Ocean Freight Market
Market Overview: Transpacific blank sailings continued to creep up through April as demand stumbled following lockdowns in China. China’s export volume will likely begin recovery over the coming weeks as over 600 factories have begun to come back online with restrictions, which points to the traditional peak season starting earlier than usual this year. As volumes increase, we can expect a higher percentage of shipments requiring Premium bookings.
China Lockdown Update: Although the lockdowns in Shanghai have been the daily news, China has implemented restrictions or lockdowns in 87 of its largest 100 cities over the past two months. Worth noting that many factors point to lockdowns extending to other parts of China, IE school closures in Beijing. There are many reports that there will be a “tsunami of freight” when lockdowns are lifted. However, data shows total throughput at Shanghai’s Yangshan and Wai Gao Qiao terminals is down 20% since mid-March. Our partners advise that there will likely be a spike in volume with rates following, but major bottleneck issues across markets and extreme congestion at U.S. ports are unlikely. A bigger concern remains the long-term effects across Asia as Shanghai is the largest transshipment hub in Asia and affects bidirectional container flow in and out of major markets. Many Southeast Asia out-ports are facing extremely low empty container stores due to cancelled feeder sailings, delays, and skipped calls, further contributing to container imbalances. Janel Group will be monitoring and reporting these events closely for alternative solutions.
General Rate Increases (GRI): May 1 GRI partially implemented with May 15 likely for partial implementation depending on the status of Shanghai lockdowns. Carriers are far more likely to explore premium service increases to adjust to actual demand.
Holiday Notice:
Hong Kong: Offices closed May 2. Normal hours to resume May 3. Offices closed May 9. Normal hours to resume May 10.
China: Offices closed May 1 through 5. Normal hours to resume May 6.
Cambodia: Offices closed May 1 & 2. Normal hours to resume May 3. Offices closed May 14 through 16. Normal hours to resume May 17. Offices closed May 19. Normal hours to resume May 20.
India: Offices closed May 3. Normal hours to resume May 4. Offices closed May 16.
Indonesia: Offices closed May 1. Normal hours to resume May 2. Offices closed May 3 & 4. Normal hours to resume May 5. Offices closed May 16. Normal hours to resume May 17. Normal hours to resume May 17. Offices closed May 26. Normal hours to resume May 27.
Korea: Offices closed May 5. Normal hours to resume May 6.
Malaysia: Offices closed May 1 through 4. Normal hours to resume May 5. Offices closed May 15 & 16. Normal hours to resume May 17.
Philippines: Offices closed May 1. Normal hours to resume May 2.
Taiwan: Offices closed May 1. Normal hours to resume May 2.
Thailand: Offices closed May 2. Normal hours to resume May 3. Offices closed May 4. Normal hours to resume May 5. Offices closed May 16. Normal hours to resume May 17.
Vietnam: Offices closed April 30 & May 1. Normal hours to resume May 2.
Airfreight Market
Market Overview: Many airlines extended embargos on all Shanghai Pudong International flights. Cargo terminals remain operating slowly. Dispute Shanghai’s continued lockdown, and flight capacity show a slow recovery starting next week with strict virus screenings of all staff. Rates out of China will remain elevated with the expected backlog of freight and peak season volumes, despite offset in fuel decreases. Road transportation rates continue higher as extra permissions cause delay and demand.
The U.S. Market
Market Overview:
Congestion continues in LA/LB and across most East Coast ports. All markets are starting to experience a slowdown in inbound container volumes due to continued lockdowns in China. Warehouses continue to report limited capacity as inventory levels remain strong. Backlogged containers continue to absorb chassis equipment and yard space, adding to disruptions in trucking productivity. Port of LA/LB approved new clean truck fees to be assessed on cargo owners beginning April 1, 2022. U.S. West Coast port representatives are warning to brace for another surge in the supply-chain crisis as manufacturers in Asia reopen their factories. A surge of import freight is guaranteed but many indicators point to demand dropping significantly pre-lockdown. Lower volumes have resulted in dry-van rates dropping over $0.50 per mile and total fleet for hire on a steady increase since January 2022 (Source).
Janel Group continues to closely monitor the market and port situation. Updates will be provided as they come available. To secure a booking or explore additional options for your supplier, please reach out to your Janel Group Representative.
Gabriel Racicot
Pricing & Commercial Support Manager