Fuel, truck costs lift trans-Pac annual service contracts

By  | May 16, 2018 

With service contract negotiations between US importers from Asia and carriers concluding, port-to-port rates are generally down slightly from last year, but all-inclusive rates to inland destinations are higher, ranging from 5 percent to 25 percent, depending on router, due to higher trucking and fuel costs.

“I want space, so I’ll stick with flat rates across the board – flat to 5 percent down, and no PSSs [peak-season surcharges],” said Jeff Solomon, director of operations at SG Footwear. Ocean rates are stable this year, but with truck capacity strained in many parts of the country, “there are a lot of questions on the inland move,” said Kevin Krause, vice president of ocean services at Seko Transportation.

Except for the largest retailers, contract rates form the period of May 1, 2018 to April 30, 2019, have settled in at $1,100 to $1,200 per FEU from Asia to the US West Coast and about $2,100 per FEU to the US East Coast, according to four carriers, four beneficial cargo owners (BCOs), four non-vessel operations common carriers (NVOCCs), and three industry analysts. The 2017-2018 service contract rates to the West Coast were generally $1,200 to $1,300 per FEU, and the East Coast rates were $2,200 to $2,300. [Registration required for full story]

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