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A Promising Turn in the China Trade Deal, a Surge in Short Hauls, and Drayage Carriers Wage Legal Battle

By May 7, 2020 No Comments

Customs 

Top negotiators from the U.S. and China are planning to meet as early as next week to discuss the implementation of Phase One of the trade deal between the two countries. This promising development suggests that – nearly 4 months after the deal was signed – concrete steps are being taken to normalize trade between the two countries. 

China also experienced an increase in export totals in April despite experts projecting a significant drop. While import volumes dropped by roughly 14%, the country achieved a significant rebound in their year-to-year comparison of exports from nearly –20% in March to +3.5% in April. 

 

Air 

The air freight market doesn’t appear to be leveling out anytime soon. While rates are overall still at major highs, rate guarantees barely last more than a day, as opposed to usual weeks. For many, now is the time to determine whether price or speed is priority, making decisions to get creative to get cargo moving affordably. If you or your team need help with your air cargo planning, don’t hesitate to reach out to our team for help, or request a quote with Navegate.

 

Ocean 

As fuel prices stay low, more and more shippers question bunker adjustment factor (BAF) fees and low-sulfur fuel surcharges (LSS). Some major carriers, like CMA CGM and Maersk have lifted their surcharges, acknowledging that they’re likely to return at some point. Other carries like Hapag-Lloyd, however, have kept them in place. Many are calling for surcharges and adjustment fees to reflect actual prices, rather than feeling like a free-for-all that muddies pricing clarity. 

Trucking 

Uncertainty has caused a surge in short-haul trucking, as the percentage of hauls under 100 miles has more than doubled during the pandemic. Citing both the need to find loads amid a dramatically slowed economy and concerns about traveling far from home amid a pandemic, truckers are looking to the local freight market more often. While this is likely a temporary situation that shippers must adapt to, the likelihood of a quick recovery in the freight market is low as the national and global shutdowns persist.  

 

Ports 

A legal battle is brewing between ocean carriers and drayage truckers over chassis prices. A May 4th letter from the Intermodal Motor Carriers Conference (IMCC) to the Ocean Carrier Equipment Management Association (OCEMA)  a group representing 80% of the U.S. container market – warned that a formal complaint would be filed unless OCEMA changed their container leasing practices. As truckers across the country fight against low rates during the pandemic, this move is an attempt by intermodal providers to lower costs.