CMA CGM will add peak season surcharges on 1 October: $4,000 per 40ft box from the Far East and Indian subcontinent to the US west coast, and $10,000 per 40ft from the Indian subcontinent to the US east coast. Drewry's World Container Index held at $4,476 per 40ft for a second week, with Shanghai-Los Angeles up 2% to $7,352 while Shanghai-Rotterdam fell 2% to $3,997. Book before 1 October to avoid the charge, but space is tight: eight blank sailings land next week and Shanghai berth waits run four to five days.
Supply Chain Action Points
What this means for your business — and what to do about it:
CMA CGM will apply peak season surcharges from 1 October: USD 4,000 per 40ft box from the Far East and the Indian subcontinent to the US west coast, and USD 10,000 per 40ft from the Indian subcontinent to the US east coast. The wider market is not falling. Drewry's World Container Index held at USD 4,476 per 40ft for a second week, with Shanghai-Los Angeles up 2 percent to USD 7,352 while Shanghai-Rotterdam slipped 2 percent to USD 3,997. Booking before 1 October avoids the charge, but space is tight: eight blank sailings land next week and Shanghai berth waits run four to five days.
Hold on to two things: the timing and the arithmetic. A booking is not a sailing, so an early booking only avoids the USD 4,000 if the box gates in before the cut-off, and the charge basis matters, whether the carrier counts gate-in, sailing date or bill of lading date.
Each of the five groups below faces a different decision: pricing validity and trade terms, inventory and SKU choices, production buffers, promises made to customers, and contract clauses. Figures come from the article; anything assumed is labelled as an assumption.
For Exporters
CMA CGM's peak season surcharge lands on 1 October at USD 4,000 per 40ft box from the Far East and the Indian subcontinent to the US west coast, with USD 10,000 per 40ft from the Indian subcontinent to the US east coast. Set that against Drewry's index at USD 4,476 per 40ft and Shanghai-Los Angeles at USD 7,352, up 2 percent, and the west coast charge is about 89 percent of the index level and about 54 percent of the Shanghai-Los Angeles rate you are actually paying. For an exporter shipping to the US west coast this is not a market signal to watch; it is a number that has to be inside your next quotation, on its own line.
Assume a monthly programme of 40 FEU to the US west coast with 60 percent of October volume sailing on or after 1 October, both assumptions for illustration. That is 24 boxes carrying USD 96,000 of surcharge in the month. Pull sailings forward where you can: lifting the pre-1 October share from 40 to 70 percent leaves 12 boxes paying the charge and cuts the added cost to USD 48,000, a saving of USD 48,000. The constraint is physical. Eight blank sailings land next week and Shanghai berth waits run four to five days, so a booking placed on 28 September may never gate in before 1 October. Confirm with the carrier whether the charge applies on gate-in, on sailing date or on bill of lading date, because that one definition decides whether you pay.
Work the calendar backwards. By 18 September, reissue quotations to US west coast buyers with the surcharge shown separately and validity to 30 September, and stop quoting flat all-in rates for October sailings. From 22 to 30 September, consolidate everything that can physically gate in before 1 October and book early enough to absorb the four to five day berth wait, treating 25 September as the working cut-off for cargo that must sail before the surcharge. Renew certificates of origin, commercial invoices and packing lists so documents match the earlier sailing date; the export documentation clerk owns that check and finishes it by 29 September. The commercial manager owns the requote, the logistics supervisor owns the cut-off and the consolidation.
Alternatives: route to the US east coast or Gulf and move inland by rail, quote CIF or DDP so the surcharge sits where the contract puts it, or push a shipment a week into October if the buyer accepts a later delivery. Each has a cost, so compare them against the USD 4,000 rather than assuming one is free. The traps are specific: a booking is not a sailing, so a box rolled by a blank sailing still pays; the surcharge and a general rate increase can arrive together and the contract may or may not stack them; and free time and demurrage terms at the US terminal do not change with the surcharge, so an earlier gate-in that sits in port still costs money.
- Reissue US west coast quotations by 18 September showing the USD 4,000 per FEU surcharge separately, valid to 30 September.
- Set 25 September as the working booking cut-off for cargo that must sail before 1 October, allowing for the 4-5 day berth wait.
- Lift the pre-1 October share of October volume from an assumed 40 to 70 percent, cutting surcharge exposure from USD 96,000 to USD 48,000.
- Confirm in writing whether the carrier charges on gate-in, sailing date or bill of lading date.
- Recheck certificates of origin, commercial invoices and packing lists by 29 September so they match the earlier sailing date.
- Price the east coast or Gulf plus rail alternative against the USD 4,000 before diverting any volume.
For Cross-Border E-commerce
The USD 4,000 per FEU surcharge from 1 October is a unit-cost event for anyone importing into the US west coast. Drewry held its World Container Index at USD 4,476 per 40ft for a second week with Shanghai-Los Angeles up 2 percent to USD 7,352, so the surcharge sits on top of a rate that is already firm. A 40ft box carrying 2,000 units, an assumption for illustration, adds USD 2 of landed cost per unit. Against an assumed USD 12 landed cost, that is a 16.7 percent increase, which is the difference between a comfortable and a thin margin on a mid-priced item.
Assume monthly sales of 20,000 units, ten FEU a month, and 60 percent of October volume sailing on or after 1 October. That is six boxes and USD 24,000 of surcharge. Pulling one extra sailing into September avoids it, and the cost of doing so is inventory: an extra 10 boxes at an assumed USD 12 landed cost is USD 240,000 of stock, held one month at an assumed 6 percent annual funding cost, about USD 1,200. Paying USD 1,200 to avoid USD 24,000 is straightforward arithmetic. The limit is warehouse space and sell-through, so pre-buy only SKUs that turn within 45 days, not the whole catalogue.
Set dates and thresholds. By 20 September, list your top 20 SKUs by contribution and mark which ones can be pre-bought: anything already holding more than 45 days of cover does not qualify. From 22 to 25 September, complete first-leg bookings for the pre-buy and raise safety stock on qualifying SKUs from 30 to 45 days, then stop. Track landed cost per unit daily with the surcharge included, and enforce a margin floor: if unit margin on a SKU falls below the floor, raise the price or drop the SKU rather than absorbing the squeeze. If a booking is rolled by one of the eight blank sailings due next week, flag that SKU as at risk and move it to the air-freight list only if it is a top-five seller.
Alternatives are air freight for a handful of SKUs, shipping later at the higher landed cost, or pausing non-essential SKUs for the month. Air freight usually costs several times the ocean rate, so cap it at the SKUs that fund the quarter. Two traps are worth naming: pre-buying a slow mover to dodge the surcharge converts a freight saving into a markdown and a storage bill, and the charge is decided when the box actually sails, so a pre-bought container that misses the cut-off pays anyway.
- By 20 September, rank the top 20 SKUs by contribution and flag which hold under 45 days of cover.
- Complete first-leg bookings for the pre-buy between 22 and 25 September, raising safety stock from 30 to 45 days only on qualifying SKUs.
- Track landed cost per unit daily with the surcharge included and enforce a per-SKU margin floor.
- Compare an assumed USD 240,000 pre-buy stock position and about USD 1,200 of monthly funding cost against USD 24,000 of surcharge.
- Keep air freight to the top five sellers only, and only when a blank sailing rolls a critical booking.
- Reject pre-buys for any SKU that cannot turn within 45 days, to avoid converting freight savings into markdowns.
For Manufacturing Plants
For a plant importing from or exporting to the US west coast, the operating problem in this story is not the USD 4,000 surcharge but the eight blank sailings due next week and the four to five day berth wait at Shanghai. Drewry's index held at USD 4,476 per 40ft for a second week with Shanghai-Los Angeles at USD 7,352, up 2 percent, so rates are firm while capacity is being withdrawn. A production schedule built on a single arrival date is the schedule that breaks first.
Assume 12 FEU of material a month, a 20-day safety buffer at the plant, and daily material consumption of USD 800,000, all assumptions. Eight blank sailings plus four to five days of berth waiting can push a landing date out by a week or more, which against a 20-day buffer is five to seven days of real exposure. Lifting the buffer to 30 days costs ten extra days of material, about USD 8m tied up once at that consumption rate, plus storage. That is not a reason to refuse the buffer; it is a reason to decide which materials deserve it.
Do it in the last week of September, before the surcharge takes effect. By 25 September, list every material with less than 25 days of cover and raise those to 30 days, prioritising line-stopping items over bulk. Re-plan October around an arrival window of plus or minus five days instead of a single date, and book early enough that the four to five day berth wait is absorbed inside your lead time rather than added on top of it. Agree the trigger with the plant director: a critical shipment more than five days late moves its product to the back of the schedule instead of stopping the line. Spares and key components fly only above that threshold, and the logistics manager owns the weekly routing check.
Alternatives: route via the US east coast or Gulf and move inland by rail, which adds inland cost and transit days but sidesteps the west coast surcharge; pre-buy one extra month of the materials with the shortest lead time; or hold a small air-freight allowance for spares only. The traps are why the plan needs dates. A booking rolled by a blank sailing can still attract the charge, so booking early only helps if the box actually gates in; free time at the US terminal is unchanged, so an early arrival can turn into storage cost; and a schedule built on an average transit time will be wrong most weeks in a period when carriers are pulling capacity.
- By 25 September, raise cover on every material below 25 days to 30 days, line-stopping items first.
- Re-plan October around an arrival window of plus or minus five days instead of a single landing date.
- Book early enough to absorb the 4-5 day Shanghai berth wait inside the lead time.
- Set a trigger: a critical shipment more than five days late sends its product to the back of the schedule.
- Cost the east coast or Gulf plus rail alternative and a spares-only air allowance against the USD 4,000 per FEU surcharge.
- Confirm that free time and demurrage terms at the receiving terminal still match the new arrival pattern.
For Brand Owners
The brand carries the price and promise consequences of both charges: USD 4,000 per 40ft from the Far East and the Indian subcontinent to the US west coast, and USD 10,000 per 40ft from the Indian subcontinent to the US east coast, both from 1 October. The east coast figure is the larger one and applies to a different sourcing base, so a brand sourcing from both India and China faces two separate cost lines rather than one. With Drewry at USD 4,476 per 40ft and Shanghai-Los Angeles at USD 7,352, up 2 percent, the charges land on rates that were already firm.
Assume a line shipping 10 FEU a month to the US west coast, 1,500 units per container and a unit margin of USD 8, all assumptions. The surcharge adds USD 2.67 of cost per unit and cuts margin to USD 5.33, a 33 percent reduction, before any retail price change. Holding the price and accepting that margin is a decision, not a default. Raising the price by USD 4 covers the surcharge and leaves about USD 1.33 of the increase as margin. For a promotional SKU, a bundle that lifts average order value can absorb the cost without appearing to raise price.
Decide before 30 September. Review the October promotional calendar on 26 September and mark any promotion whose unit economics no longer work, then either reprice it or move it to a month without the surcharge. Split channel priority explicitly: channels with contractual delivery dates and higher contribution take the pre-1 October inventory, marketplaces and direct-to-consumer take what is left. Publish a delivery promise with a three to five day buffer for US west coast orders during October, and say why. Your merchandising lead owns the promotion review, your operations lead owns channel allocation, and both work from the same landed cost sheet weekly from 28 September, with each channel's stock position shown separately.
Alternatives are funding the surcharge from margin, repricing, delaying non-seasonal launches into November, or consolidating SKUs so fewer containers carry the same revenue. Each is visible to customers in a different way, so choose deliberately. The traps: a published promotional price is very hard to withdraw, and withdrawing it costs more trust than the margin it saves; a delivery promise lengthened for October should be labelled temporary or customers read it as a permanent downgrade; and pulling stock from a channel with a contractual date to protect a promotion trades a small margin gain for a real service failure.
- Review the October promotional calendar on 26 September and reprice or reschedule any promotion that loses money at USD 4,000 per FEU.
- Decide channel allocation before 30 September: contractual and higher-contribution channels get pre-1 October stock.
- Model USD 4,000 per FEU against an assumed 10 FEU a month, 1,500 units per box and USD 8 unit margin before changing any price.
- Publish a delivery promise with a three to five day buffer for US west coast orders in October and label it as temporary.
- Review one landed cost and channel stock sheet weekly from 28 September, with each channel shown separately.
For Procurement Teams
Two surcharges from 1 October, USD 4,000 per 40ft to the US west coast and USD 10,000 per 40ft from the Indian subcontinent to the US east coast, land on a market where Drewry's index has held at USD 4,476 per 40ft for two weeks and Shanghai-Los Angeles is up 2 percent to USD 7,352. That combination defines the negotiating position: carriers are confident enough to add charges while withdrawing capacity, with eight blank sailings next week. The buyer's job in the last week of September is to price the exposure, not to accept it.
Assume annual volume of 500 FEU to the US west coast with 60 percent bought on the spot market and a surcharge in force for one quarter, all assumptions. The exposure is 300 boxes times USD 4,000 times three months, about USD 3.6m. Cutting the spot share from 60 to 30 percent reduces it to about USD 1.8m, a USD 1.8m reduction in open position, bought with a contracted rate locked before capacity loosens further. That is the trade to argue about in the meeting, and it is a better conversation than a request for a discount.
Run it on a dated schedule. By 22 September, request October to December FAK rates and space guarantees from at least three carriers, and ask each for a written statement on the surcharge: its charge basis, its end date, and whether it stacks with any general rate increase. Target three clauses in every contract: a surcharge cap or an index-linked formula tied to a published index, at least 72 hours written notice of any surcharge change, and an exemption clause releasing volume commitments if routing or capacity changes. Diversify across two US west coast carriers plus one US east coast carrier, and put the spread between west coast and east coast quotes on a monthly scorecard. The category manager owns the negotiation and legal reviews the three clauses.
Alternatives are index-linked contracts, which share downside risk; block space agreements, which buy capacity certainty; and shifting sourcing to Mexico or Southeast Asia, which changes the lane entirely. Each removes a different risk and none removes all of them. The traps: a contract can lock the base rate while leaving surcharges free to move, so the cap clause is the one to fight for; the USD 10,000 India to US east coast figure and the USD 4,000 Far East to US west coast figure rest on different charge bases and should never be blended into one negotiation number; and paying a higher contracted rate in September to escape a surcharge that carriers may reduce later is a bet, so write an end date and a review point into the contract rather than treating it as permanent.
- By 22 September, request October to December FAK rates and space guarantees from at least three carriers in writing.
- Quantify exposure: an assumed 500 FEU a year at 60 percent spot with one quarter of surcharge is about USD 3.6m, cut to about USD 1.8m at 30 percent spot.
- Write a surcharge cap or an index-linked formula tied to a published index into every contract.
- Require at least 72 hours written notice of surcharge changes plus a volume exemption clause for routing or capacity changes.
- Keep two US west coast carriers plus one US east coast carrier and score the port spread monthly.
- Never blend the USD 10,000 India to US east coast figure with the USD 4,000 Far East to US west coast figure in one negotiation number.