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July 23 2018

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10 The Journal of Commerce | July 23 2018 www.joc.com Peak-Season Forecast: Ocean and Intermodal Special Report lingering issues tied to the newly formed Ocean Network Express, and speculation that SM Line will end its trans-Pacifi c services, something the carrier denies. The double-digit year-over-year jump in eastbound trans-Pacifi c spot rates in the fi rst week of July bodes well for carriers, though much of the increases are tied to higher bunker fuel adjustments and emergency bunker fuel surcharges, both driven by a 53 percent year-over-year in- crease in bunker prices. General rate increases (GRIs) imposed July 1 helped drive the cost of shipping an FEU from Shanghai to the East Coast up 13.7 percent from one year ago to $2,623 and US IMPORTERS FROM Asia face a peak season mired with a combination of factors they've never seen at the same time — from tari s to high bunker fuel prices and surface transportation rates — and signs that space could be the tightest in years, translating into higher-than-usual spot rates and more cargo delayed at the dock. Whether ships from Asia attain the sought-after utilization levels in the high 90 percentiles hinges on whether forecasts of 3 to 5 percent growth in volume for the rest of the year are realized and the extent of carriers' cancellation of services. Further coloring the peak season, which carriers depend on to secure higher spot rates, are Tit-for-tat tari s and fuel costs are unnerving US importers of Asia goods By Bill Mongelluzzo 16.7 percent to $1,555 to the West Coast, according to the Shanghai Containerized Shipping Index are published on the JOC Shipping and Pricing Hub. "We're counseling our customers to prepare for a tight space situation from mid-July through September, for increasing spot market prices and to secure their capacity needs early by giving us their forward booking forecasts," Simon Munn, vice pres- ident of full containerload product and capacity management at DHL Global Forwarding, wrote in a LinkedIn post in early July. His com- ments corroborate what importers are saying: that volumes this peak season will be greater than last year by a few percentage points. "Furthermore, we feel that increased bunker costs and charter rates, allied with the lack of spare capacity in the charter market, will deter the carriers from putting more capacity into the market over the coming few months (other than the small but intriguing new express service that APL is planning to intro- .% increase in cost of shipping a 40-foot container from Shanghai to the East Coast

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