BOC Bullets to Help the USA Importer During the Current Shipping Crisis
After another challenging shipping week, here are some tips and market updates we wanted to share to help our customers deal with this current shipping crisis.
1. Instruct your factories in Asia to inspect all empty containers very closely when picking up and loading for any holes or signs of damage. Your vendor should follow the 7 point inspection guidelines (https://www.cbp.gov/sites/default/files/documents/7_pcic.pdf) and take detailed pictures of the inside and outside of the container, including capturing the container number in the photos. This inspection process is your best protection to help your cargo from getting water damage. With a shortage of containers, many Container Yards are releasing lower grade containers that might not be seaworthy and leak water on your cargo.
2. Consider using the premium ocean services for urgent cargo. We see even spot rate ocean cargo (which generally gets priority) being rolled at origin or stuck at transshipment ports for one to three weeks. In the past 45 days, the ocean carriers are rolling approximately 1 of 3 all containers in the Transpacific market.
3. Plan for 1-2 week delays of availability for arriving cargo to the USA because of record volumes, lack of chassis, slow unloading and loading of vessels at the congested origin and destination ports, and extreme global trucking shortages. We have seen some USA truckers refuse to accept delivery orders from their regular USA import customers for 2-4 weeks. The delays unloading the vessels arriving LA/LB are being exacerbated by a shortage of stevedores at LA/LB terminals due to additional gangs being assigned for each shift because of the full ships, larger ships and extra loaders being deployed. One notable volume record was the Port of LA reported their largest container month ever in September – 888,625 TEU – and no blank sailings.
4. Ship essential goods early, well before the Chinese New Year holidays begins on February 12th. Door to door delivery times are expected to continue to be delayed well into 2021, and Asian bookings remain very strong with November space almost entirely consumed. We are also seeing Shipping Orders (SO’s) being released very late by the ocean carrier just prior to vessel cutoffs. The ocean carriers are intentionally delaying the SO’s to enable them to capture as much as possible of the higher-priced premium cargo and delay shipping the lower-priced fixed cargo to maximize their profits. Overall, market capacity is continuing to worsen. Due to lack of charter vessels and equipment shortages, the carriers so far have deployed an inadequate amount of TP November extra loaders with COSCO only adding three sweepers in weeks 45, 46, and 47 to USWC and Maersk providing some limited relief with Suez service transshipping over Europe to the USEC.
5. Prepare for higher air freight costs in the coming weeks. There are substantial rises in air freight prices on major lanes out of China and other parts of Southeast Asia, as surges in demand meet continuing constrained capacity due to Covid’s devastation of the PAX market. The simultaneous deluge of air freight caused by the launches of new versions of products(Apple’s 5G phones, Microsoft’s Xbox, Sony’s PlayStation, etc.), growing demand for 2nd wave PPE items, and a final push to move holiday gifts creates the perfect storm.
Please contact your BOC representative to help you with these issues or any other specific problems. We will get through this crisis together.