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: The majority of container shipping trades are facing bottlenecks

 


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In focus: The majority of container shipping trades are facing bottlenecks

The latest data from Sea Intelligence’s October 2021 Global Liner Performance report shows that congestion has not only affected the Trans-Pacific and Asia-Europe route. 

Of the 34 lanes covered in the report, the numbers revealed that nearly all container trade routes faced vessel delays in September 2021. This indicates that the congestion problems leading to delays is a global issue and can not be isolated to just a few large key trades.

 

Ocean

Asia → North America (Transpacific Eastbound)

Rates

    • A downward trend in spot rates, decreasing to under $10,000 in some cases.
    • Rates need to be monitored as increases are anticipated in response to increasing demand. 
    • According to the Freightos Baltic Exchange (FBX) spot rates from Asia to the US West Coast slumped by 26% in the past week to $13,924 per 40ft.
    • Spot rates from Asia to the East Coast decreased by 20% to $15,865 per 40ft.

Capacity

  • New US consumption data has been released for September 2021 by the US Bureau of Economic Analysis. 
    • Growth in personal consumption has reversed back to pre-pandemic levels in September 2021.
    • Growth in consumption of goods is still fast outpacing that of services. 
    • This consumption boom is driving container volumes and shows no signs of abating in September. We do not expect to see a decline in demand to alleviate congestion in the short to medium term.
  • Wan Hai has started to divert ships from its Asia-US West Coast service to its core intra-Asia services. This is due to severe congestion at Californian ports affecting its sailing schedules.  

Ports

  • Delays at Long Beach and LA are still ongoing.
    • 79 vessels are waiting to berth in both ports.
    • An estimated 500,000 TEU of holiday goods are sitting at anchor in the San Pedro Bay area awaiting a berth. 
    • The Los Angeles Signal data shows that another 158,000 TEU of manifested cargo is due to arrive at the port this week. 
    • However, there will be a significant drop in imports heading to the US West Coast as 96,000 TEU of cargo will arrive between the 21st to 27th November.
  • Tacoma has been suffering from worsening congestion and is following in the same steps as Los Angeles and Long Beach. .
    • Late fees of $230 a day kick in once a container has been at a terminal for more than four days.
    • The port’s Husky terminal will not release containers that have been on the premises for more than 15 days until importers pay an additional one-time charge of $315. 
    • From 15th November, customers of the Washington United Terminal face a long-term dwell fee of $310 for containers at the terminal for more than 15 days. 
  • From the beginning of December, transport company Norfolk Southern will cut free dwell time for importers at 27 second-tier rail ramps. 
    • Importers will now incur charges from the day after notification of a container’s availability.
    • The rail carrier is also raising demurrage fees in all 27 locations and will charge $200 on the first day beyond the limit, and $215 for each additional day. 

Asia → Europe (Far East Westbound)

Rates

  • Spot rates from HMM, Evergreen, MSC and Yang Ming continue to be stable for the second half of November. 
  • The Drewry’s World Container Index has announced that rates from Asia to North Europe remained unchanged at $13,801 per 40ft which is 500% higher than a year ago. 
  • The Suez Canal has announced that they will increase their fees by 6% from 1st February 2022. 

Capacity

  • In China, power restrictions will be stopped in December
    • Factories should be running as normal in December. 
    • Demand is expected to increase from the end of November to mid January in time for Chinese New Year. 
  • In Vietnam, a reduction in Covid measures has resulted in greater investment in services. However, there is still a lot of congestion due to a backlog of existing demand.
  • The average delay of a roundtrip on this lane is 17 days.
    • The delay from the 2M Alliance is 15 days
    • The Ocean Alliance has an average delay of 9 days
      • However, services that did not skip ports had an average delay of 17 days. 
    • The Alliance has an average delay of 36 days. The reason for this delay is because The Alliance calls at all North European ports.

Ports

  • Congestions and bottlenecks at the Port of Rotterdam are likely to persist through 2022 despite throughput volume being above 2019 levels. 
    • Rotterdam continues to be constrained by various logistical challenges. 
    • Ships are not currently waiting outside the port but storage capacities are full.
    • The port is taking various short-term steps including data sharing,to increase the speed of throughput, and long-term infrastructure investments in expansions and connections with the hinterland.

Europe→ USA (Transatlantic Westbound)

  • Capacity
    • The average delays for the Transatlantic services is around 9 days
    • Only two of the nine ships returning to the Benelux area in week 45 between North Europe and the US East Coast completed their voyages within schedule.

Air

Asia 

Central China to USA and Europe

  • The China International Import Expo was hosted in Shanghai between 5th November to 10th November. Nearly all preighters are still cancelled for this week. 
  • There has been no change to the epidemic at PVG airport and 40% of flights will remain cancelled for the next month. Terminal workers are still working in line with a closed loop system, therefore PVG is operating with less than 50% of its usual manpower. 
  • Rates from Shanghai this week are stable but still at a high level. Space is still extremely tight. 
  • Rates for Ningbo airport to the USA have decreased this week, however rates have increased to Europe.
  • Rates and space need to be checked with carriers on a case-by-case basis. 
  • Large shipments should be booked in advance to allow time to find space.
  • We are being told that space should be booked before final confirmation of rate.

North China to USA and Europe

  • Rates are increasing from TSN Airport for both USA and Europe. 
  • Space must be reserved in advance.
  • From PEK Airport to both the USA and Europe, rates have decreased from last week. 
  • From 17th November, there will be a new COVID-19 control policy. All truck drivers will need to provide proof of a negative test when entering the Beijing area. This will likely affect trucking lead time. 
  • We are being told that space should be booked before final confirmation of rate. 

South China to USA and Europe

  • Air rates at CAN Airport have increased for both the USA and Europe. Space is also relatively limited.
  • Rates have also increased for SZX Airport and space is tight.
  • At XMN Airport, rates have increased and spaces are limited. 
  • All rates need to be checked with carriers on a case-by-case basis.

Americas

  • US shippers are facing delays of up to two weeks to recover cargo at New York’s JFK and Los Angeles’ airports.
  • Severe delays are being reported at JFK across several handlers.
    • China Airlines and China Cargo Airlines have delays of nine to 10 days for cargo recovery. 
    • Emirates, Etihad and Kalitta Air are experiencing delays of three to four days. 
    • MSN has delays of one to two weeks.
    • Lufthansa Cargo’s handling operation is also facing similar challenges.
  • Los Angeles Airport is also under pressure. 
    • China Eastern’s cargo is said to be facing pick-up delays of up to 15 days. 
  • Alliance and Swissport in Atlanta are seeing a few days worth of delays.
  • Miami and Chicago O’Hare Airport are relatively clear for all handlers. 

Europe/UK

  • London Heathrow is currently struggling to cope with demand, resulting in long queues to drop or collect cargo.
  • Thai Airlines has stopped taking export bookings due to the situation.
  • Airlines that use the World Freight Service have been affected. This includes Saudia Airlines, Thai Airlines, Singapore Airlines, American Airlines and Gulf Air. 

 

Road

UK Haulage

UK confirms pledge for zero-emission HGVs by 2040

The government has confirmed that all new heavy goods vehicles (HGVs) in the UK will be zero-emission by 2040. It said the UK “will become the first country in the world to commit to phasing out new, non-zero emission heavy goods vehicles weighing 26 tonnes and under by 2035”, with all new HGVs sold in the UK to be zero emission by 2040.

European Road Shortages to Continue

As we approach the end of the year, road freight capacity between Europe and the UK is expected to decrease even further. With the ongoing HGV driver shortages and high consumer demand, more rail freight services are being scheduled to relieve some of the pressure and ensure shelves stay stocked this holiday period.

European Bank Holidays – November 2021

We anticipate a shortage of availability and the occurrence of delays around the bank holiday periods. Plan ahead and allow extra time for your products to be delivered.

November 17th – Slovakia, Germany (Regional), Czechia

November 18th – Morocco, Latvia, Croatia

November 30th – Romania

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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