Ocean Freight Update
Within the past few months ocean carriers have taken a number of steps in order to deal with rising financial losses within the industry. Many carriers have expressed their concern for the future of their companies and the carriers have worked together to increase rates and cut costs.
Since Jan. 1st a total of three increases in container rate costs have been made by the carriers and a further increase is planned on March 1st. Carriers have also indicated they will increase container rates substantially in April or early May.
Importers are strongly encouraged to plan ahead for further increases that may result in rates that are 20 – 30% higher than today’s rates before summer. Importers are also urged to work with their suppliers to book shipments early to avoid delays due to capacity reduction moves made by the carriers. Container ship capacity declined in 2009 and may decline further in 2010 as carriers pull vessels from service to support increased demand and higher rates.
Carriers are now “slow steaming” many vessels, reducing the average speed of vessels from 25 knots to 19 knots in a move meant to reduce fuel costs on each sailing. This slower sailing speed means longer transit times and is also causing capacity shortages in some markets.
Customs Services & Solutions is working closely with our partners to help keep our freight rates competitive and to provide the best possible service in these trying times. Our partners have contracts for significant container space and by doing so can negotiate the best possible rates.
Clearly there will be further challenges in 2010 and importers are encouraged to sign up for our free e-newsletter on our website at www.cssbrokers.com.
Please contact me if you have any further questions.
Best Regards.
Steve Fodor, President