To attempt to keep you aware of the current status here in lies our 3rd formal update on the current shipping situation due to the West Coast Carrier Lock Out:
1) Re Ocean Cargo
The good news at the West Coast ports are that many vessels have discharged and mlb have moved out by rail.The bad news is:
A) There are still delays for vessels waiting to berth and discharge. The extremes range from a few days to three weeks. Vessels that were due to arrive from the time the ports reopened on October 9th have been experiencing an average of one to two week delay and there is no end in sight. There is no predictablility to these delays by carrier or port. It has more to do with at any particular time what amount of containers are sitting in the terminals, is there any more room to receive incoming containers, and how big (i.e. how many containers does it hold) is the ship awaiting berth and discharge. No one is immune from the problem.
B) The railroads are efficiently and rather quickly moving out containers from the port areas to inland destinations. We are not seeing any major delays in moving containers out by rail from the main mlb ports of Seattle/Tacoma and LA/Long Beach. The exception is the port of Oakland. We are seeing rail delays there of 2-3 weeks due to the congestion. Please note discharge in Oakland has been a last minute, uncontrollable carrier decision. They have discharged containers there due to a lack of other options and the need to get the vessels heading back to Asia. Even the ocean carriers did not really want to discharge there but had no choice.
C) The situation in Asia has become worse. We are seeing the negative results of the vessels being so delayed in getting back. During the week of October 7-14 there was an overall decline of over 20% from the normal amount of overall available vessel container space. The week of October 15-22 saw this decline to almost 40% of what normally is available. That translates into an equivalent of over 10,000 x 40' containers less space in the most recent week compared to what is normally available. We have yet to see/hear exactly what that will translate into the coming three weeks but we expect it to be even worse. Please note the above figures are from Hong Kong only, however since Hong Kong is the largest port in Asia it is a clear barometer of the situation throughout all Far East origins.
Primarily due to "A" and "C" above, carriers are either not accepting mlb/ipi cargo at all right now or severly limiting the amount they will accept. In some cases, carriers will accept an MLB/IPI booking and release the container for loading however when the container is returned to the terminal they will not issue the bill of lading to the area they had already agreed to and hence giving options of where the cargo CAN ship. The carriers feel there is no reason to further congest port facilities with cargo that needs to go on the already congested rail. Just the West Coast destined cargo itself will more than fill the vessels. Thus West Coast destined cargo currently is the apple of the carriers eye as they hope they can discharge the freight and safely assume have the containers unloaded and then reloaded back to Asia so that the equipment and schedules can get back to normal.
This puts tremendous pressure on the all water space which become the ONLY alternative for importers in about half the country. There is nowhere near enough space on all water vessels to handle the demand. Star Asia is buying more all-water space than any other South East USA NVOCC. However even through our carrier commitments and ad hoc buying it has been a tremendous effort to fullfill our needs. As mentioned before this is a fierce "sellers market" and the rules are changing hourly. We know the rates are crazy but our job is to offer our customers whatever options are available and not decide for you that a rate is too high. It is for us to know where the options can be found and let you decide. However as we have seen in the past month many non Star Asia accounts and competing NVOCC's are contacting us looking for space at any rate level. Rest assured our loyal longstanding accounts are being protected.
2) Re Air Cargo
Space is virtually impossible unless we agree to pay the highest premium the market will demand. Fortunately we have been in this business a long time and have regular, secured space. But the airlines have always worked on a "raise the rates when the market demands and lower them when the market does not" basis and now is no different. The cost we must pay for our space is going up hourly. Otherwise, without this secured space, no matter what someone wanted to pay, and there are companies willing to pay anything, space is unavailable. Several weeks ago our air department, sales, and through my customer alert letters we advised of this situation and asked for earliest notification of any air cargo so we can price and block the space. This situation continues and rest assured Star Asia has more air cargo space into our region than any other Far East air forwarder.
3) Re Star Asia
Having the largest customer service personnel in the Southeast USA in Far East transportation has become invaluable during this crisis. Our customer service people in both air and ocean, as well as our sales, are available to answer any questions you may have. We are working diligently to track and push all movements of cargo with the carriers, railroads, port personnel, and overseas partners. We have daily internal spreadsheets showing cargo updates multiple times. Our internet tracking system-Star Track-is updated instantly when cargo moves for your individual shipments.
Thank you for your attention and please contact us should you have any questions.Kind regards,
Peter N. Starosta
President, Star-Asia International