Transport & Logistics mode

Captain Upply’s lane of week 9: Shanghai - Long Beach

February 27 2019

The market welcomes the announcement made last Sunday by the Trump administration to delay any action on customs taxes until further notice. Even if anticipated, this news has clearly cooled things down for Trans-Pac ocean freight rates.

We now observe the combination of coming upgraded fleet on the US west coast (USWC), and a still complicated situation in terms of congestion in the ports of Los Angeles / Long Beach, with an average of nearly 5 days to get a container out of the port. Warehousing is also still an issue with very little space available.

These combined factors may lead to a more structural decreasing trend on this trade, with the possibility to bridge this trend in the coming spring season.

However, the sword of Damocles is still over our heads, as everybody is now anticipating the next Xi-Trump discussion. A durable agreement to be found in this occasion is still very uncertain, despite the appeasement climate.

Shanghai-long-beach_captainupply

To conclude, rates are now certainly dropping but cargo exposure to additional D&Ds at terminal of destination is quickly increasing…faster than the market decrease.

To discover the latest trends on ocean freight rates, go to the benchmark page of upply.com!

See you next week,

Captain Upply

Photo Credit : Dreamtime

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Expert in Ocean shipping for 25 years, Jerome puts all his knowledge of the industry to contribution for Upply. Ship captain at heart, he has written the English-French Lexicon of Containerized Shipping (Paris: CELSE, 2001).