Zencargo Market Update: 14th March

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

• Asia
• North America
• Europe

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In focus: New Covid-19 wave has prompted Shenzhen to lockdown

Shenzhen, a vital export centre in southern China, has been placed into a week-long lockdown.

Announced on Sunday, the city has been placed on a seven day lockdown as coronavirus cases spike in China to levels as high as levels in 2020 when the virus was first detected.

Every citizen in Shenzhen will undergo three Covid tests this week while all manufacturing and commercial activities have stopped in the city.

Operations at DaChan Bay Terminals in Shenzhen remain normal as there have been special arrangements made for frontline staff.

Truck drivers entering Shenzhen are required to hold a negative Covid-19 test result within 24 hours and are required to test again upon arrival at the port. The city’s ports are setting quotas on how many vehicles are allowed to enter each day.

The last time Shenzhen suffered a similar outbreak, throughput fell by approximately three quarters. Businesses who have cargo in Shenzhen should communicate with their freight forwarding partners to find out the best solution to navigate the lockdown and export their goods.

Asia

China 

Ocean

• The impact of Covid restrictions and lockdowns in China is causing congestion in Far East ports.
  • Shenzhen’s lockdown has caused issues at ports and carriers have responded by introducing blank sailings for this port. Please read the ‘In Focus’ section for more details. 
• Blank sailings have been announced on the Asia-North Europe trade lane.
  • As export capacity is now exceeding demand, carriers have started to react. The 2M has announced blank sailings for Week 9, 11 and 12. 
  • The Alliance has 2 services with blank sailings for Week 13.
• Equipment availability:

Air

Central China to USA and Europe

• Due to the spike in Covid-19 cases in Shanghai, the delivery of goods to PVG Airport has been delayed. Therefore, space has increased for airfreight. 
• The epidemic controls at PVG airport are still in place. However, there are no rules that are specific to Omicron due to the day-to-day control on COVID-19.
  • Over 40% of cargo flights are cancelled
  • Terminals are at 50% in terms of labour resources.

• Due to the conflict between Ukraine and Russia, many flights remain cancelled. Please read our FAQs on updates surrounding the conflict in Ukraine here.  
  • Airlines such as RU/PO/AY/U3/VS/KZ/JL/F5 cancelled their flights from SHA Airport and NGB Airport to the EU this week. 
  • Airlines including CA/CZ/K4/5Y/PO have cancelled either all or some of its flights to the US this week from both NGB and SHA Airports. 
• Rates are unstable to both USA and Europe from SHA Airport and NGB Airport, therefore please check rates on a case-by-case basis. 
• Please collaborate with your partners and book space in advance. 

North China to USA and Europe

• From TSN Airport to the USA and Europe, space is tight and rates are high. 
  • Cargo flights such as KE/OZ operate a daily service to the USA and if booked in advance, they can offer fast arrivals for urgent orders. 
  • However, as many flights are cancelled or rescheduled, because of the Russia/Ukrainian conflict, space is extremely limited. 
  • Please check with your partner on a case-by-case basis. 
• Air rates from PEK Airport to the US and Europe remain level compared to last week. 
  • The Paralympic Winter Games started on 4th March, therefore space is tighter and trucking services will have more lead time. 
  • Please reconfirm rates and space 3-4 days in advance. 
  • Heavy dense cargo is available at a special rate so please check on a case-by-case basis. 

South China to USA and Europe

• From CAN Airport to the USA and Europe, space is extremely tight due to the Russia/Ukraine War and SZX Airport being closed this week due to Covid restrictions. 
• SZX Airport is in lockdown this week for 7 days until 20th March. All operations should be checked on a case-by-case basis. 
• Due to the situation in Ukraine, airlines are making adjustments to their flight schedules. Under these circumstances, air costs will increase dramatically. 
• All shipments need to be checked with carriers on a case-by-case basis.

India

Ocean

• India’s private ports are seeing a slow drop in cargo volume, despite setting their sights on growth for this fiscal year. 
  • Private ports in India are free to determine tariff rates unlike terminals at government-controlled major ports that operate under a regulated pricing mechanism.
  • According to the latest figures, combined volumes handled by minor ports decreased by 9.3% YoY in January, continuing a slowing trend that began in the second half of 2021. 
  • The downward trend is an indication of Covid-induced demand swings, seen at the earlier end of last year which gradually decreased over 2021. 

Air

• As India prepares to resume international passenger services this month, bellyhold capacity in the market is expected to increase. 
  • The Indian government will resume scheduled commercial international passenger services from 27th March. 
  • Covid lockdowns shut down scheduled services two years ago, causing belly space shortages. 
  • This has prompted a sense of optimism for the air freight industry as airlines are allowed to operate with more capacity. 

North America

USA

Ocean

• Consumer demand in the US remains relatively level and shows no signs of slowing. 
• The Port of Long Beach reported handling a record amount of cargo in February.
  • Last month, the port moved 796,560 TEU, up by 3.2% from the same month in 2021. 
  • Imports increased 4.4% to 390,335 TEUs, while exports declined 1.2% to 117,935 TEUs.
  • Empty containers moved through the port increased by 3.5% to 288,290 TEUs. 
• Along with the Port of Los Angeles, Long Beach has continued to postpone the ‘Container Dwell Fee’, which was announced around the end of last year. 
  • This would charge ocean carriers for containers that remained on docks for nine days or more. This would be a $100 per day charge, increasing incrementally by $100 for each additional day. 
  • Since the announcement on 25th October, the San Pedro Bay ports have seen a 64% decline in ageing cargo on docks. 

Europe

Benelux

Ocean

• Hapag Lloyd has released a recent terminal update on their services in Europe:
  • In Antwerp, Belgium, the labour situation is stable and the terminal is able to deploy sufficient gangs. 
  • Antwerp Gateway has a yard occupancy of 90% and the new regulation is still in place which only allows one service to call during a week. 
  • In Rotterdam, gang availability is still fluctuating due to COVID at the Europe Container Terminals. 
    • The yard situation at Rotterdam World Gateway is at 95%, with refrigerated containers at 95%.
    • There are 1000 containers bound for Russia at the yard, of which 350 are blocked by customs. 

UK and the Rest of Europe

Ocean

• The Russia/Ukraine war has caused ships and cargo to pile up at ports across Europe.
  • Ports in Cyprus, Bulgaria, Latvia and Finland are experiencing a sudden spike in congestion of around 40% to 80%. 
  • The withdrawal of shipping services calling at Russia and Ukraine has resulted in a significant re-routing of cargo, creating a backlog of freight at ports and terminals, many of which are already suffering from port congestion. 
• The Port of Felixstowe has broken its own record for the most containers handled on a single ship for the third time in two months. 
  • The record was set on the MSC Amelia, which handled a total of 27,961 TEU on 8th March. 
  • The increasing size of container ships places great demand on port resources and work is underway to increase the port’s ability to handle large container ships. 
• Schedule reliability on the Asia to North Europe trade lane decreased by 5% MoM in December/January 2022, reaching 17.6%. This is the lowest overall recorded figure on the trade lane.
  • On a YoY level, schedule reliability decreased by 16.3% in December/January 2022 compared to the year before.
  • Average delay for late vessels increased by 0.65 days MoM to 9.96 days, the highest overall recorded figure on this trade lane.
  • On a YoY level, the delay was 2.89 days higher compared to the previous year in 2021.

Road/Rail

• European driver shortages are expected to continue.
  • European road haulage is braced for a growing shortage of Ukrainian lorry drivers, who are well represented in the profession, especially on routes in Central Europe.
  • It has been reported that many of these drivers have returned home to their families or have enlisted in the Ukrainian armed forces following their government’s decision to mobilise men aged between 18 and 60.

• The UK and France work together keeping humanitarian aid moving to Ukraine.
  • The UK and France have removed border controls and sanitary checks on humanitarian relief to keep trucks moving. Aid shipments for NGOs assisting in humanitarian relief now need only be cleared under sealed conditions.
  • Last week, the French government announced that “goods addressed for the benefit of disaster victims” moving under customs code 9919000060 would not be subject to SPS controls, reducing the need for required documentation. What is required is a packing list, the name and address of who organised the donation, EORI and the registered receiving charity’s details, the type of goods and the transport designation.
  • Once this is ready, suppliers can provide hauliers with the required UK clearance paperwork, GMRs (outwards and return) for those without a GVMS, and the French smart border reference.

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.

March 14th – AD, HU
March 15th – HU
March 17th – GB (NI only),
March 19th – CH*, ES*
March 25th – GR

April 7th – CH*
April 8th – DE*
April 10th – BA*, ES*
April 14th – DK, ES, NO
April 15th – AD, CH, CZ, DE, DK, ES, EE, FI, GB, HU, LV, NO, NL, PT, SE, SK
April 16th – DK
April 17th – BA, DE, DK, EE, FI, HU, IT, LT, LV, NO, NL, PT, PL, SE, SI
April 18th – AT, AD, BE, BA, CH, CZ, DE, DK, ES, FR, FI, FL, GB, HU, HR, IT, IE, LU, LT, LV, NO, NL, PL, SE, SK, SI
April 22nd – BG, BA, GR, ME, RO, RS
April 23rd – BG, TR
April 24th – BG, GR, MD, RO, RS, UA
April 25th – BG, BA, GR, IT, MD, ME, PT, RO, RS, UA
April 27th – NL, SI

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.

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