Rachel Shames’ Market Update: Week #5
The TPEB market is very tight leading up to the Lunar New Year holiday. Many Asia origins will observe the holiday for about a week, beginning around January 28.
There is some slight softening of the highest premium level rates in anticipation of slower volumes in February, during and after LNY holidays. However, demand remains high, as do shipper backlogs, while blank sailings continue. Carriers are building rollover pools to fill February vessels as well. Overall, market rates remain very strong and demand for ocean space will continue to outpace supply, even in the shortest term.
Several ports in China are experiencing delays due to COVID containment measures. Ningbo, Tianjin, and Dalian are all experiencing slowdowns. China’s zero-tolerance COVID policies have potential to create even more disruption in the weeks to come, especially with China aiming to avoid any major impacts to the Olympic games beginning mid-February.
Carriers are continuing BCO contract negotiations on TPEB lanes this month. Some are starting discussions with NVOs, but many will wait until at least February 1. Overall, rates are high and space is extremely limited. Most contracts are subject to reductions in MQCs/allocation. Very few carriers are offering new contracts at all; even the largest BCOs are limited to their current ocean partners and allocation, at best. We will continue to see significant volumes moving on floating/spot rates in the year to come.
US port congestion remains severe. There are now over 100 vessels waiting to berth at LAX/LGB, and ports along all ports are struggling to keep cargo moving. Truck and warehouse capacity continues to pose a major challenge in all major markets. Prices are increasing routinely, and capacity can be unreliable for non-regular business.
The winter season is already bringing impacts to our main service areas in the East and Midwest regions. We can expect occasional weather challenges for the next couple of months.
Note Yantian is limiting in-gate of export (China outbound) containers to 4 days prior to vessel berth due to significant congestion in the terminal yard. This means a shorter window for shippers to in-gate containers as factories are running out of time to get containers loaded and out of their yards prior to CNY holiday. We are seeing some bookings impacted – if factories cannot work around the new in-gate schedule, they are having to cancel bookings or roll until after the holiday.
Your CVI team is here to assist you through these current market challenges. Ocean freight, air freight, domestic road/rail, and Customs Compliance – count on our dedicated professionals to care for you and your supply chain. Call us and let us show you what we can do!
Director, Pricing & Procurement
CV International, Inc.
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Rachel serves as Director, Pricing and Procurement for CVI. Her responsibilities include vendor selection, contract management and negotiation, transportation pricing, FMC compliance, and international agent network management.
Rachel began her career in international shipping with CMA-CGM America. She joined CVI in 2011, gaining experience in various departments with a focus on inside sales and marketing for the company. In 2014, Rachel assumed the role of Manager, Transportation, working on service procurement and development of client proposals. She has served in her current position since 2018.
A native of Norfolk, Virginia, Rachel earned her bachelor’s degree from the University of Michigan in 2005. She holds a Master of Business Administration with a concentration in Maritime and Supply Chain Management from Old Dominion University.
– Rachel Shames, Director, Pricing & Procurement, CVI
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