International shipping and logistics market - Week 26/2022

International shipping and logistics market update for the week of 26/2022

1. Asia - North America route

Manufacturing and shipping activity in Shanghai is picking up, but volumes and how long it will take to recover from the two-month Covid-19 lockdown remains unclear. 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 freight rates trend due to more spaces at both ends, increased service reliability. Spot rates have fallen below long-term contract rates for the first time since April 2020 on the Asia-North America route. Carriers are expected to effectively continue to balance supply and demand by canceling sailings.

Labor negotiations by the International Labor and Warehouse Federation of America (ILWU) and the Pacific Maritime Association (PMA) are still underway when the current agreements expire on July 1.

- 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 $7,577/FEU, down 2.06% from last week and sharply down 8.48% from last month.

- Space: Most are available

- Empty container equipment: Improved

Recommendation: Shippers should continue to make reservations at least 2 weeks before estimated time of departure (ETD) for the best chance. For ready-made goods, importers may consider taking advantage of the available space and the plummeting spot market prices.

Freight rates Asia- US West Coast | Week 26/22 (Image: Phaata.com)

2. Asia - Europe route:

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

In general, the market remained relatively stable without a big spike in output. There are still many macro uncertainties such as the Ukraine conflict, high inflation across Europe, and falling consumer confidence. Q3 is expected to pick up strongly with a peak in the summer.

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

- Freight rates: Rates are extended until mid-July. Freight rates from Asia to Northern Europe this week decreased slightly to 10,284 USD/FEU, down 0.67% compared to last week and down 0. 78% from last month, according to Xeneta data.

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

- Container equipment: Improved but still lacking in many Asian countries.

Recommendation: Shippers should make reservations at least 2 weeks before before estimated time of departure (ETD). Consider choosing a premium service and have the flexibility to choose replacement equipment when needed. Be flexible when planning shipments with anticipated congestion and delays.

Freight rates Asia-Europe | Week 26/22 (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 decreased slightly to $1,098/FEU, down 0.27% from last week and down 0.63% 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).

Freight rates US West Coast - Asia | Week 26/22

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Read more:

• Swire Shipping completes acquisition of Westwood Shipping Lines
• COSCO SHIPPING launches combined rail-sea transportation service “Nanchang-Qinzhou-Vietnam

Source: Phaata.com 

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