Battered by the year-long United States-China trade war and escalating tariffs, import volumes this summer have not been able to gain any traction as they normally do with back-to-school and holiday merchandise. Retailers are projecting a choppy three months ahead. US imports are projected to decline by 5.5 percent in October, increasing 8.8 percent in November, and drop 9.8 percent in December, year over year. It is anticipated carriers will reduce capacity further in the coming months, either by blanking sailings or suspending some weekly services. Carriers will remove dozens of vessels from service between now and Dec. 31 as they transition to the use of low-sulfur fuel to comply with the International Maritime Organization’s (IMO’s) 2020 mandate that takes effect on Jan. 1. Vessels will be dry-docked for a week to flush out the high-sulfur bunker fuel now in use so it doesn’t comingle with the low-sulfur fuel they will be required to burn after December.
We are expecting quite a lot of rate volatility in the Trans-Pacific market through the end of 2019.