International shipping and logistics market - Week 10/2022

International shipping and logistics market update for the week of 9/2022

1. Asia - North America route

The conflict between Russia and Ukraine has caused crude oil prices to rise, pushing up fuel prices and causing shippers to incur higher fuel surcharges.

Freight rates remain high and space remains short on the Asia-North America route. Containers are shipped primarily with a "premium" service. Standard service bookings are limitedly offered by shipping lines due to lack of spaces.

Congestion is expected to continue to worsen, due to volatile markets and global uncertainties. Schedule delays remain severe for the Asia-North America service. Industry experts predict a return to pre-Covid normal will take a few more months to a year. Severe congestion, backlogs of goods awaiting export and high freight rates all suggest that there is no way to recover from current tensions.

Shipping lines and ports are also bracing for potential disruptions as existing labor contracts with the International Federation of Warehouses and Laborers of America (ILWU) expire in June.

- Freight rates: High freight rates and demand for bookings with guaranteed "premium" services increased sharply.

- Space: Lack of seriousness

- Empty container equipment: There is a serious lack of equipment.

Recommendation: Shippers should continue to make reservations at least 4-5 weeks before ETD for the best chance; Consider switching from a standard service to a "premium" service. Shippers consider choosing to deliver at coastal destinations instead of inland due to connection delays between shipping methods.
 

2. Asia - Europe route:

The conflict between Russia and Ukraine has caused crude oil prices to rise, pushing up fuel prices and causing shippers to incur higher fuel surcharges.

The market has not fully recovered from the Lunar New Year yet. Space scarcity has improved in carrier alliances. However, restrictive policies still apply to bookings under a long-term contract.

The area was affected due to many blanked sailings, significantly reducing capacity, especially in week 12.

The reliability of the schedule is very low with many sailings being missed and sailing schedules changed.

- Freight rates: Freight rates remained high but gradually decreased in March as cargo volume recovered more slowly than expected.

- Space: Shortage

- Container equipment: Shortage in all Asian countries.

Recommendation: Shippers should make space reservations at least 3-4  weeks before ETD. Consider choosing a guaranteed "premium" service and have the flexibility to choose replacement equipment when needed.

3. North America - Asia route:

Incoming vessel numbers and available capacity remained stable for US West Coast ports. Port capacity on the East Coast of the United States has improved.

The situation in East Coast ports shows that Port of Savannah operations are improving but delays are increasing in surrounding areas such as the Port of Charleston and the Port of New York.

The integrity of the schedule is impaired. There are many blaned sailings and delays, which are creating great challenges with the ship's arrival and departure dates already announced.

- Ocean Freight: Shipping lines have announced limited GRI level and freight rates for March. Some shipping lines have announced GRI for April 1.

- Space: Space is extremely scarce for West Coast ports, but has improved in US East Coast ports.

- Container equipment: The shortage of container equipment is still causing difficulties for goods transported from within the US, especially at major ports.

Recommendation: Shippers make reservations at least 4-6 weeks before ETD.

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Phaata wishes you successful business!

Read more:

• Hapag-Lloyd surpasses USD 26 billion in revenue and USD 10 billion in profit in 2021
• Schedule reliability of container shipping lines drops to record low in January 2022
• ZIM launches a new service connecting China and Vietnam to US East Coast
• Kuehne + Nagel achieves 173% profit growth in 2021

Source: Phaata.com 

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