Increased Traffic on Asia – U.S. Trade Lanes Causes Early PSS

Container lines transiting from China to the United States saw a steady up-tick in bookings beginning in January of this year and are projected to continue on this trend into the later half of 2014. Currently, vessels headed to U.S. West Coast ports from China are 90%+ utilized, while vessels heading to both Gulf and East Coast ports are 95%+ utilized. A decreased supply of vessel space has caused container lines on these trade lanes to announced peak season surcharges (PSS) earlier than usual.

According to the Supply Chain Management Review, “member lines of the Transpacific Stabilization Agreement (TSA) have adopted $400 FEU PSS for all shipments effective June 15, 2014 to cover the rerouting of inland traffic, leasing extra equipment, and spreading shipments out over alternative port gateways.” Before the PSS was announced, carriers implemented a general rate increase (GRI) of $300 per 40’ container for shipments transiting West Coast ports and $400 per 40’ container for shipments transiting all other ports in the United States.

Further, pending the outcome of the negotiations between the IWLU and PMA, shipments transiting the West Coast ports could be subject to delays and congestion surcharges if an agreement is not reached by the end of the current contract that is set to expire on June 30th at midnight. U.S. importers and exporters should make the necessary inquiries and adjustments for scheduled shipments with respect to timelines and budgets.

Source: Supply Chain Management Review