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July27, 2015

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22 THE JOURNAL OF COMMERCE JULY 27.2015 SPECIAL REPORT CONTAINER SHIPPING: PEAK-SEASON FORECAST THE CURTAIN WENT up in July on a peak season that is about as different from last year's as can be imagined. Most trans- Pacifi c supply chains are almost back to normal after months of severe West Coast port congestion during contract negotiations between the International Longshore and Warehouse Union and the Pacifi c Maritime Association. With the return of a semblance of normalcy to the trade, some benefi cial cargo owners aren't shipping their holi- day season shipments as early this year as they did in 2014, when they sought to beat West Coast labor disruptions. The peak season has traditionally started in July, but many BCOs appear to be delaying shipments until August or even September. Spot trans-Pacifi c freight rates have eased in the months since West Coast port congestion sopped up some of the vessel overcapacity on the trans-Pacifi c, but they may rise during the peak sea- son as carriers implement general rate increases and a peak-season surcharge. Over the longer term, however, spot rates are likely to trend downward as carriers continue to cascade excess ton- nage from the Asia-Europe trade onto the Pacifi c. Some changes caused by the pro- longed port disruptions last fall and winter seem likely to persist. A signifi - cant amount of trans-Pacifi c eastbound volume may have shifted permanently to the all-water route to the East Coast, as shippers seek to avoid any recurrence of the port congestion that dogged their supply chains through West Coast ports last winter. "A lot of that shift has already hap- pened. Now the question is whether or not that cargo will move back to the West Coast," said Jonathan Gold, vice president for supply chain and customs policy of the National Retail Federation. "Shippers are looking at shifting back to the West Coast now that things have settled down, but there are still conges- tion issues in Los Angeles-Long Beach and Oakland because of the bigger ships and chassis shortages, and we've got to fi gure out a way forward." Carriers have been quick to meet the demand for more all-water capac- ity to the East Coast. "There's a lot more additional tonnage coming to the East Coast via the Panama Canal," said Neil Dekker, director of container research at London-based research and consult- ing fi rm Drewry. Carriers have launched six services from Asia to the East Coast since the beginning of 2015, with fi ve of those routed through Panama. Although the existing canal limits transits to By Peter T. Leach SHIPPERS GET BACK TO THINKING ABOUT WHAT MATTERS IN THE TRANS-PACIFIC: SUPPLY, DEMAND, TIMING AND ROUTING

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