Weekly Market Updates

Zencargo Market Update: 15th August

Aug 15, 2022

In focus: Strike action at the Port of Felixstowe is likely to go ahead

Felixstowe is the UK’s largest container port, handling about four million TEU worth of cargo per year. The strike action at the Port of Felixstowe will bring shortages in the UK’s supply chain.  

Felixstowe accommodates more ultra large container vessels than Southampton and London Gateway combined. However, both of the latter ports have berths that can accommodate these vessels. 

The strike at Felixstowe could create new opportunities for neighbouring ports as carriers are working on appropriate contingency plans that may potentially see the diversion of vessels to other ports. 

Want to find out more? Check out Zencargo’s latest updates on the Port of Felixstowe.

 

China

Ocean

  • Container spot rates are falling on all export routes from China during a period where peak season for demand is normally expected.
    • Both short-term and long-term contract rates are experiencing downward pressure as there’s been an easing of demand. 
    • Ocean carriers will look towards blanking sailings to level up supply and demand on routes that show the weakest booking trends. 

Air

Central China to USA and Europe 

  • From SHA to Europe, rates have increased except to France. Flights have been cancelled from SHA to Los Angeles International Airport and Chicago O’Hare International Airport.
  • Rates have increased on both the East Coast and West Coast to the USA.
  • From NGB to Europe and the USA, the market is stable and the rate has dropped slightly compared to the week before.

North China to USA and Europe 

  • Hot weather continues to affect loading capacity at TSN in August. Rates remain the same as last week to the USA. 
    • Korean Airlines and Asiana Airlines can provide space for any urgent bookings from TSN airport.
    • Rates with the two airlines are higher than other passenger flights. 
    • Terminal warehouses are running on low efficiency due to the Covid-19 outbreak in the Tianjin area. 
  • Due to hot weather conditions and rain, some carriers have cancelled, rescheduled or taken on less volume from PEK to both lanes. Therefore, flight schedules are not reliable at the moment. 
    • Air China’s direct service from PEK to LHR is still waiting to be reopened. However, other indirect services are available from PEK to LHR. 
    • Rates have remained unchanged this week to both lanes, however capacity is tight. 

South China to USA and Europe 

  • From CAN to Europe and the USA, rates have decreased to both destinations as the market is quieter. 
  • From SZX to Europe and the USA, rates are stable. 
  • From XMN to Europe and the USA, rates are stable this week. 
USA

Ocean

  • Major ports on the US East Coast and Gulf Coast are facing high levels of congestion. 
    • There are 80 containerships waiting at anchorage on the US East and Gulf Coasts. 
    • The U.S. Transportation Department (USDOT) announced that a supply chain pilot data-sharing project aimed at easing congestion at US ports has begun exchanging data and doubled in size. 
    • This project was announced in March with truckers, shippers, wholesalers, retailers and ports to develop a digital tool that gives companies information on areas in the supply chain. 
    • Congestion may also ease at US ports as there are predictions for lower volumes over the remainder of the year. 
Germany

Ocean

  • The Rhine River in Germany fell to a new low on Friday due to drought.
    • The river fell below 40 centimetres last Friday and it is likely to fall further over the next few days.The Rhine is used to ship vital commodities such as fuels and grains.
    • The trade of 400,000 barrels a day of oil products could be disrupted and landlocked countries in central and eastern Europe rely on fuel via the Rhine.
    • Container company, Contargo, said that a drop below 40 centimetres would mean that they will halt barge services on the Rhine River. 
    • With water levels below 50cm, Contargo has already brought in low water surcharges of €589 per 20ft box and €775 per 40ft.
    • This is because larger vessels will no longer be able to pass that point due to low level waters. 
    • Barge operations are working at just 20-30% of capacity resulting in a  backlog. 

Road

  • As droughts have reduced water levels in rivers across Germany, trucking services may be looked at as an alternative. 
    • Barges travelling through inland waterways are experiencing delays due to low levels of water.
    • Rail capacity is also full and it is not geared to take on all the shipments scheduled to go through the Rhine River. 
    • There hasn’t been an increase in demand yet for trucking services but if this continues into September, there could be an increase in demand for trucks to move goods across the country. 
Benelux

Ocean

  • The Port of Antwerp-Bruges are installing temporary pumps to maintain the supply of water in the Albert Canal.
    • The ongoing drought has left the water levels of the River Meuse at an all-time low. 
    • The Albert Canal takes its water supply from the River Meuse but due to the drought, pumps are being installed as it is a vital shipping route to and from the Port of Antwerp-Bruges. 
UK and Rest of Europe

Road/Rail

  • Prices for diesel have dropped by the largest margin in 2022 at the start of August. 
    • However, the overall 188.49 pence per litre (ppl) is still 50ppl higher compared to the same period last year. 
    • According to the latest set of fuel prices, diesel fell by 4.5ppl and unleaded by 5.1ppl.
    • However, prices have fallen back to June levels, and this is still significantly higher than levels in early 2022. Prior to the Ukraine/Russia conflict, diesel was 158ppl.
  • Hauliers will be affected by the likely strike action at the Port of Felixstowe.
    • Hauliers who are contracted to collect from Felixstowe will have to seek guidance and conditions at the port to navigate disruptions from the strike. 
    • Traders will need to liaise with hauliers to inform them if freight has arrived at the port or been diverted. 
    • If containers have arrived at the port, there may be delays in collection. 

European Bank Holidays

We anticipate a shortage of availability and the occurrence of delays around the bank holiday periods. Plan ahead and allow extra time for your products to be delivered.

August 15th – Austria, Belgium, Croatia, Cyprus, France, Germany*, Greece, Italy, Lithuania, Luxembourg, Malta, Poland, Portugal, Romania, Slovenia, Spain

August 20th – Estonia, Hungary

August 29th – Slovakia

 

September 1st – Slovakia

September 2nd – Spain*

September 5th – Luxembourg*

September 6th – Bulgaria, Spain*

September 8th – Malta, Spain*

September 15th – Slovakia, Spain*

September 17th – Spain*

September 20th – Germany*

September 21st – Malta 

September 22nd – Bulgaria 

 

*Not in all regions

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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