The eastbound trans-Pacific trade is experiencing an unusually extended peak season, with steady demand for imports from Asia and fewer-than-expected blank sailings announced for November. Carriers are holding off on the typical reduction in services, seeking to maintain higher rates as import levels remain strong.
Typically, import demand from Asia decreases as Black Friday approaches, but this year it’s holding steady, driven by factors like strong retail sales, tariff concerns, and the looming expiration of the tentative labor agreement at U.S. East and Gulf Coast ports in mid-January. According to maritime intelligence firm eeSea, only about 5.4% of the total shipping capacity for the West Coast is set to be blanked in November, and 8.1% for the East Coast—down from 11.5% in November 2023.
The reduced blank sailings represent a sharp drop from October’s figures, which saw 16% of capacity blanked to the West Coast and 21% to the East Coast. A carrier executive reported strong bookings for November, indicating robust demand across the board.
Freight rates have climbed as a result. As of October 28, the spot rate from Asia to the U.S. West Coast was $4,200 per FEU—up 133% from last year—and the East Coast rate reached $4,300 per FEU, an 87% increase. Despite these higher rates, carriers are announcing general rate increases (GRIs) of $500 to $600 per FEU, effective November 1. Usually, these rates decline toward year-end as holiday shipments wrap up, but this year, peak season demand is keeping them elevated.
Import volume from Asia in September totaled 1.72 million TEUs, up nearly 17% year-over-year, nearing a two-year high. This demand has been consistent into October, with forwarders reporting full ships to the West Coast. The National Retail Federation projects a 3.1% year-over-year increase in October imports.
Several factors are driving this demand surge. Forwarders cite concerns over a potential second strike by the International Longshoremen’s Association when its extended contract expires in January, tariff-related uncertainties due to the U.S. presidential election, and early shipments ahead of Lunar New Year on January 29. Some retailers are preemptively warehousing goods to avoid potential delays, a trend noted by forwarder M&R Spedag Group’s executive, James Caradonna.
Capacity constraints are tightening space on vessels, prompting many importers to book weeks in advance, particularly from South China. Though peak season surcharges (PSSs) traditionally ease by year-end, forwarders report they will likely remain through December. While the PSS has softened to about $1,800 per FEU from May’s $2,000, carriers are still seeing pressure on rates.
In response, carriers are gradually opening more vessel space for named-account bookings, though forwarders indicate that access to these lower-priced options is limited. This supply-demand tension continues to characterize the extended peak season, with both carriers and importers navigating tight capacity and rising costs into the final months of the year.
Source: www.joc.com