Welcome to the Zencargo weekly freight market update – the latest news from our freight and procurement teams on the real experience of shippers.
This week: Storm Kompasu, China’s power outages continue

 


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In Focus: Storm Kompasu is expected to further disrupt ports in China

Chinese officials have ordered ports in the Shenzhen region to suspend operations as Storm Kompasu is expected to pass south of Hong Kong overnight before moving West.

Yantian services were suspended on 12 October and the closure comes as ports in the region are already reporting strong backlogs and heavy levels of congestion.

The storm combined with a power-shortage crisis due to coal shortages and government rationing on electricity has caused a ripple effect on the global supply chain. Congestion is increasingly severe at major Chinese ports, creating further delays and reducing efficiency for the movement of goods out of the country.

Businesses need to be prepared for delays in the coming days.

Ocean

Asia → North America

Rates

  • Rates in Asia to USA dropped during China’s Golden Week. 
    • It is expected that this will increase again due to demand for space and a backlog of shipments.
    • The Freightos Baltic Index (FBX) recorded a 7% decline for both US West Coast and East Coast ports to $16,749 and $19,429 per 40ft respectively
    • The Ningbo Containerised Freight Index (NCFI) saw its US West Coast index decrease by 0.8% and its East Coast index decrease by 0.7% as it reported ‘full loads’ for departing sailings.

 

Capacity

  • Forecasts for October US retail imports are expected to decrease slightly from last year’s numbers as congestion is slowing the movement of backed-up cargo. 
  • October is forecasted at 2.21 million TEU, down 0.3 percent year-over-year, but still the sixth-busiest month on record as imports remain high. This year-over-year decline would be the first since July 2020. 
  • COVID-19 infections in Asia have slowed the loading of US bound ships.

Ports

    • The closure of factories during Golden Week should allow US ports to catch up with the processing of containers through their terminals.
    • Shortages of equipment, labour and outbound truck and rail capacity have continued to build congestion at U.S. ports.
    • Nearly 75 ships were waiting at anchor to enter the Ports of Los Angeles and Long Beach in September, up from around 25 a month earlier. A backlog of ships has also spread to East Coast ports as well.

 

City Soonest Availability Date Important Note! Notice Required (Estimated)
ATLANTA 10/15 (chassis shortage) Export Congestion / limited hazardous availability 1.5 weeks
BIRMINGHAM 10/15 Export Congestion 1.5 weeks
BOSTON 10/11 1 week
CHARLESTON 10/29 4 weeks
CHARLOTTE 10/18/2021 (chassis shortage) 2 weeks
CHICAGO 10/27/2021 – HAZ 10/30 (Chassis shortage) Export Congestion 3 weeks
CINCINNATI 10/12 (Chassis Shortage) 1 week
CLEVELAND 10/8 (Chassis Shortage) Export Congestion 1 week
DALLAS 10/12 Export Congestion 1 week
DENVER Local OPEN Road 10/13 (Chassis Shortage) Export Congestion 2 days local / 1.5 weeks for road moves
DETROIT Local 10/14 Road 10/21 (Chassis Shortage) Export Congestion Local 1.5 weeks / Road 2.5 weeks
HOUSTON 10/21 local – 11/1 road (container and chassis shortage) Export Congestion / Limited availability for DFW area 2.5-3.5 weeks
HUNTSVILLE 10/14 1.5 weeks
INDIANAPOLIS 10/14 (chassis shortage) Export Congestion 2 weeks
KANSAS CITY 10/15 (Chassis Shortage) Export Congestion 1.5 weeks
LONG BEACH 2-Nov Limited reefer & hazardous availability 4 weeks local/5 weeks for road moves
LOUISVILLE 10/14 (Chassis Shortage) Export Congestion 1.5 weeks
MEMPHIS 10/19 (Chassis Shortage) Export Congestion – EXTREMELY limited hazardous coverage 2 weeks
MIAMI 10/25 VERY limited availability out of SFCT, Limited haz availability 3.5 weeks
MINNEAPOLIS 10/12 (Chassis shortage) 1.5 weeks
MOBILE 10/27 (Chassis Shortage) EXTREMELY limited availability for moves over 300 miles and/or OW loads 3.5 weeks
NASHVILLE 10/14 (Chassis shortage) Export Congestion 1 week
NEW ORLEANS 10/14 2.5 weeks
NORFOLK 11/1 (Chassis shortage) Very limited availability for PA moves 4 weeks
NY/NJ 11/3 (Chassis Shortage) Export Congestion 4 weeks
OMAHA 10/12 Very limited triaxles 1 week
PHILADELPHIA 10/21 (Chassis shortage) 2.5 weeks
PORTLAND 10/15-very limited truck availability/Exports-soonest is November 1.5-2weeks
SAINT LOUIS 10/21 (chassis shortage) Export Congestion – limited availability for triaxles. 2 weeks
SAVANNAH 11/3 – HAZ 11/8 (Chassis shortage) Export Congestion / limited haz and triaxle availability 4 weeks
SEATTLE/ TACOMA 10/19 (chassis shortage) Very Limited availability for exports and moves out of Tacoma ports

 

 

Asia → Europe (Far East Westbound)

Rates

  • Rates have been extended and continue to be stable.
  • For Asia-Europe, both the FBX and WCI indices recorded small percentage increases
    • The FBX has increased by 1% for both North Europe and Mediterranean ports, to $14,703 and $13,121 per 40ft, respectively.
    • The WCI North Europe component added 2%, to $14,807 per 40ft, and its reading for the Mediterranean was up by 1%, to $13,765 per 40ft.

Equipment

  • See below

Capacity

  • Only two out of 17 ships arriving in China this week completed their Far East to North Europe round trip in time.
    • At least 44 extra ships of between 14,000 to 24,000 teu would be needed on this lane to maintain weekly sailings on all loops
    • THEA is facing consequences of longer round trips for maintaining all regular calls. 
  • Container ships are currently arriving with an average of 18 days in China after a full round trip between the Far East and North Europe. 
    • Average delays of seven days for the Ocean Alliance
    • Average delays of 19 days for 2M VSA
    • Average days of 25 days for The Alliance. 

Ports

  • Felixstowe, the UK’s largest container port, was forced to briefly suspend the return of empties
    • This has created further congestion and has led to major carriers including Maersk, Evergreen and CMA to divert ships from this port. 
    • The closure of the yards at Felixstowe has had a ripple effect on other ports in the UK. An influx of empty returns are occurring at London Gateway which was also forced to close its gates briefly last week. 
    • While both ports have reopened, port officials are encouraging shipping lines to remove empties from the yards as quickly as possible. 
  • Ocean carriers are reducing the amount of import container free-time at North European ports. 
    • Carriers argue this is to tighten up free-time at ports to incentivise importers to take delivery of cargo promptly thus improving the reliability of the supply chain by returning empty equipment back to Asia earlier. 

 

Carriers POL 20GP 40GP 40HQ
HPL NINGBO Normal Shortage Shortage
SHANGHAI Normal Shortage Shortage
YANTIAN Normal Normal Normal
SHEKOU Normal Normal Normal
MSK QINGDAO Normal Shortage Shortage
SHANGHAI Normal Normal Normal
NINGBO Normal Normal Normal
Nanjing Shortage Shortage Shortage
Xiamen Normal Shortage Shortage
YANTIAN Normal Normal Normal
SHEKOU Normal Normal Normal
NANSHA Normal Normal Normal
HONGKONG Normal Normal Normal
SHANTOU Normal Normal Normal
ONE YANTIAN Normal Normal Normal
SHEKOU Normal Normal Normal
XINGANG Normal Normal Normal
QINGDAO Normal Normal Normal
SHANGHAI Normal Normal Normal
NINGBO Normal Normal Normal
ZIM XIANGANG Normal Normal Shortage
NINGBO Normal Shortage Shortage
SHANGHAI Normal Normal Normal
YANTIAN Normal Normal Shortage
SHEKOU Normal Normal Shortage
HMM SHANGHAI Normal Normal Normal
NINGBO Normal Normal Normal
YANTIAN Normal Normal Normal
SHEKOU Normal Normal Normal
MSC SHANGHAI Normal Normal Normal
NINGBO Normal Normal Normal
YANTIAN Normal Normal Normal
SHEKOU Normal Normal Normal
EMC YANTIAN Normal Shortage Shortage
SHEKOU Shortage Shortage Shortage
NINGBO Normal Shortage Shortage
SHANGHAI Normal Normal Normal
QINGDAO Normal Normal Normal
OOCL YANTIAN Normal Normal Normal
SHANGHAI Normal Normal Normal
NINGBO Normal Normal Shortage
CMA QINGDAO Normal Shortage Shortage
SHANGHAI Normal Shortage Shortage
NINGBO Normal Shortage Shortage
YANTIAN Normal Shortage Shortage
SHEKOU Normal Shortage Shortage
cosco YANTIAN Normal Normal Normal
SHEKOU Normal Normal Normal
SHANGHAI Normal Normal Shortage
NINGBO Normal Normal Shortage
QINGDAO Normal Normal Normal
DALIAN Normal Normal Normal
XINGANG Normal Normal Normal
YML YANTIAN Normal Shortage Normal
SHEKOU Normal Shortage Normal

 

Europe → USA (Transatlantic Westbound)

Rates

  • Container spot rates on the transatlantic this week were flat
    • According to the WCI rates have stayed at $6,209 per 40ft
    • FBX rates have increased by 2%, to $6,986 per 40ft
  • Freight rates between North Europe and the US east coast have soared by over 200% since March. 
  • Shippers on the route are facing an increase in surcharges as congestion at the US east coast ports worsens.

Air

Asia 

1. US market

    • There are strict epidemic control measures at PVG airport. 40% of cargo flights have been cancelled for one month and we have no news on when they will be reinstated. Terminal workers are still working to the closed loop system, meaning they are working 14 days on/14 days off, this is resulting in reduced manpower and delays. 
    • There are currently issues with shipments flying into JFK due to lack of manpower, which is resulting in an increase of ULD breakdown times. Air China service to JFK should be avoided. 
    • Rates have decreased this week due to the 7 day holiday and not all factories returning to work. We expect this reduction to be short lived and rates will start to increase again in the lead up to Christmas.
    • Rates and space must be checked on a case-by-case basis.

2.  EU market (base airport like FRA/AMS/LUX, etc)

    • There are strict epidemic control measures at PVG airport. 40% of cargo flights have been cancelled for one month and we have no news on when they will be reinstated. Terminal workers are still working to the closed loop system, meaning they are working 14 days on/14 days off, this is resulting in reduced manpower and delays. 
    • Rates have decreased this week due to the 7 day holiday and not all factories returning to work. We expect this reduction to be short lived and rates will start to increase again in the lead up to Christmas.
    • Rates and space must be checked on a case-by-case basis

3. UK market

    • There are strict epidemic control measures at PVG airport. 40% of cargo flights have been cancelled for one month and we have no news on when they will be reinstated. Terminal workers are still working to the closed loop system, meaning they are working 14 days on/14 days off, this is resulting in reduced manpower and delays. 
    • There are currently no direct flights operating to LHR. 
    • Rates have decreased this week due to the 7 day holiday and not all factories returning to work. We expect this reduction to be short lived and rates will start to increase again in the lead up to Christmas.
    • Rates and space must be checked on a case-by-case basis. 

Americas

  • Rates into Asia have increased slightly over the last week.
  • Rates to the UK and Europe remain the same. 
  • JFK Airport is experiencing backlogs breaking down their ULD’s. Air China and their ground handling agent is particularly affected. 
  • USA is set to lift travel ban for most noncitizens from November, so long as they are vaccinated. The eased rules are expected to drive up demand for transatlantic travel. This is good news for the air freight industry as this will no doubt bring more flights and capacity for cargo. 
  • ORD is still over capacity and there are issues over release updates. Forwarders are having to send in trucks to collect without knowing if freight is ready and the ground handling agents aren’t answering their phones 
  • Forwarders are choosing to use smaller airports as much as possible as there is less congestion. Freight rates will be higher but there is less chance of incurring additional costs for attempted pickups, waiting time and storage. 
  • LAX is still a challenge, there are usually waiting time charges applied to most shipments due to the long queues to collect/deliver into the ground handling agents warehouse

Europe/UK

  • Rates into Asia and North America remain stable as there seems to be enough capacity to meet demand.
  • USA is set to lift travel ban for most non-citizens from November, so long as they are vaccinated. The eased rules are expected to drive up demand for transatlantic travel. This is good news for the air freight industry as this will no doubt bring more flights and capacity for cargo.

Road

UK Haulage

HGV Driver Shortages Continue

An extra 2,000 training places will be available to increase the number of lorry drivers, but they are unlikely to have much effect before Christmas. The places will be available through previously announced “skills boot camps” backed by £17m government funding and with participants being guaranteed a job interview afterwards. The UK shortfall is estimated to stand at 100,000, according to the Road Haulage Association, and has been blamed for the recent fuel crisis.

Congestion at the port of Felixstowe

The Port of Felixstowe is struggling to cope with the volume of cargo and has become severely congested. The HGV driver shortages combined with the pre-Christmas peak, congested inland terminals, poor vessel schedule reliability and the pandemic, has resulted in a build-up of containers. The port’s management is taking action to improve the flow of traffic but is considering turning vessels away unless the situation improves.

European Bank Holidays

October 12th = Spain

October 23rd = Hungary and Macedonia

October 25th = Cyprus, Czechia, Greece

October 26th = Austria

October 29th = Turkey

October 31st = Germany (Regional) and Slovenia

The route ahead

The information that is available in the Weekly Market Update comes from a variety of online sources, partners and our own teams. Click below to learn more about how Zencargo can help make your supply chain your competitive advantage.

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