When we started to plan for last year's TPEB peak season, all the signs of the makings of a tumultuous peak were written clearly on the wall. Now as we look at 2019, not much has changed.
- First, in 2018 threats of increased trade tariffs were looming. Yep, that’s still definitely the case in 2019.
- Second, we saw no announced efforts to combat the worsening schedule reliability trends including late departures and blanked sailings. With 35 blanked sailings having already been announced in 2019 and more vessels being laid up in Q3-Q4 for scrubber installation, we can confidently brace ourselves for the worst of the worst.
- Third, last year shippers thought they knew what shipping in peak season would cost but all bets were off once peak arrived. Many shippers ended up paying over $1000 in Peak Season Surcharges (only for the front-loaded cargo to sit in a warehouse for months). For 2019, many shippers have agreed to capped Peak Season Surcharges. However, as accurately pointed out in a recent JOC article, “carriers will fill limited slots with containers that pay a PSS before containers that don’t.” Ocean Carriers have also been vocal that they will, out of necessity, pass on 100% of the fuel/IMO 2020 costs, therefore the vast majority of contracts now include floating bunker. The fact is, the jury is still out in 2019 as to what impact all of this will have on ocean freight over the coming six months.
At least we're in international logistics because we love a challenge! And, even in the midst of last year’s turmoil there were still winners in the race. Making your direct service contracts as ironclad and robust as possible; that’s table stakes. There were two key things that last year's peak winners did: