Ocean Freight Market Update
Asia → North America (Transpacific Eastbound)
Rates: Rates have not changed in the 1st week of 2021, with West Coast rates ranging from $3800 – $4500. However, premium charges are still applicable and can range from $1200 – $2000 per unit.
Capacity: Currently space is available.
Equipment: As previously advised, the shortage of equipment is the main hindrance and driver of ocean rates, with nearly all major carriers experiencing a shortage of equipment in one or another part of China.
Ports: Delays at the West Coast Port of LA are increasing, with numerous vessels at anchor waiting for berths. This is leading to additional transit times.
Asia → Europe (Far East Westbound)
Rates: Rates leading into the 2nd week of 2021 are remaining fairly stable, with little or no increases being reported. Rates are still ranging between $12,000 to $16,000.
Capacity: We are not expecting to have a reduction in capacity in the next 3 weeks. However, it is reported that carriers will attempt to increase reliability after CNY by reducing calls.
Equipment: The shortage of equipment continues to impact all Asian ports. In some cases, carriers are having to sail under capacity as they have been unable to provide the required equipment.
Air Freight Market Update
- The US market situation is that the overall market is pretty stable. We have seen the rate decrease from almost all origins of China and hope this trend will continue for a longer period now that we are past the Christmas peak period. There will be a small peak period before CNY and then a relatively long slack season once airlines start to increase their passenger schedules.
- The market to European destinations (FRA/AMS/LUX etc) has also shown some signals that the rates have begun to decrease recently, and spot rates are also available in the market, especially for dense cargo. Hopefully, we will see a similar trend to the US market. The space situation is also much better now due to less demand in the market this week.
- The UK market is quite different from the US & EU owing to the impact of lockdown caused by COVID-19, Brexit, and limited capacity.
- The rates have stayed the same, but we have also seen some slight increases as space has become quite tight recently. We will look to use air-air service to the UK due to problems with air-truck service from mainland Europe. There might be some delays due to the new customs regulations between the UK and EU now that we have left the EU Customs Union.
- Many airlines canceled some flights to the UK, and some charter services do not have a new schedule to the UK. The rate from PEK has risen this week, and the majority of space is booked until at least the weekend.
- The US export has been anything but easy the last months with fluctuating rates, capacity shortage, and congestion at airports. The real challenge, however, has been on the import side. Handling consignee controlled imports is a task beyond anything ever seen in the industry.
- Airlines – demand exceeds the supply, driving rates up. Tough revenue control “the highest paying freight flies” push lower paying shipments to the end of the line resulting in delays and split shipments.
- Import Terminals – are fighting Covid breakouts and increased volumes. They can be almost impossible to get hold of, with fewer free days and increasing storage fees.
- Trucking Companies – are busier than ever and have little appetite to sit in lines for hours to pick up an air freight shipment. This is making it even harder to get the shipment out of the airport.
- The new year for air cargo has kicked off, with new freighter capacity in the market as the passenger business continues to stumble in the face of the pandemic. This means that schedules are still at reduced levels. Adding freighter capacity will help reduce the pressure a little.
- After grounding its fleet in November, Volga-Dnepr began bringing its AN-124s back into the market. One was back in operation at the end of December, following the completion of technical checks and service directives. Two aircraft are currently flying, with additional aircraft coming back at a pace of 7 to 10 days per aircraft.
- Qatar Airways Cargo took delivery of three 777 freighters on 1 January, bringing its freighter fleet to 30, of which 24 are 777Fs, four are A330Fs, and two 747Fs. The airline said the new aircraft would be put on long-haul scheduled routes, and be open for cargo charters. The added capacity will enable Qatar Airways to support logistics around the Covid-19 vaccination. It had also temporarily converted six of its 777-300ER aircraft to operate cargo-only flights, introducing an additional 137 cubic metres of cargo volume per flight over the lower deck cargo capacity of 156 cubic metres.
European Road Freight Market Update
Traffic is flowing smoothly at the moment. We do see suppliers using Brexit as a good reason to increase rates.
The information that is available in the Weekly Market Update comes from a variety of online sources. Click below to learn more about how Zencargo can help make your supply chain your competitive advantage.