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December 2, 2014  

 

 

 

 

Newsflash: Carriers postpone surcharges

 

MSC has shuttled its planned imposition of a port congestion surcharge on the West Coast.

By Chris Dupin |Friday, November 28, 2014

More container carriers have confirmed they are postponing plans to impose a congestion surcharge on cargo moving through West Coast ports. MSC, the second-largest container liner company, said it "has postponed the congestion surcharge for cargoes moving over U.S. West Coast ports. Although congestion at these ports continue to cause substantial delays to our clients, and considerable costs to ourselves, we have decided not to impose this charge at this time." In a notice dated Wednesday, Maersk, the largest container carrier, said "congestion is real and tangible, and a reality which will continue to impact the U.S. West Coast for the foreseeable future. That said, we have made the decision to delay the application.

 

Congestion forced shippers into air freight at height of the market, Drewry says

Excerpt from Journal of Commerce | By: Greg Knowler | December 1, 2014

 

HONG KONG — The U.S. West Coast port congestion drove shippers to air freight at the worst possible time with rates for air cargo at the seasonal highpoint of what is turning out to be the most robust peak season in years.

After four months of stable pricing, air freight rates surged in Oct. on the back of strong demand and the conversion from ocean shipping, according to Drewry’s container insight. This has temporarily reversed the long-term modal shift from air to ocean as shippers took to the skies to make sure their goods hit the stores in time for the U.S. holiday season.

Ocean carriers and terminals have been battling congestion in Los Angeles and Long Beach all year, but conditions have worsened in the peak-season months, severely disrupting container handling at the U.S. gateway.

As delays began to roll down the supply chain, some shippers pre-empted the disruption in the container sector by moving cargo earlier and via the longer all-water route to the U.S. East Coast. However, as the countdown to “Black Friday” and the start of the holiday season neared, more costly air freight solutions were required.

According to Drewry, high average rates on the Asia-U.S. route was responsible for most of the overall hike in east-west trans-Pacific air freight rates in Oct. By contrast, container freight rates on the route were in decline.

When the Nov. numbers come in, Drewry expects air freight rates will have continued rising as the shopping season picked up, while tighter capacity would have supported stronger pricing on certain trades. The backlog at U.S. west coast ports has the potential to soften the traditional drop in Asia-U.S. rates in Dec. and depending on how long the issue remains unresolved, could prop up air rates until Chinese New Year in February.

 

Our regulatory experts are monitoring the situation and keeping a close eye on labor negotiations, which began on May 12, 2014. In the meantime we are checking shipment status on a daily/hourly basis to see where our client’s cargo stands in movement towards its final destination. While we can’t control the situation we can keep you informed.

 

 The information contained in this newsletter has been compiled from various industry newsletters and other public sources. While we use reasonable efforts to furnish accurate and up-to-date information Page & Jones, Inc. is not liable or responsible for the accuracy or reliability of any information contained herein.

 



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