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New capacity wave heading for trans-Pacific
Trans-Pacific container lines are increasing the amount of capacity they will deploy in August and September as they receive new vessels. Therefore, spot rates are falling.
Trans-Pacific capacity will increase 19.2% year-over-year by the fourth week of August. Vessel space between Asia and North America will increase at double-digit growth rates through early September. Overall ship supply will rise 25.2% YoY by September 11th.
The double-digit growth in the container ship fleet is expected to last into 2024. The container ship fleet is expected to add another 2.5 million TEUs of capacity this year, and 3.9 million TEUs next year.
However, the new supply is coming as cargo demand returns to single-digit growth rates over the next few years.
OOCL is set to receive four 24,000-TEU vessels between July and October. Additionally, ONE will receive two similar mega-ships. Lastly, MSC is expected to receive 136,350 TEUs in new vessels this year.
Ocean carriers will need to manage supply through canceled sailings and other schedule changes to keep rates from collapsing further than they already have. Carriers could pull their old ships for maintenance and retrofits while putting the new ships to work.
UPS & Teamsters break contract talks
The International Brotherhood of Teamsters and UPS broke contract talks on Wednesday. Therefore, the likelihood of an August 1st strike is now much higher. Both sides accused one another of walking away from the negotiating table. The Teamsters rejected UPS’s latest offer on wages and benefits.
Teamsters General President Sean M. O’Brien said, “This multibillion-dollar corporation has plenty to give American workers – they just don’t want to. UPS had a choice to make, and they have clearly chosen to go down the wrong road.”
UPS stated, “The Teamsters have stopped negotiating despite UPS’s historic offer that builds on our industry-leading pay.” We have nearly a month left to negotiate. We have not walked away, and the union has a responsibility to remain at the table.”
Neither group said what the sticking points were in the latest rounds of negotiations. Several non-economic issues have been resolved, such as improved heat safety in package cars.
Shippers are preparing for a potential strike by 340,000 workers at UPS. Those that have not planned are scrambling to find potential capacity. However, they might be able to find an alternative due to the soft US economy and falling parcel and freight volumes.
There is still time for the teamsters and UPS to reach an agreement. However, time is running out. The two sides would need to get a vote on a tentative agreement before the contract expires July 31st.
About O’Neill Logistics
O’Neill Logistics is a leading third party logistics provider. We operate in California, Savannah, New Jersey. We service many verticals including Garments, Fashion Accessories, Footwear, Furniture, Home Goods, & Electronics. Additionally, we offer omni-channel distribution and all value-added services. Lastly, we focus on retail “drop shipment” fulfillment and item-level fulfillment services with same-day service offerings.
O’Neill Logistics has over 2 million square feet of state-of-the-art facilities. Additionally, we offer dray services to support the warehouses and provide distribution to retailers and wholesalers. Our reliable 3PL platform combines sophisticated technology with robust, flexible processing designs and speed-to-market gateway models.
Lastly, we aim to simplify your supply chain. We deliver exceptional service and can optimize your operational performance. Therefore, we aim to build, protect and foster strong business partnerships.
Please reach out to us if you have any questions or need assistance with your logistics solutions!
