|Lead time delays||2-3 weeks||2-3 weeks|
|Unit cost changes||10-15%||10-15%|
Preempting production delays for Lunar New Year
Factories in Asia will be closed for weeks in early February in observance of Lunar New Year (February 12). Orders placed after December 31, 2020 will likely encounter serious production delays.
Before and after the weeks-long holiday, factories will experience congestion as they prepare for the close, and then catch up on the backlog.
To avoid production delays, if you are ordering from factories in Asia and need to receive items before the end of March, we advise placing your orders as soon as possible.
Price increase for corrugated products in North America
This month, containerboard prices have increased by an average of $50/ton. The major North American producers of containerboard cite strong demand for corrugated products and the rising cost of transportation, energy and insurance as reasons for the increase.
Learn more about corrugate price changes using the Lumi Corrugated Tracker.
Containerboard is the largest material component of corrugated products. As a result corrugated manufacturers across North America have increased prices. Price increases vary by manufacturer, but range between 6 to 10%. For some manufacturers the increase is effective immediately, for others it will take up to 90 days.
Please reach out to your Customer Success Manager to understand how the price increase impacts your products.
U.S. International Trade Commission decides no on further duties for Chinese glass products
The U.S. International Trade Commission found on October 20, 2020 that no U.S. industry is materially injured by imports of glass containers from China. This is counter to what was determined in September by the U.S. Department of Commerce, however, both organizations must agree that imports are injuring the domestic industry in order for duties to go into effect.
As a result of the Commission’s negative determination, no further anti dumping duty will be applied or countervailing duty deposits required for imports of glass containers from China, and importers will receive refunds of the deposits that they have previously paid.
Potential anti-dumping duty for Chinese glass products
A new anti-dumping duty (ADD) is being considered for most glass items brought into the US from China. The items covered under the proposed ADD are glass bottles and jars that hold from 2 fluid ounces up to 1 gallon.
The tariff would vary across industries and some manufacturers will be granted reduced rates, however the vast majority of factories affected would be subject to a rate of up to 256%.
In September 2019 a petition was filed by The American Glass Packaging Coalition claiming that manufacturers in China are receiving subsidies from the Chinese government.
On September 14, 2020, the U.S. Department of Commerce (DOC) made its final determination in favor of the new ADD, however in order for tariffs to be imposed, both the DOC and the U.S. International Trade Commission (ITC) must agree that imports of glass containers from China are injuring the domestic industry.
The ITC is currently scheduled to make its final determination in the anti-dumping duties investigation by October 26, 2020. If decided in favor of the new ADD, an anti-dumping order will be issued by November 2, 2020.
The ITC has not provided any indication of how they will rule in this determination, however on June 9, 2020, in a countervailing investigation, the ITC decided against a new ADD.
Manufacturers based in Louisiana and Texas are still recovering from Hurricane Laura, though most production capacity has been restored.
Chinese manufacturers are at full capacity and working through peak season orders. Production will be shut down from October 1 to 8 for the Golden Week holiday.
Ocean freight rates from China to the US continue to climb following a general rate increase at the beginning of September. Eastbound transpacific freight rates are 140% higher than the same time last year.
Despite carriers restoring cancelled sailings, demand is currently outpacing capacity.
Hurricane Laura is impacting production at many facilities throughout Louisiana and parts of Texas. Freight routed through that region is also experiencing delays.
We are closely monitoring the situation. If you have active orders impacted by Hurricane Laura, we will contact you with specific updates.
The Lumi manufacturing network of remains fully operational. With peak season underway, take a look at our Peak Season Deadlines to see how lead times are impacted.
Ocean freight rates from China to the US are rising once again. A general rate increase was implemented on Aug 15th sending China to US rates to recent highs. While rates have increased to both US coasts, the West Coast has increased more dramatically with a 15% climb since the end of July. Eastbound trans-Pacific shipments booked for August 15 departures are paying about $3,600 per FEU to the West Coast and $4,100 per FEU to the East Coast.
Due to high ocean rates and delays, air freight rates are increasing and are likely to continue to through the month.
The Lumi network of manufacturers remains fully operational in the US and China. Increased demand is causing delays of 1-2 weeks in both countries.
Both ocean and air carriers continue to cope with increased demand and availability. Rates are steady for now, but are likely to increase in the near term.
The Lumi network remains fully operational, though some manufacturers are reporting capacity constraints. These constraints are mostly driven by demand related to the upcoming holidays.
Ocean carriers are adding capacity to transpacific shipping lanes for August. Current vessels are at full capacity and demand remains steady. Book in advance whenever possible.
After falling steadily since May, air freight rates are expected to rise through August with the launch of products from Sony, Apple, and Samsung.
Lumi’s network remains fully operational with no closures. Expect 1-2 week delays on some specialty items.
Steady volumes are keeping ocean rates high. Though capacity is tight, orders are currently shipping at regular volumes and cadence. Only 4.7% of sailings from Asia to North America have been “blanked” (cancelled) for Q3 compared to 14.7% in Q2.
With fewer converted passenger jets currently in use, air freight rates from China to the US are on the rise again.
Typically, back-to-school business puts a strain on shipping capacity in late summer. In the coming weeks, we may see volumes increase due to back-to-school volumes, and more generally as companies try to get out ahead of a potential COVID-19 resurgence.