Weekly Market Updates

Zencargo Market Update: 21st November

Nov 21, 2022

Blanks sailings continue to rise as entire lines suspended

Maersk and Zim have recently announced they are suspending the TP23 service from Asia to the USA. The shipping line which runs from Vietnam to the US East Coast is the latest line to be suspended as carriers continue to manage capacity through blank sailings and suspending lines altogether. 

The level of blank sailings and suspended shipping lines has been more notable on the Transpacific lanes than the Asia to Europe trade lane Nearly 50 blank sailings have been announced from Asia to the USA from week 42 through to 52 which is significantly more compared to Asia to Europe with 15 blank sailings. In a market this volatile it is impossible to suggest that this is the beginning of rate stabilisation on Transpacific lanes, however, in recent weeks the level of decline in rates has been much less dramatic in comparison to Asia Europe/UK lanes, where blank sailing has not been as aggressive. 

A correlation could be drawn between the two lanes, suggesting that the more aggressive use of blank sailing between Asia and the USA has been effective in softening the decline in rates. While trade between Asia and the Europe/UK, where blank sailings have not been as widespread, are still experiencing a sharp decline in rates. However, blank sailing not only impacts upon rates but also schedule reliability as global levels have plummeted from pre pandemic levels where carriers were consistently above 70%. Compared with Q3 schedule reliability reported at 44%, representing a drastic decline, in no small part as a result of increased blank sailings. Currently Transpacific trade lags far behind the global average, with reliability to the US West Coast reaching 21.6% and US East Coast lower at 21.2% in September. 

While declining rates may be good news for shippers, it is always important to be aware of the implications and foster good relationships with carriers as well as balancing service levels. 

We are currently offering a free 1:1 strategy rates consultation to support shippers with advice on everything from seasonality trends to different rate options. To secure your spot please click here.

China

Ocean

  • Freight rates to Europe, South America, the middle East, Australia and New Zealand have fallen sharply this week, with more moderate falls to West Coast USA.
    • For US shipping the East Coast rate is more stable than West Coast.
    • US imports from China remain at the same levels as September.
  • Carriers have continued to issue blank sailings. 
    • As mentioned above Maersk/Zim have suspended another line, TP23 Asia to US East Coast.
  • Lockdown as a result of Covid outbreaks and testing are causing some delays to factories and ports in China. 
    • In Fuzhou, Fujian province,  a covid outbreak has forced a few factories to shut down. 
    • In Ningbo, which serves Zhejiang and Jiangxi provinces, Covid testing will now take place every two days so delays are anticipated.

Air

Central China to USA and Europe 

  • From SHA to Europe and the USA  rates have decreased compared with last week as volume has remained low.
  • From NGB to Europe and the USA , rates have decreased this week, with the final rate being provided on a case by case basis. 
  • From NGB to the USA , rates have increased this week, with the final rate being provided on a case by case basis.

North China to USA and Europe 

  • From TSN to Europe, rates have seen a slight decrease compared to last week.
    • Air China, Lufthansa and Singapore airlines can provide spot rates for dense cargo on passenger flights to Europe.
    • Korean Air and Asiana Airlines can provide earlier estimated time of arrivals on their freight flights, with Asiana Airlines providing a competitive rate similar to passenger flights.
  • Similar to Europe, rates from TSN to USA  have seen a slight decrease compared to last week.
    • Japan Airlines, Cathay Pacific and All Nippon Airways can provide spot rates for dense cargo on passenger flights to Europe.
    • Korean Air and Asiana Airlines can provide earlier estimated time of arrivals on their freight flights, with Asiana Airlines providing a competitive rate similar to passenger flights.
  • From PEK to Europe and the USA, rates have seen a slight decrease compared to last week however space still remains tight. 
    • For urgent shipments to Europe we advise providing the cargo ready date, reconfirm rate and book 4 to 5 days in advance. 
    • For flights from PEK to the USA the available carriers include Japan Airlines, All Nippon Airways and Cathay Pacific. 
      • Due to less available services on PEK to the USA,  some airlines are uploading less volume or have cancelled or rescheduled their flights. 
  • From TAO to Europe, rates have remained stable compared to last week.
  • From TAO to the USA, rates have remained the same this week compared to last week.
    • ETD for new bookings is the 24th November.
  • From CKG to Europe rates have remained stable compared with last week , while rates to the USA have seen a slight increase.
    • Qantas is able to provide direct flights to Chicago and special rate direct flight to Los Angeles. 

South China to USA and Europe 

  • From CAN to the USA and Europe rates have remained stable since last week and rates can be negotiated with carriers on a case-by-case basis. 
  • From SZX to Europe and the USA, the market is stable and rates can be negotiated with carriers on a case-by-case basis. 
  • From XMN to Europe and the USA  rates have remained the same compared to last week. Rates can be negotiated with carriers on a case-by-case basis.
India

Ocean

  • Volume has continued to decline this week due to reduced demand and continued impacts of a  long running monsoon season. 
    • Demand is expected to increase in Q1 of 2024 due to the peak season for melon and grape exports. 
      • Rates are expected to rise during this time due to decreased capacity. 
  • Space is generally available on lanes to both the USA and Europe.
  • Carriers are omitting some European port calls and a potential for increased blank sailings as demand is low.
USA

Ocean

  • Import volume of container freights to Port of Los Angeles and Port of Long Beach is currently 26% lower than 2021.
    • This marks the lowest throughput entering the ports since May 2020.
    • Analyst attribute this to excess inventory and poor consumer demand in the run up to Black Friday sales and Christmas.
      • Inventory to sales ratio have reached the highest level in decades forcing importers to reduce shipment volumes from overseas suppliers.
      • US personal consumption expenditure grew at a quarter on quarter annual rate of 1.4%.
  • Port congestion has eased with 68 vessels currently waiting, down from 87 last week.
    • As congestion eases this will free up more capacity in the market. 
Benelux

Ocean

  • The Port of Rotterdam has partially closed the Scheur river until the 25th of November.
    • The closure is due to construction work being done for the Maasdelta Tunnel.
    • Ships have been advised to moderate speed with expected  minor delays on the 25th November as the river will be fully closed for 15 to 20 minutes.
    • The river will be fully closed on the 31st of March and the 15th of April 2023 as construction continues. 
UK

UK 

Ocean

  • Capacity is set to increase from Northern Europe as two new vessels are introduced to Transatlantic trade lane.
    • Analysts have predicted this will put downward pressure on rates. 
    • It is also important however to bear in mind that winter conditions can have adverse impacts on schedules and therefore capacity 
    • Current schedule reliability stands at 34%. 
  • As industrial action was called off last week at the Port of Liverpool, Unite Union has claimed to receive an overall pay increase of 14% – 18% in their recent agreement with Port operators Peel Ports. 

Road

  • The DVSA has announced from April 2023, rolling tyres fitted to steering axles will be classed as a major deficiency during annual tests. 
    • These changes have potential to sideline vehicles as this change to regulations  would see vehicles fail the annual test where previously they could be issued with an advisory.
  • Bristol is launching a clean air zone which will come into effect on Monday 28th November. 
    • Non compliant HGV’s face charges of £100 per day.

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.

November 15th – Austria, Belgium

November 16th – Germany

November 17th – Czech Republic, Slovakia 

November 18th – Croatia, Latvia 

November 30th – Romania

December 1st – Portugal, Romania

December 2nd – Romania

December 3rd – Spain

December 6th – Finland, Spain 

December 8th – Albania, Andorra, Austria, Italy, Liechtenstein, Macedonia, Malta, Monaco, Portugal, San Marino, Spain, Switzerland* 

December 13th – Malta

*Not in all regions

The route ahead

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