Market Update: November 22, 2017
Ocean and air freight rates and trends for the week of November 22, 2017.
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Air Freight Market Updates
E-commerce continues to drive high demand and high rates
Strong e-commerce sales continue, with rates still climbing -- although, notably, this week’s rate increases aren’t quite as high as last week’s.
High demand has led to several weeks of space constraints, and this week is no different. (That’s why Flexport has begun chartering its own freighter flights from Hong Kong to Los Angeles.) The space crunch will continue through peak season.
We expect rates to remain strong, but as we move past Thanksgiving and into December, rates will increase less sharply.
Congestion and delays at FRA
If your cargo is being routed through FRA, you should expect delays. Ground handling operations are very constrained due to increasing volume into FRA, and we’re seeing extensive delays for pickups and deliveries.
Ocean Freight Market Updates
No GRI for November 15; December 1 GRI announced
The Nov. 15 GRI was canceled, and rates to the U.S. are down slightly. Asia - Europe rates are down as well.
Carriers have announced a GRI of $700/FEU for December 1. We expect this be only partially implemented.
Peak season for Asia to Oceania
This is the traditional peak season for Asia to Oceania -- rates are high, and space is very tight. If you’re shipping to Australia, we recommend booking 2 weeks in advance.
Rates will increase in advance of Chinese New Year
Starting in mid-December, we’ll see rates begin to go up in anticipation of Chinese New Year. This will constrain space, too. Expect more GRI announcements for December and January.
Other Freight Market Updates
Bad congestion at LAX
We’re seeing significant wait times for truckers at LAX. If you have cargo routing through LAX, expect delays and trucking wait fees.
Savannah and Atlanta: congestion and chassis shortage
Savannah and Atlanta are still experiencing congestion and chassis shortages. If your cargo is being routed through Savannah or Atlanta, you may see chassis split fees and/or storage fees if your trucker needs to make an extra trip to pick up a chassis.
Fuel tax increase in California is driving up fuel surcharges
As of November 1, California has increased its diesel tax to 36 cents per gallon (this is a 20-cent increase). As a result, many trucking providers are implementing higher fuel surcharges.
The ELD mandate is approaching
Beginning December 18, truck drivers will be required to utilize Electronic Logging Devices (ELDs). This will change the game for long-distance trips, and after implementation, we’ll see a slight increase in rates across the FTL market.