Ocean Freight Rates from China to US Have Tripled Compared To Last Year
Due to current backlogs as a result of the pandemic, space on container ships from Asia to the US is extremely tight and rates have gone through the roof. Booking space is even more problematic and could easily take 4-6 weeks to get a booking. As a result of the high demand and tight space, eastbound transpacific ocean freight rates are now more than 3 times higher than the same period last year.
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Transporting Railcars And Railroad Tampers By Sea
Railcars and railroad construction cars are shipped internationally on several types of ships such as breakbulk carriers, RO/RO carriers and containerships. Breakbulk ships lift the railcars from the pier into the hold with ship’s onboard gear. RO/RO carriers load the equipment on rolling mafi platforms that get towed into the hold via the ships massive ramp. Containerships utilize flat rack containers which are containers with no sides and no roof, designed to carry oversized equipment. The loaded flat racks are lifted on board ships with dockside gantry cranes. Lifting and securing these heavy units is planned with the use of engineering drawings that take into account center of gravity, lifting angles and lashing points. The upcoming Texas and California high speed rail projects will involve these types of shipments.
(Photo credit: ocean_network_express via Instagram: “Special cargo shipment from Europe to Japan”)
Sky High Ocean Freight Rates From Asia Attract Government Scrutiny
Ocean carriers have been skipping sailings to shore up their bottom line during the virus-induced downturn in manufacturing and consumer demand. Tactical blank sailings combined with record breaking rate spikes in the trans-Pacific trade have increased carrier profitability now that manufacturing and demand are coming back online. Decreased capacity and increased rates are helping ocean carriers recover at the expense of the global economy while suppliers struggle to meet pent up consumer demand. Government regulators have begun to exert pressure on ocean carriers to restore capacity and restrict rate increases. It has been customary to blank sailings during the Chinese Golden Week holiday, however the threat of intervention will surely impact carrier cost manipulations and capacity decisions.
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(Photo credit: OOCL)
Critical Cargo Bypassing Bottleneck at Ocean Ports Aboard Chartered Passenger Aircraft
Bottlenecks in the global supply chain are being bypassed by repurposing passenger aircraft for critical cargo. With retailers worldwide closing shop, warehouses becoming backed up with undelivered goods, increasing trucking restrictions and driver shortages, importers are being forced to delay delivery of goods that can’t be sold or stored. This clogs ports with containers and slows critical food and medical supply chains. Ocean carriers are rerouting containers to transshipment ports and yards close to destination so they can reach markets more quickly when business resumes, while keeping major ports unclogged. To keep food and medical supply chains flowing, critical cargo is moving on passenger aircrafts that have been idle since the travel ban.
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(Photo credit: IAPH/International Association of Ports and Harbors)
Ocean Freight Rates
Ocean freight rates are impacted by reversals in short and long term demand as a result of the trade wars. According to some analysts, container rates from China typically increase with demand before tariff increases take effect. Once the tariffs are in place, demand softens, creating downward pressure on freight rates. Read more from Freightwaves here.