Toronto, January 8, 2021
North American importers are facing unprecedented increases to the cost of freight in an effort to secure space for their shipments from China. Currently, all January space is fully booked no matter what the routing (via East Coast or West Coast). Carriers are reducing space capacity for general Rate / FAK cargo to accommodate premium space in order to increase their revenue. The cost for premium space is between USD 2,000 – 3,000 over the FAK rate. Many importers are begrudgingly paying this premium, as it guarantees space and equipment and enables them to get their freight moving.
Many experts are advising that after Chinese New Year, equipment will still be the problem and that we could be encountering this shortage until mid-2021. The equipment problem throughout Asia is so bad that some carriers in North America are not accepting export bookings, and are instead using their vessels to backhaul empty containers to China. In the current market situation, space and equipment has become the primary focus, with rates being tertiary.
We suggest that clients provide more lead time when placing orders with vendors, and to budget for additional costs as freight rates will not alleviate until possibly May.
For more information, please call Debbie McGuire, Manager – Freight Solutions at (905) 882-4880, ext. 1308.