GIANT US importers of Asian cargo are signing transpacific service contracts at much higher levels than ever before, according to IHS Media sources.
Rates for the largest retailers are US$2,500 to $2,600 per FEU to the west coast and $3,500 to $3,600 per FEU to the east coast. In the 2020-21 annual service contracts that run through May 1, 2021, the largest retailers signed contacts with rate levels as low as $1,100 to $1,300 to the west coast and $700 to $1,000 per FEU higher than that to the east coast.
The top five US retailers import at least 250,000 TEU from Asia, and they normally spread their import volumes out over several carriers.
'If they think these volumes will last through the end of the year, they will push the rate up,' one source said. 'Some carriers are charging lower because they don't see the peak being as strong. It's all how the individual carrier views the future.'
Carriers have so much leverage this year that in addition to the service contract rate, some are quoting a second-tier rate, reportedly much higher than the contract rate, for commitments of cargo beyond the shipper's minimum quantity commitment. Importers are accepting the second rate in order to secure additional space for the coming year.
Importers of all sizes, as well as non-vessel-operating common carriers (NVOs) who are expected to finalise their service contracts in April, say they are anxious to lock in space commitments from carriers because they are concerned that imports this summer and fall will again be unusually strong, with very little new capacity expected to be added to the trade.
SeaNews Turkey
Rates for the largest retailers are US$2,500 to $2,600 per FEU to the west coast and $3,500 to $3,600 per FEU to the east coast. In the 2020-21 annual service contracts that run through May 1, 2021, the largest retailers signed contacts with rate levels as low as $1,100 to $1,300 to the west coast and $700 to $1,000 per FEU higher than that to the east coast.
The top five US retailers import at least 250,000 TEU from Asia, and they normally spread their import volumes out over several carriers.
'If they think these volumes will last through the end of the year, they will push the rate up,' one source said. 'Some carriers are charging lower because they don't see the peak being as strong. It's all how the individual carrier views the future.'
Carriers have so much leverage this year that in addition to the service contract rate, some are quoting a second-tier rate, reportedly much higher than the contract rate, for commitments of cargo beyond the shipper's minimum quantity commitment. Importers are accepting the second rate in order to secure additional space for the coming year.
Importers of all sizes, as well as non-vessel-operating common carriers (NVOs) who are expected to finalise their service contracts in April, say they are anxious to lock in space commitments from carriers because they are concerned that imports this summer and fall will again be unusually strong, with very little new capacity expected to be added to the trade.
SeaNews Turkey