"Shipping Tsunami": Prepare to pay $15,000 for each container, the price is no longer important
April 29, 2021
The number of container ships anchored near Los Angeles and Long Beach has dropped from 30 a day a few months ago to about 20 a day.
Does this mean that the capacity tensions in the trans-Pacific market have been eased?
Nerijus Poskus, vice president of Flexport, warns that this is not the case.
"On the contrary, a worse month is approaching, and everyone must be prepared to meet this shipping tsunami."
"In May, all the trans-Pacific goods were basically sold out. We have a customer who needs to load the goods in May, and it is very urgent.
He is going to pay $15,000 for each container, the price is not important anymore. "
According to Nerijus Poskus, trans-Pacific imports are still on the rise. In January, trans-Pacific imports increased by 10% compared to 2019 (compared to 2020 figures due to COVID), and increased in February. 13.5%, then surged 51% in March.
"Our current level is 1.5 times what it was before the epidemic."
Regarding the current situation in the freight industry, Poskus said it was the "worst case" he had ever seen-and he believed it was about to become more serious.
"Be mentally prepared! May will be the worst month people have ever seen."
Because some shippers will have to wait in line behind the growing backlog of goods in Asia, he expects that “it will happen soon that some importers will not even be able to board the ship. For them, it will almost feel that trade is stagnating.”
Poskus offered several suggestions to U.S. importers:
1. Learn about our Chinese transportation methods, and use them coldly.
"Carriers need refrigerated trucks in the US market to export refrigerated goods to Asia. On the way back from Asia, these refrigerated trucks are powered off and can be used as non-operating refrigerated trucks (NOR) to transport dry goods."
"Believe it or not, the carrier is still airlifting some refrigerated trucks (NOR) because importers don't like them. This is a missed opportunity to transport goods with NOR. My suggestion is: take this option."
2. Carrying goods through less than carload (LCL)
"Instead of waiting, it's better to break some of your goods into LCL for transportation, at least you can get some inventory."
3. Choose routes creatively
For example, direct flights between China and the West Coast may be sold out, but the cargo can go from China via the Panama Canal to Cartagena, Colombia, and then back to the West Coast via the canal.
Although it takes a long time to ship, it can be shipped within the same week, which is an option compared to waiting for one and a half months to ship.
4. Choose the route creatively
"As long as you transport your goods to the North American continent, from there you can deliver it to where it needs to go, whether it is in reefer containers or LCL, or transit through hubs such as Cartagena.
Still transported it to Canada, then transported it to Chicago by rail, and transported it to New York by truck. It will be expensive, but at least it will get there. "