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Sept.19. 2016

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Page 20 of 55 THE JOURNAL OF COMMERCE 21 CONTAINER SHIPPING SPECIAL REPORT TRANS-PACIFIC INBOUND CONTAINER rates are soaring in the aftermath of the col- lapse of Hanjin Shipping, but it's unclear how high they'll go in the next few months as new capacity fl ows into the market to handle the orphaned Hanjin cargo. Prior to the bankruptcy of the world's seventh-largest container line, which brought its worldwide operations to a sudden standstill on Aug. 30, trans-Pacifi c carriers were planning to implement a Sept. 1 general rate increase of $600 per 40-foot-equivalent container unit from Asia to the West Coast. Whereas in normal times the success of such a GRI would have been questionable at best, this time there was no doubt. The increase was dramatic: The spot rate from Shanghai to the US East Coast soared nearly 45 percent to $2,441 per FEU from the previous week, according to the Shanghai Shipping Exchange, and 51.4 per- cent to $1,746 per FEU to the West Coast. On top of that, carriers announced a $600 peak-season surcharge to take effect Sept. 15, which also stands a good chance of holding, and another Oct. 1 GRI. At the very least, sources say, the Sept. 1 PSS stands a good chance of taking effect, taking trans-Pacifi c spot rates to the West Coast up to $2,400 and East Coast rates to more than $3,000 per FEU. The Hanjin collapse "is defi nitely giv- ing the carriers the confidence to stick with the GRI and understandably so; they are inundated with cargo requests," said Kurt McElroy, executive vice president of APEX, one of the largest non-vessel-oper- ating common carriers in the trans-Pacifi c eastbound market. The South Korean carrier's collapse sends spot rates soaring and may give carriers sustained pricing power for the fi rst time in years By Peter Tirschwell PLAYING FIELD PLAYING TILTS THE PLAYING TILTS TILTS TILTS HANJIN

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