Seajet
 Shipping
 News

 
 

 

Late

June

2011

 


 

  

Far East Rates and Other Matters

 

 

Dear Customers and Friends of Seajet:

I am writing to you today to update you on a number of developments that I believe may be of interest to you.

 

Far East/Indian Subcontinent – Rates/BAF/PSS

Carriers have been announcing a GRI commencing with the new contracting season as of May 1st 2011. The increases circulated were more or less $ 320/20’ – 400/40’ – 450/40’HV and 505/45’. Basically everybody signed the contracts to be covered under a contract and not to be subject to tariff rates which would have been significantly more expensive. However very much as expected within 4 weeks the increases had pretty much eroded completely.

The next thing was to be the implementation of the Peak Season Surcharge (PSS) effective June 15. Now carriers back paddled and advised that the Peak Season would now become effective July 1st to the East Coast and July 15th to the West Coast and stay valid until November 30. The official numbers are identical to the numbers mentioned above under the GRI.

The latest increase published by the carriers is the Bunker Adjustment Factor (BAF) to become effective July 1, 2011. The official numbers are as follows:

To the West Coast and IPI (Inland Point via West Coast): Has been from March 1 up June 30 - $ 374/20’ – 468/40’ – 527/40’HC – 592/45’. Effective July 1 – September 30 - $ 454/20’ – 568/40’ – 527/40’HC – 592/45’

To the US East Coast: Has been from March 1 up to June 30 - $ 703/20’ – 879/40’ – 989/40’HC – 1112/45’. Effective July 1 through September 30 - $ 886/20’ – 1107/40’ – 1245/40’HC – 1401/45’

Here is a fact that did not get much attention. The major railroads have recently parked thousands of railcars obviously forecasting a slowdown in imports and in an effort to maintain current pricing. It is easier for railroads to do so due to limited competition and generally due to more discipline within the industry compared to ocean carriers.

Personally I believe that ocean carriers will try hard to implement the BAF in full as outlined above. Passing on increases as a result of increased fuel prices is the one area that ocean carriers have traditionally been able to push through as a group. However just today I have heard from Taipei that some carriers have indicated that they might be prepared to reduce the newly announced BAF levels again. That would be unprecedented. Furthermore I doubt that they will have the resolve to push through the PSS at least not in full and possibly not at all unless there is a sudden spike in import volume. It would also not surprise me to see rates going further down thus eroding some of and possibly all of the increases achieved by the BAF increase. No promises but this is what I believe could realistically happen. Right now rates to the US and Europe have been eroding steadily and no carriers have taken any capacity off the market. Let’s just hope that rates somewhat stabilize now to prevent a repeat of last year when rates had come down so far that carriers pulled out capacity en masse and it became hard to find space and rates went up sharply over a very short time span.

 

PierPass

Earlier in June The West Coast MTO Agreement (WCMTOA) has announced that it will raise current Traffic Mitigation Fee (TMF=PierPass) at the Ports of Los Angeles and Long Beach by$ 10.00/20’ and $ 20.00 for 40’/40’HC/45’ effective July 4th, 2011. Today we received an update saying that the implementation will now be postponed until August 1st, 2011.

 

Container Chassis Availability

 

The United States are the only major industrialized country to my knowledge where carriers have traditionally provided chassis to move their containers. Basically the cost of the chassis was part of their cost structure and thus part of the ocean freight rate. However carriers are now trying to distance themselves from the chassis business. However in typical fashion every carrier is going about this on their own and mostly little transparent way. At this point, many carriers no longer maintain their own fleet of chassis but have this farmed out to chassis leasing companies. This means that the chassis storage has moved off the terminal to sub-contracted chassis providers who take responsibility to maintain chassis however still at the expense of the carriers. Other carriers have already taken the next step by completely removing themselves from providing chassis so that truckers have to either buy their own or rent chassis from a chassis leasing company. In Boston for example COSCO has stopped providing chassis and truckers can lease them at the Columbia Coastal Pool for a fee of $ 57.00 covering the first three (3) days. Thereafter it is an additional $ 15.00 for day 4, 5, 6, 7, 8 and 9. It is $ 20.00 for days 10, 11, 12 and 13 and $ 25 per day 14 and each additional day thereafter. As long as space is available we are trying to ship on YML, Hanjin or K-Line but this is not always possible.

As always we thank all of you for your continued support and trust in Seajet. If you have any questions please feel free to contact us.

Sincerely yours,

Andreas Bauermeister,
President

 

 

 

 

  
 

   
   

Seajet Express Inc., 46 Arlington Street, Chelsea, MA 02150 - Telephone 617.884.0991 - www.seajet.com