Weekly Market Updates

Zencargo Market Update: 3rd October

Oct 03, 2022

Transpacific routes on the chopping block

Blanked sailings have long been an established method for carriers to control capacity on rates. Many will remember the large-scale route cancellations from the early days of the pandemic as demand dropped in the locked-down West. In recent months carriers have been blanking more sailings in response to lower demand, but it seems that more drastic measures are now being taken.

2M, Maesrk and CMA CGM have all announced suspensions of entire service lines this week, merging them with other services, or removing them altogether. Meanwhile FedEx has also announced a reduction in flights and cargo capacity, as large US retailers.

In contrast with blanking sailings of a particular vessel, these are long term steps – one MSC service that has been suspended has been operating since 2016. While it remains to be seen whether these reductions will slow the drop in rates, it is likely that we will see further consolidation towards peak season as carriers seek to manage capacity.

While shippers may currently be enjoying the lower rates, this also highlights the need to balance service levels and maintain carrier relationships – saving money is all well and good until the moment you can’t move an urgent shipment.

As carriers turn a long term eye to their strategy, shippers must do the same. Forecasting ahead gives your business more time to compare options, routes and modes while also planning your rate strategy.

We’ll be discussing rates, tenders, negotiations and more at our upcoming free virtual event Navigate on Thursday 6th October. Book your space now to hear from the experts and get the insight you need.

China

Ocean

  • In good news for shippers, reliability continues to climb. Schedule reliability for Asia-North Europe hit 30.5%, driven by improvements from the 2M alliance with MSC on the lead at 45% improvement. On the Mediterranean routes, schedule reliability sits at 33.7%.
    • Average late days are 9.41 to North Europe and 4.98 to the Mediterranean.
  • Long-term contracted rates finally caught up with spot market fluctuations, with Xeneta noting a 1.1% drop in September, marking the first fall since January and only the third decline in the past 21 months.
    • Asia-North Europe spot rates fell 10% on the Drewry index, with rates to the Mediterranean down 19%. Container utilisation rates were noted to be poor, ahead of Golden Week.

Air

Central China to USA and Europe 

  • From SHA to both the USA and Europe, space is tight between 1st-7th October, due to Golden Week. Rates are likely to decrease during the 2nd half of the holiday. 
    • Rates will continue to decrease after 8th October.
  • From NGB to Europe, rates have remained the same and the market is stable

North China to USA and Europe 

  • From TSN to Europe, rates have decreased. However, rates have remained the same between TSN and the USA as compared to last week. 
    • Capacity is not as tight as expected and airlines are offering competitive rates to attract more bookings. 
  • Rates have decreased from PEK to Europe and the USA. Space is still tight to both lanes. 
  • Due to hot weather and rain, carriers are taking on less volume and have even cancelled or rescheduled flights

South China to USA and Europe 

  • From CAN to Europe and the USA, the market is busy due to Golden Week and airlines have increased their rates for this week. 
  • From SZX to Europe and the USA, rates have again increased to both trade lanes due to China’s national holiday. 
  • From XMN to Europe and the USA, flights may be cancelled due to the national holiday. Rates remain the same as last week on both trade lanes.
USA

Ocean

  • Europe-US rates have been holding steady, unlike other major East/West lanes.
    • The OCEAN Alliance members are preparing further ship swaps to upgrade their joint North Europe – US East Coast ‘TAT2. From mid-October, the ‘TAT2’ will turn in six weeks with 6 8,500 – 13,100 TEU ships.
  • Multiple carriers are reorganising their transpacific services in line with reduced demand:
    • Effective September-October 2022, 2M will revise their Transpacific service portfolio, by suspending the TP3/Sequoia and merging it into the TP2/Jaguar service. 
    • Maersk is suspending the TP28-service and merging it into the TP20-service, accounting for eleven vessels with an average capacity of 4,600 TEU.
    • Effective September 2022, CMA CGM will terminate the GGB-service, which connects Asia to North America West Coast,  accounting for seven vessels with an average vessel capacity of 8,500 TEU.
  • Blanked sailings expected to be around 25% for Golden Week.
  • Despite ongoing ILWU labour negotiations entering their fourth month, productivity at Oakland and Seattle-Tacoma ports remains on track.
  • Major U.S. railroads and unions representing 115,000 workers reached a tentative deal last week and averted a potential strike that could have stalled almost 30% of U.S. cargo shipments, though the deal is yet to be ratified.
Benelux

Ocean

  • Yard utilisation is at ECT and RWG remains high and may lead to some operational restrictions.
    • While ECT is seeing improvement in the long dwell times for T/S and export cargo, import dwell times are still very high.
    • RWG is still not accepting delivery of empty containers until further notice as a yard protection measure and the current empty stack situation is impacting vessel operations and waiting times.
  • APM Terminals has reportedly postponed the final decision on the expansion of its APMT-MV2 terminal at Rotterdam from the third quarter of 2022 to the end of the year.
  • The overloaded rail hub in Antwerp is currently not able to handle all trains, reducing capacity from Germany and France.
UK and Rest of Europe

Ocean

  • Liverpool port workers are set to stage an additional week-long strike this month, starting October 11th.
  • UK charter operator Allseas is in talks to shrink its charter fleet, focusing on freeing their vessel, the 1,878-TEU Allseas Pioneer, which has been stuck in Rotterdam since August.

Road/Rail

  • Further strike action is due to take place on the 5th and 8th of October.

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.

October 3rd – Germany

October 5th – Portugal

October 10th – Austria

October 12th – Spain

October 23rd – Hungary

October 26th – Austria

October 28th – Cyprus, Czech Republic, Greece

October 31st – Germany*, Hungary, Ireland, Slovenia

*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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