\u201cWhat I\u2019m seeing is unprecedented. We are seeing a tsunami of freight,<\/strong>\u201d he reported.<\/p>\n \u201cFor the month of May, everything on the trans-Pacific is basically sold out.\u00a0We had one client who needed something loaded in May that was extremely urgent and who was ready to pay $15,000 per container. I couldn\u2019t get it loaded\u00a0<\/strong>\u2014 and we are a growing company that ships a lot of TEUs [twenty-foot equivalent units]. Price doesn\u2019t always even matter anymore.”<\/p>\n Poskus said that trans-Pacific import volumes are still rising. He noted that January trans-Pacific imports were up 10% versus 2019 (comparisons to 2020 numbers are skewed by COVID) and 13.5% in February, then jumped 51% in March. \u201cSo, we\u2019re now at 1.5 times pre-pandemic levels.\u201d<\/p>\n With imports far outpacing retail sales growth, he attributed volumes to inventory restocking. \u201cThe restocking is actually affecting the trade even more than growth in demand.\u00a0That tells me that this will last even longer. Let\u2019s say U.S. consumer demand slows down in Q3 and Q4. That\u2019s not expected, but even if it does, [capacity availability and rates] shouldn\u2019t improve quickly, simply because of the huge restocking demand.\u201d<\/strong><\/p>\n Poskus also believes there is a growing export backlog piling up each day in Asia, awaiting available ship slots. If that backlog grows too big, he said,\u00a0“I honestly don\u2019t know what\u2019s going to happen.”\u00a0<\/strong>As a result of the backlog and restocking demand, he thinks\u00a0“prices will remain high and shipping will probably remain difficult for the rest of this year. And then after that, you have the peak for Chinese New Year in 2022.”<\/strong><\/p>\n He said that the situation today is the worst he\u2019s witnessed \u2014 and he believes it\u2019s about to get even more severe.<\/p>\n \u201cBuckle up. The month of May will be the worst people have ever seen,\u201d he predicted. Because some shippers will have to wait in line behind the growing backlog in Asia, he expects \u201cwhat\u2019s going to happen soon is that some importers won\u2019t even be able to get on the boat. For them, it will almost feel like trade is coming to a halt.\u201d<\/p>\n Poskus\u2019 comments mirror cargo bookings data. FreightWaves\u2019 SONAR platform features a proprietary index of shippers\u2019 ocean bookings (SONAR: IOTI.USA). Bookings to the U.S. are measured in TEUs on a 10-day-moving-average basis as of the scheduled date of overseas departure. As of Monday, the index was at a new all-time high and forward bookings data showed a continued rise ahead.<\/p>\n As of Friday, the Freightos Baltic Daily Index assessed the Asia-West Coast spot rate (SONAR: FBXD.CNAW) at $4,797 per forty-foot equivalent unit (FEU) and the Asia-East Coast rate (SONAR: FBXD.CNAE) at $6,306 per FEU \u2014 both near all-time highs.<\/p>\n But that\u2019s only part of the rate story. \u201cIndexes are not bills. Premiums are not reflected in the indexes,\u201d said Poskus. Earlier this year, some of the premium charges came down as container availability in Asia improved. That\u2019s reversed, said Poskus, who noted that the Ever Given incident in the Suez Canal pulled container equipment from the market. \u201cContainer shortages in Asia are again very bad because of the Ever Given, and it will take another four to six weeks to come back to normal.\u201d<\/p>\n The added premiums to get spot cargo loaded \u201care back and they\u2019re higher than before,\u201d he said. \u201cThey are $2,000-$3,000 above FAK [spot price] and that\u2019s the best case.\u201d<\/p>\n Spot cargo that was booked 21 days prior and was forecast within the shipper\u2019s allocation is still getting FAK pricing on spot, he noted. However, \u201ceverything last minute is basically a free-for-all auction. You are basically offering as much money as you can and hoping somebody will take it. Many importers are now struggling. We\u2019re seeing so many new customers approaching us asking for help because they can\u2019t get loaded.\u201d<\/p>\n![\"\"](\"https:\/\/www.zerohedge.com\/s3\/files\/inline-images\/port%20of%20oakland.jpg?itok=nOtxT39e\")
<\/picture><\/a><\/p>\nRestocking driving volumes higher<\/strong><\/u><\/h3>\n
About to get even worse<\/strong><\/u><\/h3>\n
Spot premiums back with vengeance<\/strong><\/u><\/h3>\n
Contract rates up sharply<\/strong><\/u><\/h3>\n