Ocean Freight Market Update
Asia → North America (Transpacific Eastbound)
Rates: Again no GRI’s have been announced by the carriers, therefore FAK Rates remain stable. However the amount charged for premium service, i.e. space and container continues to push the rates to well above those indicated on the FAK market.
Capacity: Container shortages continue to cause increasing strain on supply chains across all trades.
Notes: Delays at the West Coast ports of Los Angeles and Long Beach continue, with reports indicating that 14 vessels were awaiting a berth earlier in the week, causing delays in schedules. This is also starting to have an effect on ports such as Oakland & Seattle.
Asia → Europe (Far East Westbound)
Rates: Reports that rates would pass $5,000 per FEU by December look badly dated as urgent cargo sailing in November is now quoted at $5,500, and FAK rates for December reported to range between $6,000 – $6,500 until the 14th.
Capacity: Carriers are continuing with blank sailings, which is difficult to comprehend, as they are also reporting to be fully booked in terms of space through the 1st week of December. Urgent cargo can find space at premium rate levels.
Notes: Equipment shortages are now starting to affect the Traditional Backhaul trade lanes as carriers look to priorities empties over low paying laden containers, such is the acute shortage in Asia.
Other Trade Information:
- Rate Levels on the Asia to Latin America Trade are reaching record highs at close to $5,000 per Teu.
- Rates on the India to UK Market remain strong on the back of a shortage of equipment and space.
- It has been reported that the most profitable trade per nautical mile is the Shanghai to Melbourne Lane, such has the increase in rates on this and the Latin America Trade, that the Transpacific has been pushed to No3.
Air Freight Market Update
- Air Freight rates have stayed relatively stable for most Chinese origins this week, except for PVG and NGB which have seen an increase in rates to some European destinations. Space situation is still at a fairly critical level from most Chinese origins.
- There are some airlines who are still looking to provide some good spot rates, one of those being Air China (CA) but these rates are only available for good dense cargo.
- Main reasons for the market continuing to be at a high rate is we are now in the peak season and many EU /UK importers are looking to switch from ocean to air due to the space and rate issues that China is having with ocean freight shipments.
- No real changes with the US market as the situation remains the same from last week.
- The market is still seeing rates continue to increase to / from many South American countries due to lack of capacity.
- Loads factors increased in Europe by 1.5% from the previous week, up to 47%
- The yield has stabilized over recent weeks and some good spot rates are still available, but with the pressure being put on the air freight market by distressed ocean freight shipments space as we head toward the Christmas holiday period could become a little more difficult to secure.
- While not to be forgotten in the background, the planning is already underway as the industry embarks on an ambitious program to supply the Covid-19 vaccine distribution (when ready). Depending on the source you read, there are various estimates on the amount of predicted capacity required at this early stage (IATA estimates transporting doses to the global population could potentially require the equivalent of 8,000 x 747 freighters). As we await notification of a vaccine trial being successful, one thing is for sure, that this will not be a short term rush. We can expect that this product distribution alone will influence the air cargo market for several years to come across all geographies.
European Road Freight Market Update:
Demand for European equipment will continue to increase in the coming weeks due to the 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.