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: Chinese air freight squeeze, Ningbo to reopen, congestion climbing

In Focus: Closed Loop Management System squeezes capacity at main China airports

Workers in China are facing new quarantine rules in the wake of the spread of the Delta variant of Covid-19. The Closed Loop Management system means that workers are required to work for 7 days, rest for another 7 days and then quarantine for a further 7 days. This has meant that workforces have been reduced by a third and handling speeds at main airports such as Shanghai Pudong, Beijing and Xiamen are severely affected.

We are seeing a lot of flights departing with limited or no cargo,  hundreds of other flights cancelled and reports of ground handling staff in China quitting in large numbers.

This will undoubtedly have an effect on any freight departing China in the coming weeks and will continue to have an effect on uplift of cargo and air freight rates well into September. Shippers should be prepared for handling issues, offloads and increased rates.

In addition to this, due to several crew members testing positive for Covid-19, China Cargo Airlines and China Eastern Airlines have suspended passenger belly freighters until the end of August.

This situation, on top of the already severely reduced capacity we were facing means that demand is now even further outstripping the supply, with prices to the US increasing by $1.5-$3 per kg over the past two weeks, while rates to Europe were up $0.7-$1.5 per kg.

 


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Ocean

Asia → North America

Rates

  • Space remains extremely tight due to congestion and demand.
  • Rates to the inland locations are currently around $25,000-$30,000, with East Coast seaport rates between $20,000-$24,000 and the West Coast around $17,000 – $20,000

Capacity

  • Ningbo terminal will partially reopen on August 24th, with a full reopening scheduled for September 1. Agents anticipate it will take 10 days to two weeks to clear the backlog with the whole port back to normal operations by the middle of next month
  • Over the next four weeks, The Alliance (Hapag-Lloyd, ONE, Yang Ming, HMM) has announced 12 cancellations, followed by 2M (Maersk, MSC) and Ocean Alliance (CMA CGM, COSCO, Evergreen) with four and two cancellations, respectively.
  • MSC is revising the rotation of the existing Indus Express service and Indusa service and is also launching a new Indus 2 service, starting on 30 August 2021, focusing on Northwest India and US East Coast markets.

Equipment

  • See below

Ports

  • Delays have seen the number of vessels awaiting a berth at Long Beach or Los Angeles increase in recent days, the latest AIS data from VesselsValue showing 31 ships at anchor in San Pedro Bay.
Carriers POL 20GP 40GP 40HQ
HPL NINGBO Shortage Normal Shortage
SHANGHAI Shortage Normal Shortage
YANTIAN Shortage Shortage Shortage
SHEKOU Shortage Shortage Shortage
MSK QINGDAO Normal Shortage Shortage
SHANGHAI Normal Shortage Shortage
NINGBO Shortage Shortage Shortage
Nanjing Shortage Normal Shortage
Xiamen Shortage Normal Shortage
YANTIAN Shortage Normal Shortage
SHEKOU Shortage Shortage Shortage
NANSHA Shortage Normal Shortage
HONGKONG Normal Normal Normal
SHANTOU Shortage Normal Shortage
ONE YANTIAN Normal Normal Shortage
SHEKOU Normal Normal Shortage
XINGANG Normal Normal Shortage
QINGDAO Normal Normal Shortage
SHANGHAI Normal Normal Shortage
NINGBO Shortage Shortage Shortage
ZIM XIANGANG Normal Shortage Shortage
NINGBO Shortage Shortage Shortage
SHANGHAI Shortage Shortage Shortage
YANTIAN Normal Shortage Shortage
SHEKOU Normal Shortage Shortage
HMM SHANGHAI Normal Normal Shortage
NINGBO Normal Shortage Shortage
YANTIAN Normal Shortage Shortage
SHEKOU Normal Shortage Shortage
MSC SHANGHAI Normal Normal Normal
NINGBO Normal Normal Normal
YANTIAN Normal Normal Normal
SHEKOU Normal Normal Normal
EMC YANTIAN Shortage Shortage Shortage
SHEKOU Shortage Shortage Shortage
NINGBO Shortage Shortage Shortage
SHANGHAI Shortage Shortage Shortage
QINGDAO Shortage Shortage Shortage
OOCL YANTIAN Normal Normal Normal
SHANGHAI Normal Normal Shortage
NINGBO Normal Normal Shortage
CMA QINGDAO Shortage Shortage Shortage
SHANGHAI Shortage Shortage Shortage
NINGBO Shortage Shortage Shortage
YANTIAN Shortage Shortage Shortage
SHEKOU Shortage Shortage Shortage
cosco YANTIAN Normal Normal Normal
SHEKOU Normal Normal Normal
SHANGHAI Normal Normal Normal
NINGBO Normal Normal Normal
QINGDAO Normal Normal Normal
DALIAN Normal Normal Normal
XINGANG Normal Normal Normal
YML YANTIAN Normal Normal Normal
SHEKOU Normal Normal Normal

Asia → Europe (Far East Westbound)

Rates

  • Rates have increased marginally, or in some cases not at all for the second half of August.
    • Rates to UK vary from $15,500 to $16,500 on FAK
    • Rates to EU vary from $14,000 to $14,700 on FAK

Capacity

  • After clearing its recent congestion, Chittagong port is planning a US$125 million upgrade to enhance its container handling capabilities by one million TEU.
  • Over the next four weeks, The Alliance (Hapag-Lloyd, ONE, Yang Ming, HMM) has announced 12 cancellations, followed by 2M (Maersk, MSC) and Ocean Alliance (CMA CGM, COSCO, Evergreen) with four and two cancellations, respectively.

Equipment

  • See below

Ports

  • Alliance networks operating between Asia and North Europe are experiencing delays of up to a month due to worsening port congestion at both ends of the trade lane. Time in port or waiting for berthing windows has increased substantially, to around 40% of the schedule.
Alliance EUR BLANK SAILING
Service V/V Nominal Capacity/ Teu ETD QINGDAO ETD SHANGHAI ETD NINGBO ETD SHEHZHEN ETD WEEK SHENZHEN
THE FE2 TBA 21,000 / 2021/8/1 2021/8/3 2021/8/7 31
FE3 TBA 24,000 / / / 2021/8/9 32
FE4 TBA 16,000 2021/8/6 2021/8/15 2021/8/12 2021/8/18 33
FE2 TBA 21,000 / 2021/8/22 2021/8/24 2021/8/28 34
FE3 TBA 24,000 / / / 2021/8/30 35

Air

Asia

US market

  • Rates are stable this week, but we expect the current issues faced in Shanghai and other main airports will eventually have an impact on the airfreight rates.
  • China Southern, American Airlines, Qantas, Asiana, Korean Airlines and China Cargo Airlines all continue to cancel a number of flights into various destinations in North America.
  • Spot rates available for heavy/dense cargo as well as volume cargo.
  • For all airports – rates and space must be checked on a case by case basis.

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

  • Rates into Europe have increased compared to last week
  • China Southern has cancelled some flights, which is affecting capacity into Europe.
  • Air France/KLM have cancelled passenger cargo flights until further notice
  • Recommendation is still to try and book space well in advance.
  • Rates and space must be checked on a case by case basis.
  • Spot rates available for heavy/dense cargo as well as volume cargo.

UK market

  • Rates into Europe have increased compared to last week
  • China Southern has cancelled some flights, which is affecting capacity into Europe.
  • Air France/KLM have cancelled passenger cargo flights until further notice
  • Recommendation is still to try and book space well in advance.
  • There are good spot rates out there if other, regional airports can be used – but there are restrictions on commodities, so it is always best to check.
  • There is space available on Cathay Pacific and Singapore Airlines, if booked well in advance.
  • Rates and space must be checked on a case by case basis.
  • Spot rates available for heavy/dense cargo as well as volume cargo.

Americas

  • Rates remain mostly the same this week, into UK, Europe and Asia
  • Space remains constricted due to reduced capacity and staff shortages.
  • US hauliers are still over capacity. We are facing delays and storage charges due to long turn around times with breaking down freight and then long queues at the airports to collect freight. Main hubs such as ORD and LAX are the worst affected.
  • Certain ground handling agents in LAX and ORD are still severely behind with breaking down freight. In some cases this is taking up to 3 weeks. It is important to ask advice from a US agent when choosing your carriers into these airports as the ground handling agent is determined by the carrier.

Europe

  • Rates into North America and Asia remain stable this week.
  • Capacity to most regions remains severely restricted

Road

Availability

Availability generally reliable across all routes and regions, though there are signs of a general UK strike on August 23rd from drivers which will cause significant disruption.

Rates

Rates remain stable across consolidated, groupage and dedicated trailers on other routes.

Customs

Border situations have improved considerably with clearances running smoothly.

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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