Transport Update 16th June 2021

Welcome to the Zencargo weekly freight market update – the latest news from our freight and procurement teams on the real experience of shippers.

This week: Yantian pushes further rate increases

• Ocean

• Air

• Road

Ocean

Asia → North America

Rates

• Rates to the West Coast are currently in the range of $10,000, exacerbated by the situation in Yantian.

Capacity

• High rates are bringing in new players, slightly increasing capacity in the market:
  • BAL Container lines, China United Container Lines, Madsen, One High have all introduced or expanded transpacific services.
• Long Beach reported record volumes for the eleventh straight month.
• Yantian disruption continues to reduce calls:
  • Hapag-Lloyd has reported 11 affected called
  • ONE reports 20 calls impacted
• Everything until the end of June is likely to be impacted.

Equipment:

• We are still facing chassis shortages, including a severe lack of of chassis in the LA and Long Beach areas.

Ports

• We hare seeing severe delays in West Coast port operations
  • 3 – 6 days wait for berthing in Long Beach & LA
  • 8-10 days berthing delay in Seattle
  • 15-20 days to berth in Oakland

Asia → Europe (Far East Westbound)

Rates

• Rates to the UK range from $12,285 to $15,000+
• Rates to major mainland ports range from $10,900 to $13,000.
• From the Indian subcontinent, Hapag-Lloyd has announced a new rate increase of $200/ container from July.

Capacity

• So far, Yantian has impacted 153 vessels across transpacific, transatlantic and Asia-Europe routes
  • 2M Alliance – 64 vessels
  • ONE – 52 vessels
  • OOCL – 26 vessels
  • CMA – 11 vessels
• We expect increased pressure on space and upward pressure on rates until at least mid-July.

Equipment

• Yantian congestion continues to restrict equipment levels.

Ports

• Disruption in Yantian has also affected Shekou and Nansha, though other Chinese reports remain unimpacted so far.
  • Yantian is operating on around 30% productivity, though they have also increased their window to accept cargo from three to seven days.
• Current delays for export are around 18 days from Yantian, with daily changing calls from carriers over which ports are being omitted.

Europe → USA (Transatlantic Westbound)

Rates

• Rates released for June indicate an increase of $500/40’ of Equipment imbalance and another $500/40’ of Peak Surcharge. No further increases have been announced.

Capacity:

• Space is fully booked from now until the end of June.

Equipment:

• The East Coast is facing a severe shortage of chassis, particularly in New York.

Ports

• The US East Coast has shorter waiting times than the West coast, though New York and New Jersey are still reporting delays of 12 hours to berth, 12-36 hours for Savannah, 1-2 days for Norfolk.

Air

IATA has reported in its latest market analysis that air cargo volumes in April this year continued to outpace  2019 levels.The association said this was largely due to the strong performance of carriers based in North America, the Middle East and Africa.

Global air cargo demand in April 2021, measured in cargo-tonne kms (CTKs), was reported as 12% higher than in April 2019 (used instead of last year for comparison purposes due to impact of Covid). IATA said that since May 2020, when strict global lockdowns were lifted in a number of countries, air cargo demand has continued to “display a steep upward trend”. It added: “This solid cargo growth performance this month was primarily driven by North American airlines, but all the regions outside Latin America contributed positively to the growth outcome.”

• Global capacity in April 2021, measured in available CTKs (ACTKs), was recorded at 9.7% lower than in April 2019.
• Cargo load factor was up by 11.2 percentage points to 57.8%.
• IATA said: “Cargo belly capacity did not improve in April compared to March. As has been the case since the start of the crisis, airlines are regularly increasing their freighters fleet size as well as daily freighter utilisation.”

Asia

US market

• Rates have reduced this week around USD6-7/kg ex PVG into North America (subject to space)
• Factories were closed on 14th June as China celebrated the Dragon Boat festival. This will result in less cargo for the beginning part of the week.
• We expect more COVID test boxes to be shipped this weekend, which will result in an increase in rates over this time.
• There are no flight cancellations this week
• Starting last week, CA have introduced a cargo flight into JFK
• Spot rates available for heavy/dense cargo as well as volume cargo.
• For all airports – rates and space must be checked on a case by case basis.

EU market (base airport like FRA/AMS/LUX, etc)

• Rates have reduced slightly this week and are between USD4-5/kg (subject to space)
• Factories were closed on 14th June as China celebrated the Dragon Boat festival. This will result in less cargo for the beginning part of the week.
• We expect more COVID test boxes to be shipped this weekend, which will result in an increase in rates over this time.
• Rates and space must be checked on a case by case basis.
• Spot rates available for heavy/dense cargo as well as volume cargo.

UK market

• Rates have reduced slightly this week and are between USD4-5/kg (subject to space)
• Factories were closed on 14th June as China celebrated the Dragon Boat festival. This will result in less cargo for the beginning part of the week.
• We expect more COVID test boxes to be shipped this weekend, which will result in an increase in rates over this time.
• There are direct flights with CA/BA, AIR-AIR by SQ and normal air-truck service. Space using deferred carriers is fully booked.
• Rates and space must be checked on a case by case basis.
• Spot rates available for heavy/dense cargo as well as volume cargo.

Americas

• No real change on rate levels into Europe/UK/Asia
• Space remains constricted due to reduced capacity.
• Air Canada are adding a converted Boeing 767 freighter to their fleet. This aircraft will service central
• American destinations such as Quito, Lima and Mexico as well as Miami.

Europe

• Rates have dropped slightly to the US and Asia.
• New flights are opening up, adding to the capacity. Finnair have resumed their flights into LAX and ORD this week
• New freighter airline ZFG Air – offering direct service ex UK into DXB twice a week with connection into HKG. They also offer return flights from HKG twice a week.

Road

Availability

Availability generally reliable across all routes and regions.

Rates

Rates remain stable across consolidated, groupage and dedicated trailers.

Customs

Border situations have improved considerably. From Tuesday 15th June, all drivers going into Netherlands must have a completed quarantine declaration form.

The route ahead

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