Peak season is upon us: Do you know where your trans-Pacific holiday cargo is? Those looking for inexpensive routes from Asia to North America are rapidly seeing their supply-chain options dwindle as seaports along the U.S. West Coast face weeks-long backlogs this month.
What’s bad for oceanfreight has been a boon to charter companies. According to The Loadstar, lease rates for 747Fs that usually rise from about US$300,000 to US$400,000 in November, due to typical seasonal demand, are now reaching $500,000 to $600,000 as shippers scramble for alternatives to the oceanfreight backlog. Forwarders have booked more than 15 charters from Asia in the last week, the article said.
One of those companies is supply-chain management firm UTi Worldwide, which chartered a weekly 747 freighter to ship goods from Shanghai to Chicago during the holiday season. The first flight, with a capacity of about 100 tonnes, is set to leave Shanghai on Monday, Nov.24, and arrive at Chicago O’Hare, where UTi will arrange to have freight loads forwarded to other North American destinations. A second Shanghai-Chicago flight is scheduled for Dec. 1.
“Congestion at West Coast U.S. ports has reached a critical level, and we think it will get worse before we see any improvements,” said Ed Feitzinger, UTi’s executive vice president, global operations. “Airfreight demand has spiked in recent weeks to levels not seen in years.”
One of the worst bottlenecks has been the port facility at Long Beach, Calif. (pictured), where 40 percent of the nation’s imported oceanfreight is processed. A combination of labor disputes, larger ships, equipment shortages and railroad delays have combined to create a backlog of empty containers that can take weeks to clear before unloaded cargo can move out of the port facilities, UTi says.
In addition to these delays, there has also been an increase in the amount of trans-Pacific cargo being shipped this year. Integrators such as DHL, UPS and FedEx have added to the tight air charter market by securing extra capacity prior to the peak season in anticipation of these backlogs.