Digital Edition

July 9 2018

Issue link:

Contents of this Issue


Page 36 of 55

July 9 2018 | The Journal of Commerce 37 Trans-Pacific Carriers and Ports Cover Story Special Report Baltimore Baton Rouge Beaumont Boston Brunswick Camden Charleston Concord, CA Coos Bay Corpus Christi Crockett Davisville Eureka, CA Freeport Galveston Gulfport Houston Jacksonville Long Beach Longview Los Angeles Miami New Orleans New York Newark Olympia Philadelphia Port Arthur Port Canaveral Port Everglades Port Hueneme Portland, ME Providence San Diego Savannah Tacoma Tampa Vancouver, WA Virginia Wilmington, DE Wilmington, NC COVERING ALL COASTS Providing stevedoring & terminal operations in more than 42 U.S. ports and 80 locations slipped 0.1 percent in the first five months of this year to 556,258 TEU, while MSC's 4.5 percent increase to 500,101 TEU beat the overall market growth of 2.9 percent to 6.3 million TEU, according to PIERS. Maersk was the No. 4 carrier for Asia imports, while MSC was No. 5. At least six carriers have responded to rapidly escalating bunker fuel costs by levying emergency bunker fuel surcharges of about $55 to $60 per TEU. However, such charges are not paid by all custom- ers because larger shippers usually have "no-surcharge" clauses in their contracts. The response of MSC and Maersk to this chaotic environment has been to rational- ize port calls on four services to the Pacific coast of North America in order to improve schedule integrity, a move other carriers and alliances in the trans-Pacific may also con- sider as container volumes increase leading up to the peak season. Lars Jensen, CEO and partner at Sea- Intelligence Consulting, said schedule integrity, in fact, is an issue that carriers are grappling with, although he hasn't seen other carriers taking actions similar to 2M. Until recently, carriers would have addressed these problems simply by increasing vessel speed as needed to get a particular service back on schedule. However, the price of bunker fuel has increased 18.4 percent since April and continues to fluctuate almost daily so increasing vessel speeds can cost carriers thousands of dollars on each voyage. Furthermore, freight rates during the early summer slack season won't support unexpected increases in operating costs. The spot rate for shipping an FEU from Shanghai to the West Coast on June 22 was $1,194, down 5.7 percent from the prior week, and $2,181 per FEU to the East Coast, down 2.5 percent, according to the Shanghai Containerized Freight Index, which is published under the JOC Shipping & Logistics Pricing Hub. In an advisory to customers, MSC stated that "as a result of the challenging operating environment for business on the trans-Pacific trade," the 2M partners, effective July 4, are suspending the Eagle service from Taiwan, China, and South Korea to Vancouver, British Columbia, and Seattle. That service will be covered by the Maple service from five North Asian ports to the Pacific Northwest. In a related change, the Maple service will replace the Prince Rupert and Vancou- ver rotation with calls at Vancouver and Seattle. Also, a new call at Prince Rupert will be added to the Orient service from North Asia to "Prince Rupert and the hinter- land." Finally, the current Ningbo, China, call on the Orient service to Long Beach and Oakland will be replaced with a Ningbo call on the Jaguar service, offering direct service to Long Beach and Oakland. JOC email: twitter: @billmongelluzzo Freight rates during the early summer slack season won't support unexpected increases in operating costs.

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - July 9 2018