Ocean Freight Market Update
Asia → North America (Transpacific Eastbound)
Rates: No further GRI’s have been announced in the market, so rates will remain stable through November into early December. However equipment / space guarantees are being applied which in some cases can be as much as $1750 per FEU.
Capacity: No significant tonnage has been added to the Trade so space particularly in SPRC remains critical.
Notes: Congestion issues in the Los Angeles / Long Beach Port facility continue to worsen. It’s now reported 10,000 containers are marooned due to a shortage of Chassisis, reduced working crews, and the reduction of dual jobs, i.e. truckers being able to drop and re-load. This problem is now being felt at the rail head as turnaround time increases.
Asia → Europe (Far East Westbound)
Rates: Are now being adjusted on a fortnightly basis, with some carriers looking at this on a weekly basis. After the 15th November, rates started to touch $4,000 per HQ All in, and are expected to push in excess of $5,000 by December 1st.
Capacity: Capacity remains extremely tight and equipment continues to be a major issue, with carriers requesting substitution of 40HC with 40GP or Non Operating Reefers to alleviate the shortages.
Notes: We have seen no real improvement in the UK terminal situation. For the time being, it appears that although extremely stretched, London Gateway and Southampton are still operational. However, reports of vessels being forced to cut and run will be a major cause for concern leading into Christmas.
Container Haulage is also a major concern as Hauliers struggle to position the equipment in the correct ports to match demand.
Air Freight Market Update
- Air freight rates continued to be stable this week and there are also signs that they may be decreasing slightly with some major airlines like CA/CK/CA slightly reducing current market rates.
- Space situation has also started to become better than the previous weeks but is expected to become a little more difficult again as we head towards the Christmas period and last minute orders are required.
- The main reason that space availability has become better is because products like the iPhone 12, PS5, Huawei Mate etc. are not taking up as much space which has opened up space from some of the major origins in China.
- We are now also seeing some very good spot rates in the market for dense cargo.
- Rates and space continues to be a problem from other Asian destinations i.e. Taiwan, Malaysia and Korea.
- Not much has changed with the Americas market from week to week.
- Rates to almost all South American destinations are still continuing to increase as space is a big problem at the moment.
- The air cargo industry continues to adapt to weekly changes in capacity and schedules as demand rises in the lead up to what many believe will be a historical peak season.
- As Europe battles to contain the surge in Covid-19 cases, the US also reached a new high in daily infections last week. With a silver bullet to beat Covid-19 unlikely, the outbreaks will continue to determine the reintroduction of airline schedules as country border restrictions and government regulations are changed, imposed or relaxed.
- Industry sources OAG & IATA have both reported that scheduled international flights planned for the remainder of the year are still well short of 2019 levels. This is a critical metric as the majority of air cargo is traditionally carried within scheduled passenger flights. Establishment of travel corridors or bilateral agreements will influence air cargo schedules and trade lane capacity significantly moving forward.
European Road Freight Market Update:
- Demand for European equipment will continue to increase in the coming weeks due to Black Friday, Christmas build up and Brexit stock preparations.
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.