Weekly Market Updates

Zencargo Market Update: 18th July

Jul 18, 2022

In focus: Port congestion in Europe is preventing a slump in spot rates

Despite a decrease in consumer demand from Asia, port congestion in North Europe is preventing a slump in spot rates.

Port congestion has reduced capacity as ships are experiencing longer waiting times for berths. According to the Freightos Baltic Index, spot rates have also increased slightly this week by 1% for the US East Coast which has been attributed to the congestion at US East Coast ports.

Please speak to your freight forwarding partners to ensure you secure the best space and rates for your cargo.

China

Ocean

  • Typhoons are disrupting operations at many ports across China.
    • Chinese vessels have been affected by typhoons impacting operations in Ningbo, Shenzhen and Hong Kong.
    • This has caused fewer vessels to berth and berthing times have also increased in Shanghai.
    • This indicates that levels are hitting those seen pre-pandemic.
  • Port congestion is rising due to the typhoons and local lockdowns. 
    • Shanghai launched another mass testing campaign last week in nine out of the 16 districts as there has been another spike in infections. Mass testing is also underway in Guangzhou.
    • It has been estimated that more than 30 cities in China are facing Covid restrictions.

Air

Central China to USA and Europe

  • From SHA to Europe, rates are stable compared to last week. However, many flights have been cancelled to the USA, capacity has become tighter and rates have increased compared to last week. 
  • Rates have slightly decreased from SHA to Europe but have increased to the USA. 

North China to USA and Europe

  • From TSN to Europe and the USA, Korean Air and Asiana Airlines are available for any urgent bookings. The market is stable to the USA and rates are the same as last week. 
  • Space is tight from PEK to Europe and the USA. Air rates have also increased to the USA but remain the same to Europe. 
    • Due to weather conditions, some carriers have cancelled or rescheduled their flights.

South China to USA and Europe

  • From CAN to Europe, please check with your carrier on a case-by-case basis on rates and space. 
  • Rates have decreased this week from SZX to Europe and are stable to the USA.
  • Rates are stable from XMN to Europe and the USA this week.
Bangladesh

Ocean

  • Last week, approximately 3,300 trucks, filled with export cargo, were waiting at the gates in Chittagong to unload goods. 
  • 9,300 TEU export-ready containers are awaiting vessel designation.
  • A seven day truck suspension was imposed to help with the movement of public buses and other vehicles as people left the cities to celebrate Eid ul Azha. 
  • Before the factories shut for the holidays, cargo owners sent all shipments to the depots at once, creating congestion at gates.
USA

Ocean

  • Congestion is building up again at US ports. 
    • On 13th July, 460,000 TEU containers were loaded on vessels waiting off US East Coast Ports. 180,000 TEUs were waiting on vessels off the US West Coast Ports. 
    • At the US West Coast Ports of Los Angeles and Long Beach, rail containers are starting to pile up. 
      • At the Port of LA, 29,000 containers are waiting for a train and the average dwell time is 7.5 days. The ideal wait time should be closer to two days. 

Road and Rail

  • US port congestion is predicted to worsen due to potential rail and truck strikes. 
    • A labour dispute between rails and unions has led to the Biden administration to establish an emergency board on 15th July to prevent a potential strike. 
    • As President Biden has appointed a Presidential Emergency Board, it will have 30 days to make recommendations to settle issues. In that period of time both sides are forbidden to stop work. 
    • Currently, rail dwell is almost four times more compared to January 2022 levels. 
  • Truck drivers in California stage a protest at the Ports of Los Angeles and Long Beach. 
    • Truckers are protesting against the California State Assembly Bill 5 which establishes a three-factor test for carriers to determine whether workers are independent contractors or employees. 
    • Approximately 70,000 truckers are owner-operators and at risk of losing their ability to work in California under this bill.
    • This would include two-thirds to California’s truckers, which could significantly disrupt supply chains. 
Benelux

Ocean

  • Congestion continues at Antwerp and Rotterdam. 
    • Rotterdam terminal is facing long dwell times and limited yard storage.
    • Waiting times and terminal productivity remains at fair levels at Antwerp. However, yard density remains high across North Europe.
    • Covid infections combined with school holidays have reduced labour resources. 
    • Off-yard storage at Rotterdam is fully utilised due to Russian cargo that has been restricted by customs sanctions.

Ocean

  • Strikes at German ports continue as the latest round of negotiations fell through
    • From 06:00, 14th July to 06:00, 16th July, a 48 hour strike was called which saw 12,000 workers strike at the Ports of Hamburg, Bremerhaven and Wilhelmshaven in Germany.
    • This is the third round of industrial action taken by German dockworkers. Last month, the trade union called two strikes. 
    • Germany is a critical hub in Europe and the strikes have further impacted the congestion crisis at European ports. 
UK and Rest of Europe

Road/Rail

  • The Department for Transport has issued guidance on the implementation of Operation Brock on the M20 ahead of the summer holidays. 
    • Drivers are being warned to plan ahead due to Operation Brock and the heatwave. 
    • As part of this operation, a contraflow is in place on the M20 to keep traffic moving on the motorway when there is disruption to travel across the English Channel.
    • The DfT has also issued enforcement teams to intercept drivers who try to bypass the queues by using other roads. 

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.

July 21st – Belgium

July 25th – Spain*

July 28th – Spain*

 

August 1st – Ireland

August 5th – Croatia, Spain*

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

 

*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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