Lines Play Waiting Game on Transpacific

(International Freighting Weekly – Damian Brett)

Carriers keep capacity tight ahead of contract negotiations and rate rises

U.S.-destined containers are piling up in Chinese ports and bookings are being delayed as carriers keep a tight control on capacity in the run up to annual contract negotiations and May’s rate increases. Industry contacts told IFW that carriers had avoided re-introducing tonnage to the trade because they do not want there to be spare capacity while annual contracts are being negotiated at the end of April and because they want to implement rate hikes of between US$800 and $1,000 per 40ft container in May.

The tight capacity has created an auction for space, with carriers prepared to roll containers – cancel the booking on one ship for a ship leaving later – in favour of higher-paying cargo.

One contact said space from north China, particularly Tianjin, Qingdao and Dalian, was extremely tight, with most vessels heading to Vancouver, Tacoma and Seattle running full. Space from south China was slightly easier to come by.

GAC regional logistics manager Peter Orange said: “The carriers are pushing for general rate increases (GRIs) – whether they get the full amount depends on how the contract negotiations go. Contracts are very important to us, not just in terms of space, but also in terms of access to capacity – particularly out of China.” Read more here.