Zencargo Market Update: 16th October 2023

China

Ocean

• Stringent capacity management and the threat of significant FAK rate hikes by Asia-North Europe carriers have stopped the decline in container spot rates on this route.
  • Short-term rates are showing a slight increase, albeit from low levels, following several weeks of 10% declines.
  • Anticipated FAK rate increases of about $1,800 per 40ft from November 1st, along with a reduced service “winter schedule” by Maersk and MSC of the 2M alliance, are expected to impact market sentiment and potentially drive a modest rate recovery in this trade lane.
  • It is uncertain if all alliance carriers will exercise the required restraint and refrain from offering additional rate discounts in the upcoming weeks with lower booking activity.
  • Meanwhile, backhaul rates from North European ports to Asia are unprofitable for carriers. However, this route is also the cheapest for carriers to reposition their non-urgent equipment back to China.

Air

Central China to USA and Europe 

• From SHA to Europe and the US, rates have increased slightly this week. 
  • The market is busy and there have been some cancelled flights on the US route. 
• From NGB to Europe, rates have increased due to the peak season.
  • However, rates remain the same from NGB to the US.
  • The final rate is offered on a case-by-case basis.

North China to USA and Europe:

• From TSN to Europe and the US, rates have increased for Korean Airlines to both destinations. 
  • Space with Korean airlines has also resumed to normal levels. 
• From PEK to Europe and the US, hot weather is currently causing loading issues. 
  • Major services from PEK to Europe include: Singapore Airlines, Cathay Pacific, Lufthansa, Air China, KLM, Air France, Japan Airlines.
  • Major services from PEK to the US include: Cathay Pacific, Japan Airlines, All Nippon Airways and Eva Air. 
  • Hot weather is currently causing loading issues. 
• From TAO to Europe and the US, the market was busy last weekend and rates have increased as space has become tighter. 
  • Rates will need to be checked on a case-by-case basis.

South China to USA and Europe:

• From CAN to Europe and the US, space has become quite tight and airlines have cancelled flights on these lanes. 
  • All shipments will need to be checked with the carrier for rates on a case-by-case basis.
• From SZX to Europe and the US, rates are stable this week. 
  • The market has returned to normal after Golden Week. 
  • All shipments will need to be checked with the carrier for rates on a case-by-case basis.
• From XMN to Europe and the US, rates remain stable. 
  • All shipments will need to be checked with the carrier for rates on a case-by-case basis.

USA

Ocean

• CMA CGM is investing $600 million in its recently acquired New York and New Jersey terminal operation to increase capacity by around 80%.
  • The investment is made in close partnership with the states of New Jersey and New York, following the acquisition of the Bayonne and New York terminals less than two months ago.
  • While CMA CGM hasn’t provided extensive details on how the investment will be used, it is clear that the terminals are currently underutilised, offering opportunities for expanded operations and improved stack density.
  • The investment is expected to create 1,000 union jobs and represents a significant step in CMA CGM’s strategy to modernise and develop infrastructure around the world. 
  • The Port Liberty New York and Port Liberty Bayonne terminals are now CMA CGM’s flagship terminals in North America, enhancing the company’s service offerings to customers, according to CEO Rodolphe Saadé.

Benelux

Ocean

• Barge owners in northern Europe are shifting from containers to liquid transportation due to the impact of declining rates in deep-sea container shipping.
  • Full-box movements at Antwerp and Rotterdam have been consistently low, with the sector’s primary demand coming from empties and repositioning.
  • Many barge owners are transitioning from dry bulk and container services to the liquid market, which is experiencing higher demand. As a result, some are selling their container barges to invest in larger tanker barges.
  • Despite the reduced demand, congestion persists with around 24-hour delays in both Antwerp and Rotterdam.
  • Container barge operator Contargo has introduced low-water surcharges due to reduced rainfall and low water levels on the Kaub Gauge, below 81cm.
  • Surcharges range from €215 to €825 per TEU and FEU, depending on the water levels, and the company is making efforts to transport containers, with the expectation of improved water levels in the future.
  • At the time of reporting, the Kaub Gauge was at 76cm, having declined by 8cm in the past 24 hours.

UK

Road

• Rules allowing Cat B licence holders to drive alternatively-fuelled vans up to 4.25 tonnes in weight will change, limiting this licence flexibility to zero emission vans only, excluding biogas, natural gas, and other non-zero emission powertrains.
  • The Office of Zero Emission Vehicles (OZEV) announced these changes following a government consultation on driving licence requirements for alternatively-fuelled vans to encourage faster adoption of zero emission vans.
  • Currently, UK rules provide flexibility for standard Cat B licence holders to drive alternatively-fuelled goods vans with a maximum authorised mass of 4.25 tonnes, with five weeks of additional training.
  • The consultation determined that restricting Cat B licence flexibility exclusively to zero emission vans and excluding some alternatively-fuelled powertrains aligns with decarbonisation objectives.
  • Cat B licence holders will no longer be required to complete five weeks of training before driving 4.25 tonne zero emission vans, aiming to make adopting zero emission vans as easy as their petrol or diesel counterparts.
  • The consultation also recommends subjecting zero emission vehicles (ZEVs) to the same towing rules as equivalent internal combustion engine (ICE) vehicles, allowing ZEVs under licence flexibility to tow a vehicle and trailer combination up to 7,000 kg maximum authorised mass, under the same conditions as ICE vehicles.
  • The British Vehicle Renting and Leasing Association (BVRLA) welcomed the recommendations, emphasising the positive step to accelerate the adoption of zero electric vans and their efforts to lobby the government for similar MOT regime flexibilities for heavier zero-emission vans.

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.

Oct 23 – Hungary

Oct 26 – Austria

Oct 28 – Cyprus, Czech Republic, Greece

Oct 30 – Ireland (Eire)

Oct 31 – Germany*, Slovenia

Nov 1 – Austria, Belgium, Croatia, France, Germany*, Hungary, Italy, Lithuania, Luxembourg, Poland, Portugal, Slovakia, Slovenia, Spain

Nov 2 – Belgium*, Lithuania

Nov 4 – Finland, Sweden

Nov 9 – Spain*

Nov 11 – Austria*, Belgium, France, Poland

Nov 15 – Austria*, Belgium*

Nov 17 Friday Czech Republic, Slovakia

Nov 18 – Croatia, Latvia

Nov 20 – Latvia

Nov 22 – Germany*

Nov 30 – Romania

*Not in all regions