Zencargo Market Update: 20th May 2024

Ocean

• Capacity offered on Asia-Europe routes is expected to contract by more than 13% in Q2 2024 compared to Q3 2023, with alliances cancelling 5% of sailings between weeks 20 and 24​​​​.
• Rates continue to rise due to the strong imbalance between supply and demand. Carriers have successfully implemented General Rate Increases (GRIs) for the second half of May and are pushing for further increases in June​​.
• Due to the Red Sea crisis, many vessels are still avoiding the Suez Canal and opting for the longer route around the Cape of Good Hope. This has increased transit times significantly​​.
• The effective capacity to Northern Europe, based on actual vessel departures from Asia, has decreased by 5.1% compared to a year ago. This decline is primarily due to the longer route taken by the majority of vessels via the Cape of Good Hope, despite a 17.8% increase in vessel capacity on the Asia-North Europe route.
• In contrast, the effective capacity on the Asia-Mediterranean route has increased by 10.5%, even with the diversions via the Cape. This rise is attributed to a substantial 49.1% increase in total deployed capacity on this route compared to a year ago.

Air

The market is tight across various regions with strong demand for air cargo rates increasing across multiple routes from China to Europe. For instance, from SHA to Europe, the market is busy with slightly increasing rates. From NGB to Europe, rates are stable but subject to case-by-case fluctuations​​.

Central China to Europe (SHA/NGB):

• SHA: The market is full of e-commerce cargo, and rates have slightly increased. The booking outlook is positive, with rates expected to rise slightly in the near term​​.
• NGB: Rates remain stable but depend on actual flight availability. Bookings should be checked on a case-by-case basis for the best spot rates​​.

North China to Europe (TSN/DLC/PEK/TAO):

• TSN: Rates are high and fluctuating, with tight market conditions compared to last week. Competitive rates are available from specific airlines but require advance booking​​.
• DLC/PEK: Rates are fluctuating with most airlines. Dense cargo can apply for spot rates, and bookings should be made well in advance due to tight space​​.
• TAO: The market is stable and space is not so tight. Rates have increased slightly, and direct flights to LHR are particularly tight​​.

South China to Europe (CAN/SZX/XMN):

• CAN: The market is calmer than others, creating potential for discounts. Rates remain subject to spot rate checks based on actual flight dates​​.
• SZX: Market conditions are normal with all shipments requiring carrier checks case by case​​.
• XMN: Market conditions remain stable, but e-commerce cargo is increasing, potentially raising costs. 

Ocean

• Capacity is extremely tight across all Asia-USA routes, with significant constraints expected to persist. The strong demand has led to substantial rate increases and congestion at major ports​​​​​​.
• Rates have increased sharply for the second half of May, with further rises expected in June. The implementation of new tariffs on Chinese imports by the Biden administration is contributing to this upward pressure on rates​​​​.
  • CMA CGM will launch a new intra-America service connecting Brazil to Argentina. The port rotation includes Santos – Buenos Aires – Mar del Plata – Imbituba – Santo.

Air

Central China to USA (SHA/NGB)

• SHA: The market is busy with e-commerce cargo dominating. Rates have slightly increased and space is limited. Advanced booking is recommended to secure space​​.
• NGB: Rates have increased slightly and depend on flight availability. Final rates are determined on a case-by-case basis​​.

North China to USA (TSN/DLC/PEK/TAO)

• TSN: Rates from Korean Airlines have increased and are fluctuating. Space is tight and advanced booking is essential. Competitive rates from Japan Airlines are available for volume cargo​​.

• DLC/PEK: Rates with most airlines are increasing, with dense cargo applying for spot rates. Booking needs to be done 10 days in advance due to tight space​​.
• TAO: The market is stable with tight space and slightly increased rates. Spot rates are available for dense cargo on a case-by-case basis​​.

South China to USA (CAN/SZX/XMN)

• CAN: The market is calm with potential discounts available, subject to spot rate checks based on actual flight dates​​.
• SZX: Market conditions are normal with all shipments requiring carrier checks case by case.
• XMN: The market is stable, but e-commerce cargo is increasing, potentially raising costs​​.

Ocean

• Several carriers have announced General Rate Increases (GRIs) for May. Despite the capacity issues, rates are rising due to increased demand and equipment imbalances​​​​.
• Demand on the Transatlantic trade lane is improving as the traditional high season approaches. However, capacity remains a challenge with significant overcapacity on the U.S. East Coast (USEC) route​​​​.
  • The schedule reliability on the Transatlantic Eastbound route has decreased, with a drop of 6.9 percentage points, resulting in a reliability rate of 53.7%​​​​.

• While space from the USWC to Europe has improved, it remains tight, with key west Mediterranean ports experiencing congestion due to increased transshipment volumes​​.
  • The schedule reliability on the Transatlantic Westbound route has also dropped, with a decrease of 8.1 percentage points to 50.7%​​​​.

USA

Ocean

• Los Angeles/Long Beach: 2 vessels waiting to berth with a 6-day dwell time on rail terminals. Yard capacity is 77% full.
• Oakland: Current Status: 6 vessels waiting to berth with a 7-day dwell time on rail terminals.
• Vancouver (Canadian West Coast): 2 vessels waiting to berth with an 8-day dwell time on rail terminals. Yard capacity is 77% full.
• New York/New Jersey: 2 vessels waiting to berth with a 3-day dwell time on rail terminals. Yard capacity is 60% full.
• Norfolk: 4 vessels waiting to berth with a 3-day dwell time on rail terminals.
• Charleston: 10 vessels waiting to berth with a 6-day dwell time on rail terminals.
• Savannah: 1 vessel waiting to berth with a 2-day dwell time on rail terminals.

United Kingdom

Road 

• New truck registrations decreased for the first time in 2 years with a nearly 4% decrease in Q1 2024. 
  • 11,068 new HGVs were registered in Q1, a decrease of 449 units compared to the same period in the previous year. 
  • Volumes for rigid HGVs increased by 8.4% year-on-year to 6,237 units however, articulated HGVs decreased by 16.5% year-on-year to 4,741 units.
  • Zero emissions vehicle registrations reached 0.5% of overall registrations, an increase of 0.3% in the same quarter last year.
  • Mike Hawkes, SMMT chief executive, has said that the truck sector remains steady but more action is required to sustain a green fleet and decarbonise UK transport. 

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.

May 20 – Austria, Belgium, Denmark, France, Germany, Hungary Luxembourg, Netherlands

May 24 – Bulgaria

May 30 – Austria, Croatia, Germany*, Poland, Portugal, Spain*

May 31 – Spain*

June 1 – Moldova, Romania

June 2 – Italy, Lithuania

June 3 – Ireland (Eire)

June 5 – Denmark*, Faroe Islands*

June 6 – Sweden

June 7 – Isle of Man, Malta

June 9 – Aland (Ahvenanmaa)

June 10 – Portugal, Spain*

June 12 – Russia

June 13 – Portugal*, Spain*

June 15 – Türkiye* 

June 16 – Albania, Bosnia & Herzegovina (FBIH)*, Kosovo, North Cyprus, Türkiye

*Not in all regions