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An Uncertain Peak Season, Backups Along the West Coast, and Air Freight Rates Continue to Increase

By September 3, 2020 No Comments


Change seems incessant in 2020, and ocean freight’s peak season is among those changes. There has been a significant shift away from in-store shopping in favor of e-commerceand this altered consumer behavior has resulted in more imported goods from e-commerce retailers while traditional big box stores are scrambling to replenish supply for the holiday season. This has driven ocean rates to extreme highs, and it has reduced the idle fleet size as carriers re-activate ships to handle increased capacity. 

While the capacity is tightening on the waters, Maersk has undertaken a significant restructuring by absorbing Damco and Safmarine into their own brand. This will affect roughly 27,000 jobs, and Maersk hopes it will increase their ability to provide excellent customer service. 


Ports along the Gulf Coast are returning to normal operations this week after twin storms rocked southern states. Category 4 Hurricane Laura quickly downgraded to a tropical depression after making landfall in Louisiana and Texas, rendering most ports in the area able to return to normal business hours over the weekend. The storm did cause some significant damage, however, as cleanup efforts cause delays for rail shippers. 

Fees and delays are stacking up at West Coast ports. Shippers at the Port of Vancouver are facing waits of up to two weeks as backups spread throughout Canada from strikes at the Port of Montreal.  

As volumes surge at ports in the U.S., Union Pacific has increased surcharges for small shippers out of Los Angeles yet again. Small shippers will face a $5,000 charge for excess cargo as a means to mitigate skyrocketing demand. 


With roughly half of the world’s airplane fleet still grounded, fast-approaching product launches and the eventual release of a COVID-19 vaccine have elevated airfreight prices and reduced certainty for price trends as we approach Q4. China to North America lanes are roughly 20% more expensive than this time last year, and in a move to apparently adjust to this, UPS has raised surcharges on parcels from the region 30% starting on August 30.  


Last week, the U.S Trade Representative (USTR) extended Section 301 List 4 exclusions that were set to expire on Tuesday through the end of the year. Over the next few weeks, keep an eye on more lists that are set to expire September 20th and 23rd. 


Time-sensitive e-commerce and PPE shipments are flooding Los Angeles and Long Beach, and the volume has caused a 13% increase in lead times from July to August. Chassis and labor shortages at the ports have also compounded these constraints, and experts expect the current conditions to persist through the year.