Weekly Market Updates

Zencargo Market Update: 16th May

May 16, 2022

In focus: In 2021, the air freight market grew twice as fast as the ocean market

In 2021, the global freight forwarding market experienced a 11.2% increase to a total of $284.9bn.

Air freight grew by 14.9% to $128.2bn whereas sea freight grew by 6.6% to $156.5bn.

This means that air freight increased at double the rate of sea freight.

A combination of a shortage of carrier space, port congestion and rate increases on the ocean market has contributed to this shift.  The price difference between air and ocean has narrowed over the past year. Therefore, switching to air freight does not seem as costly as it used to be.

 

China

Ocean

  • From 20th May, restrictions will begin to ease in Shanghai.
    • Most of the city has been living in lockdown since late March.
    • Ports in Europe and the US have been warned to brace the impact of Shanghai’s reopening as imports will now start to flood in from China. 
    • Port operations may take four to eight weeks to resume to normal in Shanghai.
  • For more information on how you can prepare, read this deep dive on the lockdowns in China.

Air

Central China to USA and Europe

  • Shanghai is still in lockdown. Businesses should coordinate with their freight forwarding partners about whether this affects their shipments. 
    • Rates should be quoted on a case-by-case basis.
  • Rates from NGB Airport to Europe and the USA have decreased this week.
    • Final rates depend on a case-by-case basis.

North China to USA and Europe

  • From TSN to the USA, the air market is stable and the rates are the same as last week. Flight frequency is not stable for All Nippon Airways, Japan Airlines and American Airlines. 
  • If you require urgent bookings, Korean Airlines and Asiana Airlines are the better options. Please check on a case-by-case basis. 
  • Rates remain the same level as last week from PEK to Europe and the USA.
    • The space in the air market is tight.
    • Some areas in Beijing have been placed in lockdown, including the airport areas due to a rise in Covid infections.
    • Terminal operation times have increased. 
    • This has limited trucking services due to restrictions that have been put in place to prevent the spread. 
  • Please work with your freight forwarding partners to reconfirm rates and space in advance. 

South China to USA and Europe

  • From CAN Airport to both destinations, rates have increased as some airlines have cancelled their flights. 
  • From SZX Airport, the market and rates remain stable.
  • From XMN Airport, rates are also stable this week. 
  • All shipments need to be checked on a case-by-case basis. 
India

Ocean

  • Rail improvements will help shippers move their cargo faster at India’s Jawaharlal Nehru Port Authority (JNPA)/Nhava Sheva Port.
    • The Dedicated Freight Corridor (DFC) is expected to connect Nhava Sheva terminals by the end of the year. 
    • The JNPA has opened a common rail yard for all terminals at the harbour to help with loading and unloading of containers. 
    • This rail improvement can help with train speed and operations which have been pain points for container rail companies. The bottlenecks from this has forced customers to rely more on trucking services.
USA

Ocean

  • The US is seeing a coastal shift in imports from the West Coast to the East Coast
    • The ILWU negotiations on the West Coast have prompted shippers to shift from the West Coast to East Coast ports. 
    • In April 2022, container imports at the Port of Los Angeles was 459,918 TEU, a decrease of 6.2% compared to April 2021.
    • Container imports at Long Beach increased to 400,803 TEU, an increase of 9.2% year-on-year.
    • Last month, New York saw a spike of 22.4% in import volumes to 439,767 TEU, Savannah saw an increase in imports of 11% year-on-year to 262,586 and Charleson saw a significant increase of 34% to 140,730 TEU. 
    • In total, the US East Coast Ports experienced an increase of imports of 18.7% year-on-year at 1,148,687 TEU in April. 
    • On the other hand, the US West Coast container imports totalled to 1,041,057 TEU, a decrease of 3.4% year-on-year. 
    • This is the 11th straight month that the US East Coast has outperformed the US West Coast based on year-on-year percentage change. 
Benelux

Ocean

  • Europe’s inland services may experience impact when Shanghai’s lockdown ends
    • The terminals may be overrun with containers arriving from Shanghai which have been held up at ports due to the lockdown. 
    • Congestion is currently affecting Antwerp and Rotterdam and the influx in containers will contribute to the disruption. 
    • However, congestion is easing slightly. The wait time into Rotterdam is currently 57 hours, compared to 99 hours a week earlier. 
United Kingdom

Air

  • German carrier, Lufthansa, has ordered 10 more 777 freighters to boost its cargo capacity.
    • The company has ordered three current generation 777Fs and seven 777-8Fs.
    • The investment shows the company’s belief that cargo is a strong part of the business. 
    • This move allows Lufthansa to offer customers more capacity in both the short and long term. 

Road/Rail

  • Diesel fuel costs have risen at the pumps
    • The price of diesel was declining marginally in recent weeks, however, this has now reversed and has increased on previous levels. 
    • Uncertainty in global markets and a weakening exchange rate could lead to price increases in the near future.
    • Wholesale oil prices at the end of April were slightly higher than at the start of the month. However, the pound’s value slipped against the dollar, in which fuel is traded, meaning costs for UK retailers have risen. 
    • The resulting high prices are continuing to put a strain on the haulage sector, causing an increase in freight rates.
  • Brittany Ferries are launching a rail freight motorway service in 2024. 
    • The motorway service will be designed for unaccompanied trailers running between Cherbourg and Bayonne.
    • The 1000km distance service will run year round and will be operated by two trains and the hope will be to link up with the freight markets in the UK, Ireland and Spain. 
  • The UK Government plans to axe EU rules on new drivers. 
  • If the UK Government plans are successful, teenagers who have recently passed their driving licence exam will be able to apply to operate lorries, large vans and minibuses. 
  • The UK has endured a deficit of delivery drivers post-Brexit, therefore by axing the EU rule on new drivers could help with the shortages. 
  • Britain’s shortage of lorry drivers is estimated to be up to 100,000.

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.

May 17th – NO

May 19th – TR

May 21st – ME

May 22nd – ME

May 24th – BG

May 26th – AT, AD, BE, CH, DK, FR, FI, FL, NO, NL, SE

May 30th – GB, HR

 

June 1st – MD, RO

June 2nd – DE, GB, IT

June 3rd – GB

June 5th – DE, DK, EE, FI, NO, NL, SE, SI

June 6th – AT, AD, BE, CH, DE, DK, FR, FL, HU, IE, LU, NO, NL, SE

June 7th – CH*

June 8th – DE

June 10th – PT

June 12th – RO, RU

June 13th – GR, RO, RU, UA

June 16th – AT, DE, FL, HR, PT, PL

June 22nd – HR

June 23rd – EE, LU, LV

June 24th – EE, LT, LV

June 25th – FI, HR, SE, SI

June 28th – UA

June 29th – CH

*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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