Freight Shipping Forum

I noticed the GRI always seems to coincide with the pre Christmas volumes of Walmart. Read an article that said they ship the equivalent of a few small countries total GDP. I have also seen some advantages when shipping ocean freight from China and the far east of going through the canal. Using all water service during those times when the port at long beach gets congested helps ocean freight transit times by as much as 6 days. And don't forget port strikes on the west coast too!

Ocean shipping prices should start to ease as the super sized cargo ships come online over the next few years. However, there might only be a certain number of ports to service the ocean going vessels.

To All Ocean Shippers: Please Read Below Updates

Space on ocean vessels leaving Asia is tight leading up to Chinese New Year in three weeks, and shipping lines are capitalizing by charging importers at least $200 per container to guarantee the shipment makes its intended voyage.


Carriers are levying the charge primarily on cargo consolidators, known as non-vessel-operating common carriers. It appears direct shippers, known as beneficial cargo owners, are not being charged an extra fee to get their shipments on vessels.


“I’m still getting rolled,” said Pat Moffett, vice president of global logistics at Audiovox, using the industry term for cargo pushed from its intended voyage to a later ship. Although some of his bookings are being held over, no carrier has tried to get a dime from him to secure space, and they had better not try it, Moffett said.


Many importers, including beneficial cargo owners, began paying a $400 emergency surcharge on Jan. 15. The Transpacific Stabilization Agreement, the carrier discussion group whose members carry more than 90 percent of containerized imports from Asia, issued a voluntary guideline to that effect, and it seems to be working.


“We’re taking the full $400,” said Dave Akers, managing director of the Toy Shippers Association. Most of his members, however, are beneficial cargo owners, and they have not been approached about paying anything additional to get their shipment on a vessel, he said.


In addition to the $400 emergency surcharge carriers are charging to stem the huge losses of revenue they experienced during the recession, a number of lines are hitting up NVOs for an additional $200 to $400 per FEU to secure space.


The capacity crunch in the Pacific is occurring for two reasons. Carriers last year were caught with a significant capacity overhang when imports from Asia suddenly dried up. Freight rates dropped precipitously from about $2,000 per FEU to less than $900 for a brief period last summer.


Carriers responded by removing vessels from the trade, combining services with other carriers in vessel-sharing arrangements or slowing their ships.
As a result, capacity tightened considerably last fall, and the space constraints have carried into the new year.


The emergency surcharge is referred to as ERC, or Emergency Recovery Charge. This money is being used to offset carrier losses from '09 and will be used to bring dry docked vessels back into service, or so I have been told by various industry "experts". Beginning February 1, 2010, another acronym has been added to the already long laundry list of ocean charges and it is the CRP or Container Revenue Pricing. I referred to it as RBB or Revenue Based Booking. However, CRP is now the official term. In any case whether it is CRP or RBB, this will determine the loading priority of containers.


These problems are a result of the carriers placing vessels in dry dock and empty containers in storage yards around the world when the economy went totally soft. Now with the economy showing some signs of rebounding, demand has outpaced supply. Carriers are slowly bringing vessels out of dry dock, but this process usually takes 60 days.


As I get updates from industry sources, I will let everyone know.

SaveOnFreight