Digital Edition

August 6 2018

Issue link:

Contents of this Issue


Page 5 of 63

6 The Journal of Commerce | August 6 2018 Spotlight Coming weeks to test trans-Pacific spot rates Eastbound trans-Pacific spot rates held their strength in July, with prices up 24 percent to the US East Coast and 41 percent to the West Coast, compared to three weeks earlier. The next few weeks will help reveal how much of carriers' nearly 7 percent in projected cuts in capacity are being driven by higher operating costs and supply discipline, and how much is their hedge that US tariƒs on Chinese goods will bite. The spot rate for shipping a FEU from Shanghai to the US East Coast in the week ending July 20 was $2,650, down 2.2 percent from the prior week. Within the same period, the US West Coast rate was $1,616 per FEU, down 4.1 percent. Bunker fuel prices, up by more than 50 percent from last year, also are putting upward pressure on spot rates. Import volume has been robust for early summer and is expected to accelerate in the coming months. According to Global Port Tracker, imports in the first half of 2018 increased more than 4 percent, and record months for merchandise imports are expected in July, August, and October. Global Port Tracker is published monthly by the National Retail Federation and Hackett Associates. Capacity utilization rates are also high during this pre-peak- season period, averaging 92 to 93 percent to the West Coast and 95 to 97 percent to the East Coast, according to shipper and carrier sources. The next few weeks will be critical in determining if imports remain strong into autumn, or if the June-July spurt in traƒic reflected a rush by retailers and other importers to get ahead of Trump tariƒs. Approximately 60 percent of Asia imports to the US move under service contracts, which generally run from May through April, with the rest being moved by importers who only use the spot market, or shippers with contracts that have maxed out their minimum quantity commitments. Many shippers have clauses in their contracts to prohibit the rolling of cargo, or the delaying of cargo for a sailing later than was booked. When spot rates rise, carriers ošen roll contracted cargo for higher- paying cargo bought on the spot market. ILWU rank and file to elect new president West Coast longshoremen soon will choose between two moderate candidates, both of whom are current International Longshore and Warehouse Union (ILWU) oce holders, to replace retiring International President Robert McEllrath. Ballots to elect a new president were mailed to the membership on July 23. The new president — Ray Familathe, vice president (mainland), or Willie Adams, secretary-treasurer — will begin his tenure during a period of relative calm on the West Coast. The ILWU veterans are considered to be moderate leaders who respond to the wishes of the rank-and-file while possessing an appreciation for the importance of labor peace in protecting West Coast ports' market share. The ILWU and Pacific Maritime Association last year voted to extend the existing contract until July 1, 2022, guaranteeing coastwide labor peace after a tumultuous period of work slowdowns and employer retaliation from Oct. 31, 2014, until a tentative contract was reached in February 2015. Labor disruptions during the 2002 and 2014-2015 coastwide contract negotiations contributed to a steady loss of West Coast market share to East and Gulf Coast ports during the past 15 years. McEllrath this year reached the mandatory retirement age of 65. A longshoreman since 1969, he held various positions in the union before being elected international president in 2006. McEllrath was re-elected in 2009 and 2012. He is a second-generation longshoreman. Executive Editor, The Journal of Commerce and JOC Events: Chris Brooks 609 649 2181, Executive Editor, The Journal of Commerce and Mark Szakonyi 202 872 1234, Managing Editor: Barbara Wyker 908 777 3217, Senior Editors: William B. Cassidy Trucking and Domestic Transportation 202 872 1228, Bill Mongelluzzo West Coast 562 428 5999, Hugh Morley Northeast, Mexico 646 679 3475, Eric Johnson Technology 213 444 9326, Janet Noday Breakbulk and Heavy Li• 251 473 2742, Greg Knowler Europe Editor, Maritime & Trade, IHS Markit +44 7976798770, Turloch Mooney Global Ports, Maritime & Trade, IHS Markit +852 9011 9109, Associate Editor: Ari Ashe Southeast Ports, Intermodal Rail 202 548 7895, Web Editor: Joseph Lazzaro 917 309 0148, Data Analyst: Dustin Braden 646 679 3450, Senior Content Editor: Alessandra Gregory Barrett, 860 248 5238 Senior Designer: Sue Abt, 862 371 3534, Designer: Bryan Boyd, 908 910 7849, Publisher: Tony Stein, 770 295 8809, Sales: Cindy Cronin, Strategic Account Manager Southeast, Gulf, Canada sales, 954 551 8305 Zachary Gorman, Account Executive Northeast, Illinois sales 646 679 3466 Jean Gibbons, Senior Sales Executive West Coast, Midwest sales, 706 469 7160 Ria Van den Bogaert, Sales Representative Europe, Middle East sales, +32 2 569 8905 Alex Remstein, Associate Sales Specialist Reprints/Classifieds/Copyrights, 646 679 3418 For Magazine Subscription Customer Service: 450 West 33rd St., 5th Floor, New York, N.Y. 10001 973 776 8660 • 800 952 3839 Executive Director, Editorial Content, Maritime & Trade, IHS Markit, Peter Tirschwell Executive Director, Media & Events, Maritime & Trade, IHS Markit, Amy Middlebrook Manager, Production, Carmen Verenna Product Manager, JOC, Jesse Case The Journal of Commerce ©2018 The Journal of Commerce — All Rights Reserved For more information, visit our website,

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - August 6 2018