International shipping and logistics market

International logistics and container shipping market on Asia, Europe and North America routes in the week of 25/2022.

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International shipping and logistics market update for the week of 25/2022

1. Asia - North America route

Shanghai has reopened after two months of lockdown and restrictions related to Covid-19. Production and shipping activities can resume normally, shipping activities have recovered, however the volume and time to recover after two months of Covid-19 blockdown is still unknown.

Intermodal congestion and container/trailer shortages tend to increase for inland shipping in China.

Demand remains weak on the Asia-North America route, as uncertainty remains over whether shipments will spike and peak season is expected. For goods that are already in stock, US importers can take advantage of the available space in the market along with better spot rates.

The Asia-North America service remains on a continuing downward fare trend due to more seats at both ends, increased service reliability.

Labor negotiations by the International Labor and Warehouse Federation of America (ILWU) and the Pacific Maritime Association (PMA) are still underway.

- Freight rates: Freight rates continue to decrease on the Asia-North America route as demand remains low compared to the supply capacity of carriers. Rates fell in many areas, particularly into US West Coast (USWC) ports. According to Xeneta, freight rates from Asia to the West Coast of North America this week were at $7,695/FEU, down 2.78% from last week and down 7.37% from last month.

- Space: Most are available

- Empty container equipment: Improved

Recommendation: Shippers should continue to book at least 2 weeks before estimated time of departure (ETD) for the best chance; Consider switching from a standard service to a premium guaranteed service. Monitor and check closely with suppliers to capture any Covid-19 related impacts or changes on their production and forecasts quickly to adjust accordingly fast.

Freight rates Asia- US West Coast | Week 25/22 (Image: Phaata.com)

2. Asia - Europe route:

After Shanghai reopens, cargo volume on the Asia-Europe route is increasing again but the recovery is not yet a sudden spike.

Q3 is expected to pick up strongly with a peak in the summer. However, there are many macro uncertainties such as the Ukraine conflict, high inflation across Europe, and falling consumer confidence.

Severe congestion at European ports is delaying return trips to Asia, leading to more delays and cancellations.

- Freight rates: Freight rates tend to increase in June due to more scarce space. Rates from Asia to Northern Europe were at $10,353 per FEU, up 0.81% from last week and up 0.60% month on month, according to Xeneta data.

- Space: The space is starting to fill up again.

- Empty Container equipment: There has been improvement but there is still a shortage in many Asian countries.

Recommendation: Shippers should make reservations at least 2 weeks before estimated time of departure (ETD). Consider choosing a guaranteed service and have the flexibility to choose replacement equipment when needed.

Freight rates Asia-Europe | Week 25/22 (Image: Phaata.com)

3. North America - Asia route:

Vessel arrivals and available capacity remained stable for all US West Coast ports.

The East Coast region continues to see challenges with vessel congestion and a number of shipping lines have abandoned services to the ports of Charleston and Savannah.

Several shipping lines have announced that rail freight operations from Chicago across the West Coast have been improved and expanded to increase volume.

Erratic sailing schedules continue to pose major challenges.

- Ocean freight: According to Xeneta, freight rates from North America to Asia this week remained unchanged, remaining at $1,101/FEU, up 0.36% month on month and down 3% from last month. Shipping lines have announced the application of a limited GRI general price increase surcharge in July.

- Space: Stable for West Coast ports, and has improved in US East Coast ports.

- Empty 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 weeks or more before estimated time of departure (ETD).