During the ongoing global pandemic, major ocean freight forwarders in the US market believe that there is no shortage of freight forwarders' demand for LCL services.

These services promise about 12-day port-to-port transit between China's major seaports and Los Angeles and Long Beach in Southern California, while most standard sea transits for eastbound trans-Pacific container shipments last for one month.

Although the cost per cubic meter of express LCL service is three to four times that of traditional LCL, they provide air freight shippers currently restricted due to the coronavirus pandemic with a higher than normal air freight rate that is twice as high. -If extra days are allowed during transportation, it is three-quarters cheaper.

"In recent months, we have seen a significant increase in the number of these services," Niels Nielsen, US executive vice president of Shipco Transport, based in Hoboken, New Jersey, told American shippers. "Yes, there are benefits to using such a carrier, but with shorter transit times and faster availability at U.S. terminals—especially compared to air freight alternatives—this premium is justified."

Starting in early March, trans-Pacific ocean carriers calling at ports on the west coast of the United States began to cancel voyages to offset the sharp decline in the number of imported containers caused by the sudden sharp drop in consumer spending and manufacturing due to the COVID-19 pandemic.

Some trans-Pacific liner carriers, especially those that are independent of the American flag and foreign flags of the major alliances, insisted on sailing schedules between China and the West Coast even at the height of the pandemic. These include American flag carriers Matson Navigation and APL, and foreign flag carriers ZIM and Evergreen.

In March, ECU Worldwide, a large shipping consolidator, cooperated with Matson to start the LCL express service XLERATE from Shanghai and Ningbo, and to more than ten container freight stations (CFS) across the United States through the Port of Los Angeles.

Last month, the consolidator further expanded this expedited LCL service by using ZEX's "ZEX" shipping service, which operates between China's Shenzhen and Guangzhou ports and Los Angeles.

ECU stated that both Matson and ZIM provide container chassis at its Port of Los Angeles terminal to ensure that containers leave the port quickly and avoid delays related to chassis shortages.

The consolidator was able to consistently retrieve imported LCL containers from the carrier’s dock within 8 hours after the ship’s arrival.

Spencer Strader, ECU Import Supervisor in Miami, said that the performance in the U.S. unloading terminal must be consistent and reliable in order for consolidators to provide freight forwarders with expedited LCL services.

"If the ship's port-to-port transit time is as fast as Matson or ZIM ZEX, but it takes four days to arrange an appointment to pick up the goods after the ship arrives, then any revenue from express port to port transit is really meaningless," Tradd said.

"This kind of fast outbound service needs to be reliable," he added. "If you provide a service to pick up containers from the terminal within 24 hours, the consistency must be very close to 100%."

When there are too many full containers

Whenever the global economy is disrupted and imports decrease, freight forwarders are often more interested in LCL service.

Robert Zorzi, Shipco’s US President and CEO, said: “As the trend continues, inventory needs to be kept to a minimum. As a result, shipments become smaller, inventory decreases, and new shipments are more urgent than in the past.” Operations Officer, Americas. "This is where LCL has a significant advantage."

Zorzi added that due to the overall reduction in shippers’ demand, freight forwarders are increasingly abandoning their own container containers on certain trade routes and instead load them with “neutral” consolidators such as Shipco.

Michael Troy II, vice president of sales for Troy Container Line of Red Bank, New Jersey, told American Shipper that once freight forwarders and their shippers understand the cost difference of a 20-foot or 40-foot container, they will be increasingly Attracted by LCL. Container rate.

"In today's transparent market, we offer a single all-inclusive rate from origin to destination," he said. "This allows shippers to see a clear break-even point between loading with FCL [full container loading] or LCL.

"Because the rates have fluctuated greatly in the past six weeks, it is important for shippers to have a clear cost in order to make decisions based on transactions every week, instead of committing to a stable interest rate in LCL or FCL as usual. In the market," Troy said.

Shipco Group CEO Klaus Jepsen (Klaus Jepsen) said that the traditional LCL service will always be for the purpose of shipping.

"The benefits of LCL are the same-service and cost predictability are key," Jepsen said. "Shipco continues to build its direct service portfolio, offering more and more niche services, eliminating additional freight handling and shortening transit time, thereby providing a vital speed to market."

However, a big problem faced by many consolidators and their freight forwarding customers is the long-term viability of expedited LCL services, especially after the coronavirus pandemic subsides.

Carmen Gerace, chief transportation officer of BDP Transport of BDP International, a Philadelphia-based freight forwarder, said that if air freight capacity remains tight and rates are high, shippers will continue to be interested in expedited LCL services.

BDP Transport cooperates with ocean carriers and neutral freight consolidators, and mainly sells expedited LCL services to its air customers. "When air freight returns to normal, I don't think these services will continue because the cost is higher than conventional LCL services," he said.

Troy said: "I think the stability and pricing of the timetable on the water, as well as the speed of these sports in the country upon arrival, will continue to determine the long-term success of these services."

ECU's Strader believes that for the rest of this year and early next year, urgent LCL services will remain strong, especially in the prospect of COVID-19 vaccine and related supporting equipment, which requires almost all available commercial air freight around the world.

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Click on the FreightWaves/American Shipper article by Chris Gillis.

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