Zencargo Market Update: 5th December

China

Ocean

• Rates have continued to fall on Transpacific and Transatlantic trade, although at less severely than witnessed in previous weeks.
  • This could be attributed to the continued blank sailings as well as a slight increase in overall demand due mainly to volumes on Intra Asia and Far East  Europe trade. 
    • On the Asia to North Europe route, 6% of capacity is set to be blanked in January (vs 15% in December).
    • On the Transpacific trade to the US West Coast, 7% of capacity is set to be blanked in January (vs 18% in December).
• Vessel utilisation from the Far East to Europe has also increased this week.
  • This is the result of shippers concentrating bookings ahead of Christmas and New Years holidays as well as advancing cargo before Chinese New Year  begins on the 22nd of January. 
  • Speculation still remains as to whether this is the beginning of a credible and consistent uptick in demand. 
• The impacts of Covid restrictions and testing has intensified over the past week especially in Tianjin. 
  • There is widespread and regular testing in Tianjin which is delaying shipments as workers responsible for packing cargo are forced to quarantine.
  • Truck drivers responsible for transporting cargo to ports are also required to submit a 24 hour covid test which is causing delays due to processing time. 
  • It is also expected that Chinese New Year will result in more delays than usual due to the covid testing procedure required for workers to travel resulting in delays returning to work or extended leave periods. 

Air

Central China to USA and Europe 

• From SHA to Europe,  rates have decreased slightly compared with last week.
• From SHA to the USA,  rates have increased compared to last week, especially to the West Coast.
• From NGB to Europe , 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 continue to fluctuate and have seen a slight decrease compared to last week. Rates are much lower than at the same time in 2021.
  • 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.
  • We recommend booking 3-4 days in advance.
• Similar to Europe, rates from TSN to USA continue to fluctuate and  have seen a slight decrease compared to last week.  Rates are much lower than at the same time in 2021.
  • 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.
  • We recommend booking 5-6 days in advance. 
• 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 3 to 4 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 loading less volume or have cancelled or rescheduled their flights. 
• From TAO to Europe, rates have remained stable and similar to last week.
  • ETD for new bookings is the 8th December.
• From TAO to the USA, rates have remained stable and similar to last week.
  • ETD for new bookings is the 7th December.
• From CKG to Europe rates have remained stable and similar to last week , while rates to the USA have seen a slight increase.
  • Qantas is able to provide direct flights to Chicago and special rates on direct flights 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. 
  • Space is still tight however as we enter the last few weeks of the year. 
• 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. 
  • Rates are expected to increase to USA from the 8th December.

USA

Ocean

• Port congestion at the Port of LA and Port of New York has returned to pre pandemic levels.
  • Following unprecedented congestion earlier in the year due to a surge in demand, both the Port of LA and New York have only a few vessels waiting. 
  • However, the Port of Savannah and the Port of  Houston are still experiencing some congestion with 31  and 11 vessels waiting respectively. 
• Rates have continued to fall from Asia to the US with  the West Coast showing more moderate falls than the East Coast.
• New capacity is entering the Transatlantic trade with an approximate increase of 4000 TEUs per week between the US and Europe. 
  • The new capacity is expected to push rates down. 

Land 

• A legal rail strike has been averted as President Joe Biden signed a legislation that requires unions and railroads to adopt the contract negotiated earlier in September.
  • Without intervention from the President, members of 4 railway unions had the potential to go  on strike as early as 9th December.
  • The strike would have had devastating consequences for shippers as US supply chains would have been crippled. 
  • While illegal strike action is still a possibility – railroad operators would now legally be able to replace striking workers or seek for the courts to compel strikers back to work.

Benelux

Ocean

• Ports across the Benelux region have registered a decrease in container handling for the first 9 months of 2022. 
  • Compared with 2021 the Port of Hamburg saw a 2.9% decrease, handling just under 64.5 million tons.
  • Comparatively the Port of  Rotterdam and the Port of Antwerp-Zeebrugge saw 2.2% and 5% decreases respectively in container volumes. 
  • These figures reflect the current global drop in demand year on year.

UK

UK 

Ocean

• A recent report from FourKites has revealed the volume shifts in UK ports during strike action 
  • The data shows a fall in volume in the weeks preceding the strike action as well as during the period of strike action itself:
    • At the Port of Liverpool from the 11th to the 18th September, one week prior to the impending strike action, shipments decreased by 58%. 
    • At the Port of Felixstowe, shipments decreased by 65%, week on week, during the second strike. 
    • During the industrial action,  ports such as Southampton saw a 25% week-on-week increase in volume as shipments were diverted to alternative ports, away from the disruption..
  • This reflects shippers’ wariness of ports that  are in the midst of industrial disputes, due to the delays which are  inevitably caused.
    • Evidence of the delays caused can be seen through the dwell time at the Port of Felixstowe which increased by 134% to 8.9 days at the beginning of October following the second strike.

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.

December 6th – Finland, Spain 

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

December 13th – Malta

December 24th –  Austria*, Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Luxembourg, Slovakia, Sweden

December 25th – Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden

December 26th – Austria, Belgium*, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France*, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Romania, Slovakia, Slovenia, Spain*, Sweden

*Not in all regions