Executive Briefings

Trying to Set Rates in Trans-Pacific Lanes These Days Is No Easy Task

Uncertainty reigns supreme on the trans-Pacific these days as shippers and carriers finalize annual service contracts on the key trade linking Asia and North America.

And that uncertainty extends to the most basic aspect of the carrier-shipper relationship - rates. While trans-Pacific carriers are seeking rate increases, including an unsuccessful attempt at peak season surcharges in January, spot rates on the trade have plummeted to about half their 2010 peak. Meanwhile, bunker surcharges are rising. Meaning it's a difficult environment in which to project more than a few days out, much less weeks or months.

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Uncertainty reigns supreme on the trans-Pacific these days as shippers and carriers finalize annual service contracts on the key trade linking Asia and North America.

And that uncertainty extends to the most basic aspect of the carrier-shipper relationship - rates. While trans-Pacific carriers are seeking rate increases, including an unsuccessful attempt at peak season surcharges in January, spot rates on the trade have plummeted to about half their 2010 peak. Meanwhile, bunker surcharges are rising. Meaning it's a difficult environment in which to project more than a few days out, much less weeks or months.

Read Full Article