Weekly Market Updates

Zencargo Market Update: 9th May

May 09, 2022

In focus: The lockdown in Shanghai has cost global trade $28bn

China’s zero-Covid policy has led to Shanghai’s factory production to pause over the past several weeks. The clothing, textiles and automotive industries have been impacted the most. 

It has impacted the clothing industry at an estimated $884m, the textile industry at $717m and cars and people carriers at $747m. 

This will damage western economies, especially those who are suffering from high inflationary economies such as the UK and the US. Further supply chain disruptions could continue to push up prices and impact these economies further. 

Businesses must plan around these disruptions; if you’re looking for ideas on how, take a look at this guide on the lockdowns in China.

China

Ocean

  • Ocean carrier alliances are planning for more blank sailings from Asia in response to the Covid lockdowns in China.
    • The Covid lockdowns have affected factory production and therefore there has been a reduction in export freight. 
    • According to data from Project44, between weeks 17 to 32:
      • The Alliance will blank 33% of its sailings from Asia
      • The Ocean Alliance will blank 37% of its scheduled sailings 
      • The 2M will cancel 39% of its sailings 
  • China is home to some of the world’s largest container ports. 
    • The number of vessels waiting at the Port of Shanghai increased to 384 by 25th April. This was an increase of 27% compared to the previous month. 
    • Trucking shortages have also increased the number of containers sitting at the port. 
      • Containers were sat for as long as 15 days at the port before being picked up by truckers during the lockdown period. 
      • This was an increase from 5 days when the restrictions were first imposed. 

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. 
    • The whole city has been locked down and residents are required to do mandatory PCR tests once a day. 
    • Rates should be quoted on a case-by-case basis.
  • Rates from NGB Airport to Europe have remained the same this week. Rates have decreased this week from NGB to the USA. 
    • Final rates depend on a case-by-case basis. 

North China to USA and Europe

  • The space in the air market from TSN Airport is tight as many factories have resumed production in the area.
    • Rates are expected to rise from TSN to both Europe and the USA.
  • From PEK Airport, to the USA and Europe, space is tight and flight schedules are not stable.
    • Some areas in Beijing have been placed in lockdown due to a rise in Covid infections.
    • 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 are the same as last week. 
    • CAN Airport terminals are busy and some flights have been cancelled. 
  • 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. 
USA

Ocean

  • Labour negotiations are to begin this week at the US West Coast ports between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA). 
    • THE ILWU represents nearly 14,000 port workers in California, Oregon and Washington state. 
    • The PMA represents employers of the shipping industry on the Pacific Coast. 
    • The negotiations will discuss labour contracts and wages of port workers on the West Coast. 
    • Aside from contracts and wages, automation and its impact on jobs will also be a key subject in the talks. 
Benelux

Ocean

  • Belgian-based ports, Antwerp and Zeebrugge, have agreed to merge which will see them manage a throughput of 278 million tonnes a year together. 
    • The merged port will be called Port of Antwerp-Bruges and will create Europe’s largest export port. 
    • The unification will focus on the development of optimising the two ports’ interconnectivity. 
    • They will also focus on social and technological developments and work with its customers to reduce emissions.
United Kingdom

Ocean

  • UK ports have asked for compensation from the government for delaying the implementation of post-Brexit border checks by 18 months.
    • Government delays on checks on European animals and plants announced last week means that multimillion pound high-tech facilities could be left empty until the end of 2023, costing the industry around £300m.

Road/Rail

  • Extended UK cabotage ends.
    • The temporary relaxation of the UK cabotage rules that has allowed non-UK lorry operators to undertake unlimited cabotage in the UK for 14 days lapsed on the 1st May 2022.
    • This means that EU lorries entering the UK will be restricted to a maximum of two cabotage trips in 7 days after delivery of an inbound international load.
    • Non-EU lorries entering the UK will no longer be permitted to undertake cabotage in the UK.
    • The Government still retains the ability to re-introduce a relaxation in 2022 – subject to parliamentary processes – if it deems there is a need to support UK domestic road haulage capacity.
  • Green fleet aspirations now a higher priority than safety and cost savings, according to Webfleet study
    • Sustainability and carbon reduction is now the number one business priority for almost half of UK commercial fleets (45%), according to new research from mobility solutions specialists Bridgestone and Webfleet Solutions.
    • The need to decarbonise topped both the digital transformation of fleet processes (cited by 42% of decision-makers) and driver safety (37%), with the same number prioritising cost reduction.
    • Despite their net zero commitment, however, the study among 300 fleet decision-makers revealed they believe it will be more than eight years before their fleets are fully carbon neutral – 7.5 years for HGV operators and 8.7 years for van fleets.
    • 43% of HGV operators plan to invest in alternative fuel vehicles over the next 12 months, while 36% of van fleets plan to introduce electric vehicles (EVs). Almost two in five fleets (39%) will purchase energy-efficient tyres.
  • Rules to change for operating Light Goods Vehicles in the EU.
    • New EU rules mean that transport companies and couriers will need an International Operators’ Licence when using light goods vehicles.
    • This includes vans, light goods vehicles as well as vans or cars towing trailers.

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 9th – BA, BY, LU, MD, RU, UA

May 10th – BA*

May 13th – DK

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

*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 won teams. Click below to learn more about how Zencargo can help make your supply chain your competitive advantage.

Get In Touch