Rollovers are becoming a growing Issue for liner customers.

Due to the daily increasing requirements for international shipping with increasing demand of carriers on trans-Pacific Ocean services in recent weeks, rollovers are becoming a growing problem for liner customers

According to Jan Hinz (Senior Director of US Ocean freight at Flex port) statement, earlier this summer rollovers had been apparent, primarily because lines had blanked so much capacity.

He added “However, current rollovers are due to increasing demand, not blank sailings, almost all trans-Pacific eastbound strings are running at 100% availability but are also over 100% full.”

Also, according to the words of Brian Wu (chairman of the Hong Kong Association of Freight Forwarding (Haffa) and director of BEL International Logistics Limited) shippers not considered a priority by carriers were suffering significant delays.

“Rollover always happen during peak season, especially for beneficial cargo owners paying lower levels, consignments are being offloaded by shipping lines due to overbookings with priority given to higher yielding containers.” he said.

Regard to his consideration, he expected substantial rates increases through August and into September.

As obtained observations, trans-Pacific freight rates have spiraled through the summer reaching record levels during August.

“With ongoing peak season demand, ocean rates from China to the US have now been on the rise for nearly three consecutive months,” reported Freightos yesterday.

The freight marketplace recorded China-US West Coast rates up 7% this week to a new high of $3,281 per FEU, 148% higher than the same time last year.

Home goods, appliances and increased PPE orders have China to U.S. East Coast prices increasing to $3,703 per FEU, ‘only’ 40% higher than the same time last year.

The reason for this increase in demand and rates on services from Asia to North America directly depends on fear of a second round of lockdowns. (Covid-19)

“I don’t want to speculate on consumer behavior, from our perspective, the strong demand is being caused by three factors: traditional peak season surges to replenish volume ahead of the holidays, the annual rush to import ahead of China’s Golden Week (1-7 October) and sustained PPE (Personal Protective Equipment) demand.” said Hinz.

“We’ve also seen especially strong growth in retail and e-commerce sectors such as outdoor equipment and home office supplies.” Hinz added.

Both the China and US authorities are now quizzing lines about the role of cancelled sailings and capacity restrictions this summer.

Eytan Buchman (CMO of Freightos) said “with Asia to US capacity nearly completely restored, this month’s price hikes by carriers were “definitively” demand-driven.”

 “Even with the increases, space is tight, with delays, rolled shipments and premiums for guaranteed spots,”

“If anything, this summer’s rebound in trade has demonstrated that with so many different variables at play in these unprecedented times – the extent of US stimulus, the end of tariff exemptions, consumer behavior leading into the holidays, and possible new restrictions during COVID’s second wave – we may have to get used to expecting the unexpected.” he added.

We expect the freight rates from Far east to Europe, Middle East, Africa, and Australia will increase and the liners will face shortage of space till mid of February and customers must have Competition to book their bookings. This condition will have benefits for Consignees and shippers which book their shipment with higher freight rates to prioritize over the rest.

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