Ocean Freight Rates Are Rapidly Increasing

September 1, 2016
By Rich Roche

Cargo ship

Ocean freight rates are increasing rapidly due to market dynamics this week with Hanjin filing for court receivership signaling their bankruptcy. The ripple effect began almost immediately with many ports shutting out Hanjin vessels and turning away any Hanjin loads. Partner carriers reacted quickly too by stopping any of their containers from loading aboard Hanjin vessels. In essence, there was a near freezing of Hanjin assets globally that has the same effect as capacity withdrawal from the trade. This occurred at the height of the traditional peak season when space is already at a premium, and supported the September 1 General Rate Increase (GRI) to pass through without mitigation. Carriers have also taken the opportunity to revisit Peak Season Surcharge (PSS) and announce a much higher GRI for October 1 as listed below.

We anticipate that other vessels will be brought out of anchorage to replace Hanjin capacity, but the process will take 6-10 weeks to complete.

Here are the future rate adjustments filed and announced by carriers. All amount are in USD.

Peak Season Surcharge

  • Applies to all cargo moving from the Transpacific to the U.S. and Canada
  • Effective September 15, 2016
Equip. USD
20 ft $360
40 ft $400
40 ft HC $450
45 ft $510


Bunker Adjustment Factor (BAF)

  • Applies to all cargo moving from the Transpacific via the following:
  • Effective October 1, 2016

Via West Coast

Equip. Current Levels October 1 Levels
20 ft $231 $268
40 ft $257 $297
40 ft HC $289 $334
45 ft $325 $376

 

IPI Via West Coast

Equip. Current Levels October 1 Levels
20 ft $350 $410
40 ft $389 $455
40 ft HC $438 $512
45 ft $492 $576

 

Via East Coast A-W

Equip. Current Levels October 1 Levels
20 ft $408 $473
40 ft $456 $525
40 ft HC $510 $591
45 ft $573 $665


General Rate Increase

  • Applies to all cargo moving from Transpacific to the U.S. and Canada
  • Effective October 1, 2016
Equip. USD
20 ft $1350
40 ft $1500
40 ft HC $1688
45 ft $1899
LCL $27 W/M

Rich Roche is Vice President, International Transportation for Mohawk Global Logistics. Click here to read more about Rich.


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