Weekly Market Update - December 29, 2020

Ocean Freight Market Update

Asia → North America (Transpacific Eastbound)

Rates: Carriers have announced an extension of rates until mid-January, meaning that we are now unlikely to see and base Ocean freight increases prior to CNY. However, there is a strong likelihood that premium charges will continue to increase.  

Capacity: Currently space is available.   

Equipment: The equipment shortages are now far outweighing the space constraints, with some carriers reporting that all Cntrs are booked out until Week 3. The main deficit areas are  SPRC ( Yantian / Shenzhen ) and Ningbo. 

Ports: US imports are up by over 25% on this time last year, which is compounding the issues that we are seeing in terms of berth delays and at the rail heads. These issues are likely to be exacerbated further in the lead up to CNY. 

Asia → Europe (Far East Westbound)

Rates: Rates continue to rise into both the UK and Northern Europe. Spot rate levels reported for the 1st week of 2021 range between $12,000 to $16,000. 

Capacity: No blank sailings have yet to be announced for the CNY period. Space continues to be in high demand, in particular the UK where carriers are already reporting the “shutting off” of UK bookings for January.  

Equipment: A serious shortage of equipment is being felt in the southern regions of China and across most of Asia. In some cases now, carrier haulage is being enforced to ensure equipment is received.

Air Freight Market Update

Asia

• Signs continue to show that the rate to the UK and EU destinations are beginning to drop slightly and more and more spot rates are available.
• Due to the backlog / delay problems with trucking from Europe we will try to look at options who offer flights to the UK rather than truck connections from Europe.

Americas

• No major changes to the Americas market as they continue to clear the backlogs into South America and North East Asia. However, carriers are now beginning to accept some small bookings.
• Trucking availability is still at critical levels due to the continued high volumes of cargo and the terminal waiting times.
• Air cargo carriers will enjoy temporary seventh freedom rights across ten Latin American nations following the signing of an MoU. The move, which ICAO hopes will be replicated in other regions, is an attempt to make vaccine distribution more efficient and to bolster economies through e-commerce. The Latin-American Civil Aviation Commission (LACAC) has established, on a temporary basis, seventh freedom traffic rights for all-cargo flights by airlines from the subscribing countries. It lasts until the end of 2021, but is extendable for a further year.

Europe

• Air France KLM (AF KLM) Cargo and Lufthansa Cargo are adding extra cargo capacity between continental Europe and the UK as they look to cater for a freight backlog created by the closure of the UK-France border. The Franco-Dutch airline group said that it would operate four additional KLM Airbus A330 flights between Schiphol and Heathrow. Recent developments have seriously disrupted the normal flow of goods between mainland Europe and the UK. In order to meet the demand from customers, shippers and the citizens of the UK, they will be operating additional wide body belly (WBB) capacity during the festive season. WBB capacity makes it specifically possible to transport urgent, critical shipments. 
• Meanwhile, Lufthansa Cargo operated a Boeing B777 freighter from Frankfurt to Doncaster Sheffield airport carrying 80 tons of fruit and vegetables on December 23. They are also currently examining whether additional special cargo flights can be offered over the coming days.
• France has now reopened its border with the UK, but supply chain backlogs are expected to continue as trucks take time to clear.

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