Market Update: March 21, 2018
Ocean, trucking, and air freight rates and trends for the week of March 21, 2018.
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Ocean Freight Market Updates
March 18 GRI is Canceled
Carriers have canceled the March 18 GRI. Rates are down from Asia and India to the U.S., as well as from Asia to Europe.
Rates for Europe to the U.S. are holding steady. There’s potential for rates to increase starting April 1 with weather disruptions and port closures in the past week in the UK.
U.S. Export Rates Remain Steady
Rates remain stable for U.S. exports, but there’s a potential increase on the horizon due to bunker prices. No GRI was implemented.
ONE Launches April 1
ONE (Ocean Network Express) will officially launch on April 1. The new line represents the integration of the three major Japanese carriers: MOL, NYK, and ‘K’ Line.
New services will be announced, and we’ll see changes to some strings served by THE Alliance -- different ports of call, and more capacity to the Southeastern U.S.
Air Freight Market Updates
HK Fuel Surcharge Decreases
It was announced that the fuel surcharge out of Hong Kong has decreased from $.27/kg to $.20 as of April 1. This announcement comes a year after the Hong Kong Civil Aviation Department (HKCAD) announced that airlines will be permitted to levy air cargo fuel surcharges for flights originating from Hong Kong.
Air France Strikes Continue
There’s a strike announced by Air France employees for Friday, March 23rd, so expect delays and possible cancellations.
Trucking Market Updates
Ocean Carriers Recoup Costs With Levy Emergency Fees
As a result of the electronic logging device (ELD) mandate, the truck capacity pressure is affecting inland cargo transportation including drayage, railroad, transloading, and long-haul truckload. In response, beneficial cargo owners (BCOs) are paying some ocean carriers an extra $300 per container for existing contracts. These charges accompany other reactions, including raising tariffs and suspending U.S. store-door deliveries.
Another factor contributing to the negotiation of service contracts is the higher surface transportation costs.
Trucking Costs Expected to Raise April 1
The ELD mandate will likely cause additional trucking rate increases when noncompliant truck drivers are placed out of service by law enforcement on April 1. Updates are also expected to negatively affect trucking productivity.
Ocean carriers expect that decreased productivity and rail ramp delays will also slow down chassis turnaround time.