenging year and USPTI is prepared to assisting and resolving any issues impacting your import program.

Thank you for your support and USPTI looks forward to a long term relationship of service.

Carriers announce canceled sailings after Chinese New Year

Container line alliances have announced a host of sailing cancellations in the post Chinese New Year period ahead of the traditional sharp decline in cargo bookings after the mainland’s biggest annual holiday.

The Year of the Rooster begins on Jan. 28, with shippers racing to get their cargo loaded before Chinese factories close and workers take off for much of the month of February. Demand is not expected to improve much before April.

The 2M Alliance of Maersk Line and Mediterranean Shipping Co. and the G6 Alliance carriers — APL, Hapag-Lloyd, Hyundai Merchant Marine, MOL, NYK Line, and Orient Overseas Container Line — are blanking several sailings on the major east-west trades.

Although the post CNY period has always been quiet, the run up to the Chinese holiday has been anything but. Spot freight rates on Asia-Europe remained surprisingly strong as year-end approached, with forwarders reporting difficulties in securing space on the trade and that carriers were resisting discounts.

“Space is very tight from China to North Europe and the shipping lines are not prepared to bargain. They have told me that if I book at a discounted rate they will not be able to guarantee my cargo schedule,” the owner of a Hong Kong-based forwarder told JOC.com.

Trans-Pacific shippers are also expecting contract rate hikes. by JOC.com found that 46 percent were preparing for increases of 1 to 10 percent in contract pricing. More than 20 percent of respondents expect rate increases of 10 to 20 percent.

Please notify to your vendors to place booking as early as possible. Thanks !

The supply and demand in the Trans Pacific import market has shifted dramatically in favor of ocean carriers.

Due to the historical peak season combined with the capacity disruptions created by the financial problems and pending bankruptcy of Hanjin the demand for space to the west coast is currently above available capacity for all carriers servicing the west coast. The shortage of available capacity to the west coast is allowing carriers to charge premium prices for their services. The shortage of available capacity to the west coast will most likely continue thru the middle of October 2016 at the minimum.

Additionally one can anticipate the increased volume coupled with a shortage of chassis created by the inability of truckers to return Hanjin boxes to the terminals will potentially create additional delays at west coast ports of entry.

The situation to the east coast is somewhat better with capacity and demand much closer aligned.

USPTI continues to work closely with all our carriers to insure we can secure space and provide you with a quality reliable service. Our goal is to minimize any potential disruptions to your supply chain.
Please insure your transport requirements are communicated to USPTI as far in advance as possible. A minimum of 14 to 21 days prior to cut off at origin would be appreciated.
Thank you for your support and we look forward to a long term relationship of service.
Please contact your USPTI representative with any questions or concerns.

Hanjin shipping Co. has filed for court receivership and is facing the possibility of bankruptcy

For the first quarter, Hanjin Shipping reported a net loss of 261.1 billion South Korean won ($233.6 million) on sales of 1.59 trillion won, citing freight rates’ drop to record lows. That spurred the shipping line to file for court receivership , a complex international process that will mean the judicial system will decide whether Hanjin will remain a going concern.

Hanjin hasn’t been alone in struggling in the current market, analysts said.

“This is a reflection of the current turmoil in the shipping markets where oversupply of ships is simply killing the market,” Pradeep Rajan, senior managing editor for Asia Pacific shipping and freight at S&P Global Platts, told CNBC’s “Squawk Box” on Friday. “It’s simply too many ships and freight rates at historical lows.”

Hanjin represented nearly 8 percent of transpacific trade volume for the U.S. market.

One of the ripple effects is higher freight rates for the transpacific market. USPTI anticipates the higher cost to be short term and applicable during the historical peak season. Freight rates for routes out of Asia have surged as much as 50 percent, according to media reports.

Even if Hanjin were to entirely colaspe, it is not clear that it would affect the industry much.

“Ironically, the collapse of Hanjin will do nothing to address the excess capacity in the industry,” IHS Markit’s Knowler said, noting that the ships it operates will be sold or taken over with other charters.

“Hanjin exiting the market will not reduce the overall amount of ships,” he said. “It doesn’t ease the fundamental problem of too many ships and too little cargo to put on them.”

Knowler didn’t expect Hanjin to herald a wave of shipping failures, but he noted that it could speed up efforts to consolidate the industry into fewer players.

But Kiwoom Securities’ Yoo was slightly more optimistic, taking Hanjin’s likely demise as a sign that shipping rates may have hit bottom.

He expected that U.S. demand will begin to pick up, while China’s demand would stabilize and the European Union’s malaise would bottom, likely leading to improvement in global trade.

USPTI opines that indeed freight rates will increase in the short term but stabilize at levels consistent with trading conditions once the shook factor has worn off and in fact carriers are already planning and announcing additional incremental capacity to fill the temporary void created by the Hanjin financial news. The ocean transport business has historically been a long term cyclical business with the gaps between supply and demand capacity following a similar pattern very 4 to 6 year cycle. We believe rates will stabilize at near compensatory levels (albeit lower than current spot rates ) within 60 to 90 days and allow trading conditions to dictate actual price.

Trans-Pacific Inbound Market Update

Dear Valued Customer:
As we move through the historical peak season in the Trans-Pacific Import trade, USPTI would offer the following comments related to current and anticipated trading conditions. Overall cargo volume continues to increase.

East Coast With the opening of the expanded Panama Canal, the anticipate potential for larger ships to call East Coast ports has arrived and thus the rates will not be as volatile as West Coast rates. Therefore do not foresee any mid-term space shortage thereby limiting the carrier’s ability to secure substantial rate increase.

West Coast Rates and capacity remain volatile with the potential for mid-term volume to exceed capacity thus allowing rates to potentially increase consistent with supply and demand.

Please note that several external factors may impact the ability to efficiently move cargo in the upcoming weeks:
G 20 meetings will take place in Ningbo on September 4 and 5. Many factories have been ordered to shut down temporarily close to eliminate congestion and pollution. These closures could not only disrupt production but also port operations in both Ningbo and Shanghai.

The Moon Festival Holiday will be celebrated on September 15. One could anticipate early closure and late openings of factories potentially impacting your supply chain.

National Holiday will be observed on October 1. One could again anticipate early closure and late opening of factories impacting your supply chain

We greatly appreciate your support and request you give USPTI a much advance booking notice as possible (preferably two to three weeks prior to required sailing). Your advance booking notice will allow USPTI to evaluate available sailing and rate options (low to high) in an effort to provide you with quality on time transportation consistent with your delivery requirements.

Please contact your USPTI representative with any questions.
Again, thank you for your business.

Trans-Pacific Inbound Market Update

As we approach the historical peak season in the Trans-Pacific Import trade, USPTI would offer the following comments related to current and anticipated trading conditions. Overall cargo volume is increasing at a rapid pace.
East Coast With the opening of the expanded Panama Canal, we anticipate the potential for larger ships to call East Coast ports and thus the rates will not be as volatile as West Coast rates. Therefore do not foresee any mid-term space shortage thereby limiting the carrier’s ability to secure substantial rate increase.

West Coast Rates and capacity remain volatile with the potential for mid-term volume to exceed capacity thus allowing rates to potentially increase consistent with supply and demand.

We greatly appreciate your support and request you give USPTI a much advance booking notice as possible (preferably two to three weeks prior to required sailing). Your advance booking notice will allow USPTI to evaluate available sailing and rate options (low to high) in an effort to provide you with quality on time transportation consistent with your delivery requirements.

Please contact your USPTI representative with any questions. Thank you for your business.