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: China’s power cuts and Golden Weekly Holiday

 


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In Focus: Power cuts and blackouts before Golden Week promise 

This week’s news from China promises additional disruption as shippers attempt to reinforce inventories before the festive season.

As more parts of the world are reopening after pandemic-induced lockdowns, we’re seeing additional pressure on China’s electricity-hungry factories. Compared with last year, electricity demand is growing this year in China at nearly twice its usual annual pace.

Outages have rippled across most of eastern China such as Guangdong (Shenzhen, Guangzhou, Dounguan), Anhui, Zhejiang (Ningbo), Shandong (Qingdao).

Despite the government’s climate change goals to cut energy consumption, factories have purchased generators to remain at normal production. 

This new challenges comes just before Golden Week. The 7-day holiday begins from October 1st and runs until the 7th. During this period almost all businesses and factories, as well as government organisations will be closed or low-staffed. This means that production will be slowed down or completely stopped. Airports, sea ports and warehouses will be operating with limited capacity whereas customs offices will be closed. 

Ocean

Asia → North America

Rates

  • Rates are still highly inflated. Spot container freight rates have declined on the Freightos Baltic Index (FBX)
    • China to US west coast – $19,173 per 40ft
    • China to US east coast – $21,697 per 40ft
    • Declines in rates could be due to a loosening capacity in advance of Chinese National Day which takes place on 1 October for 3 days

Capacity

  • One vessel is being delivered at 11,000 teu from Yang Ming
  • Overall capacity is very tight as containers are currently stuck outside the US. China to US ocean shipments are taking an average of 73 days to arrive at their final destination
  • Containers are currently stuck outside the US West and East Coasts and will not be able to return empty to pick up more cargo
    • The dwell time for containers at 11 major railroad depots reached an average of 9.8 days this month according to Hapag-Lloyd AG
    • In L.A., containers have to wait 16 days before being picked up
    • Delays are also surging in Charleston, South Carolina and Detroit
    • However, there have been improvements in Long Beach and Kansas City
  • Maersk have deployed gap loaders and launched new TP-X and TP20 services on for the US west and east coast to bolster capacity and improve schedule reliability

Equipment

  • There is a general chassis shortage
    • The availability for LA and New York is 4 weeks ahead 
    • The availability for Norfolk is 3 weeks ahead
    • Tacoma and Seattle are slightly better with availability between 2.5 to 3 weeks ahead

Ports

  • MSC has added a call in Portland, Oregon which is being assessed as to whether it is an option for customers trying to get their goods into the middle of the USA
  • New York is on a 7 day delay with 85% density on the yard. However, there are not huge queues of vessels waiting to berth
  • Savannah has delays of 5 – 7 days with 30+ vessels waiting to berth
  • Seattle has delays of 16 – 18 days with 11 ships waiting to berth
  • More than 70 ships are currently in front of L.A. and Longbeach port waiting to dock. This amounts to approximately 500,000 TEUs sitting out at sea on the West Coast
  • Chicago has an 8 day delay

Europe → USA (Transatlantic Westbound)

Rates

  • Freightos spot rate remains at $6,869 per 40ft

Capacity

  • An extra vessel has been added on the 2M TA2/NEUATL2 Transatlantic service which will make a 6 week round trip
    • Currently this route calls at North European ports and the East Coast of the US
    • It has been announced that the 7,114 teu Santa Rosa will be added to the service and will call at Felixstowe from  Q1, 2022. This will also add a call at Charleston, while Baltimore and Norfolk will be switched in the port call rotation
  • This is in response to ongoing port congestion and operational constraints taking place in North Europe and North America

Asia → Europe (Far East Westbound)

Rates

  • Rates will be extended for the majority of carriers
  • Rates are not dropping because of a lack of capacity in the market
  • According to the FBX spot rates on the Asia-North Europe route continues to edge up, reaching $14,593 this week

Capacity

  • Vessels remain full booked and the schedule integrity is still poor
  • New vessels are entering the market:
    • Two ships above 20,000 teu – one for Evergreen and the other is for MSC – going from Asia to Europe
    • Another ship has been delivered at 15,000 teu for CMA and will be going from Asia to the Mediterranean
  • Maersk has announced that they will adjust vessel voyage numbers in anticipation of upcoming holidays such as China’s Golden Week and Chinese New Year.
    • They will rationalise some of its service coverage to reduce the number of port calls
    • Maersk have invested in-fleeting of new containers to provide sufficient stock for Q4
    • They have advised customers to plan their supply chains ahead for the upcoming holiday rush

Equipment

  • See below

Ports

  • Exceptional waiting time for vessels in the port of Hamburg means that 2M’s AE7/Condor Asia-North Europe service would drop calls at the German gateway for the next 13 weeks and switch to Bremerhaven’s NTB terminal 
Carriers POL 20GP 40GP 40HQ
HPL NINGBO Normal Normal Shortage
SHANGHAI Normal Normal 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 Shortage Shortage Shortage
ONE YANTIAN Normal Shortage Shortage
SHEKOU Normal Shortage Shortage
XINGANG Normal Shortage Shortage
QINGDAO Normal Shortage Shortage
SHANGHAI Normal Shortage Shortage
NINGBO Normal Shortage Shortage
ZIM XIANGANG Normal Shortage Shortage
NINGBO Normal Shortage Shortage
SHANGHAI Normal Normal Normal
YANTIAN Normal Shortage Shortage
SHEKOU Normal Shortage Shortage
HMM SHANGHAI Normal Normal Normal
NINGBO Normal Normal Shortage
YANTIAN Normal Normal Shortage
SHEKOU Normal Normal Shortage
MSC SHANGHAI Normal Shortage Normal
NINGBO Normal Shortage Normal
YANTIAN Normal Shortage Normal
SHEKOU Normal Shortage Normal
EMC YANTIAN Normal Shortage Shortage
SHEKOU Shortage Shortage Shortage
NINGBO Shortage Shortage Shortage
SHANGHAI Shortage Shortage Shortage
QINGDAO Normal Normal Normal
OOCL YANTIAN Normal Normal Normal
SHANGHAI Normal Normal Normal
NINGBO Normal Normal Normal
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 Shortage
SHEKOU Normal Shortage Shortage

Air

Asia 

1. US market

    • Bookings will be closed from 29th September due to Golden Week. 
    • Space will be very tight and equipment in high demand leading up to the holiday. There will be major challenges due to the reduced capacity and staff shortages due to the pandemic. So longer lead times should be expected. 
    • Rates and space must be checked on a case-by-case basis. 

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

    • Bookings will be closed from 29th September due to Golden Week. 
    • Space will be very tight and equipment in high demand leading up to the holiday. There will be major challenges due to the reduced capacity and staff shortages due to the pandemic. So longer lead times should be expected. 
    • Passenger flights are fully booked until 8th Oct. There is some remaining space on freighter flights but will need to be booked up quickly.
    • Rates and space must be checked on a case-by-case basis.

 

3. UK market

    • Bookings will be closed from 29th September due to Golden Week. 
    • Space will be very tight and equipment in high demand leading up to the holiday. There will be major challenges due to the reduced capacity and staff shortages due to the pandemic. So longer lead times should be expected.
    • Passenger flights are fully booked until 8th Oct. There is some remaining space on freighter flights but will need to be booked up quickly. 
    • Over the past 2 weeks there has been an unprecedented rise in volume across imports and exports to and from the UK. Airlines are struggling with the increase in volume which is resulting in increased waiting times.
    • Rates and space must be checked on a case-by-case basis.

 

Americas

  • Rates into Asia, UK and Europe remain mostly the same this week
  • 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 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.

Road

News

  • The UK are currently suffering a fuel crisis due to panic buying from consumers
    • Competition law is to be suspended to allow fuel companies to coordinate where they can send their supplies
  • The UK government have urged former lorry drivers to get behind the wheel to help solve labour shortages. 
    • They have announced a temporary visa scheme for 5,000 EU lorry drivers 

UK Haulage

  • Continuing to see deterioration in the market which will continue until Christmas 
    • Hauliers are currently full for October
    • Containerlift is now operating up to three weeks in advance 
    • Urgent deliveries are available but prices are up to 3 times that of standard deliveries
  • Storage
    • Felixstowe have a backlog of over a 1000 boxes to move 
    • To move anything, there is a wait of about a week 
    • Pentalver Felixstowe have asked customers to move boxes within 48 hours regardless of a contract or spot movement
    • Freightliner Laden Deepstore
      • Any laden container that has not left the terminal for delivery on day 11 with no special agreement will be moved to deep storage
      • Any laden container that is moved to the deep storage stack will incur the following additional charges;
        • Lift into stack – £65.00
        • Lift out of stack – £65.00
      • Once in deep storage stack following charge will replace standard charges
        • Storage Charges – £28.00 per TEU Per Day (Including weekends/Bank Holidays)
      • Terminals will require 3 full working days of notice in order to make containers available from the deep storage stack when being released for final delivery. 

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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