Ocean Freight Market
Market Overview: Carriers are facing their first post-pandemic supply/demand test as demand continues. Transpacific blank sailings have stabilized at 18-20% of capacity being voided per week into March. Despite the reduction in blank sailings, demand remains weaker than carriers expected, causing isolated premium and spot rate reductions. However, the spike in fuel costs is already having an effect as April increases continue to be announced. Adding to the fuel supply shock, the Suez Canal Authority will cancel rebates granted to carriers as of March 15. China mainland, specifically Shenzhen is experiencing local lockdowns extending from March 14 through March 20 that is expected to influence freight out of the region. Terminals in Yantian, Shekou, and Dachan Bay are currently operating as normal with restrictions in and out of the cities.
Russia-Ukraine conflict: Sanctions against Russia continue to intensify as many carriers announce discontinuing and reroute services. Carriers have begun diverting freight for “Rail-Sea” services that use mainland China’s national railway to send containers for trans-Atlantic Ocean service to the US East Coast. Maersk announced their plan to sell their stake in GPI, which operates terminals in Russia and Finland. Drewry recently noted although current repercussions for Black Sea shipping are not affecting outside markets currently, rising fuel prices and general uncertainty will further impact an already disrupted freight market.
Our priority remains the safety of our partners, customers, and colleagues across the region. Your Janel Group representative will reach out directly to discuss the best options for shipments affected. We are continually monitoring as the situation unfolds.
General Rate Increases (GRI): Carriers are confirming no rate increases for the month of March with some indication April 1 GRI/PSS will not be implemented as well.
Holiday Notice:
Hong Kong: Offices closed April 5. Normal hours to resume April 6. Offices closed April 15 through 18. Normal hours to resume April 19.
China: Offices closed April 3 through 5. Normal hours to resume April 6.
Cambodia: Offices closed April 14 through 16. Normal hours to resume April 17.
India: Offices closed April 14 & 15. Normal hours to resume April 16.
Indonesia: Offices closed April 15. Normal hours to resume April 16.
Malaysia: Offices closed April 19. Normal hours to resume April 20.
Philippines: Offices closed April 9. Normal hours to resume April 10. Offices closed April 14 & 15. Normal hours to resume April 16.
Taiwan: Offices closed April 9. Normal hours to resume April 10.
Thailand: Offices closed April 9. Normal hours to resume April 10. Offices closed April 13 through 15. Normal hours to resume April 16.
Vietnam: Offices closed April 10. Normal hours to resume April 11. Offices closed April 30 & May 1. Normal hours to resume May 2.
Airfreight Market
Market Overview: The market has experienced rapid increases to demand with rates levels increasing slightly week over week. Capacity from China Transpacific is critical this moment with airlines cancelling scheduled flights from Shanghai to JFK till the end of this year, switching to charter service. Lockdowns across Asia will contribute to capacity issues and rate increases in the coming weeks. As a result of the ongoing Russia-Ukraine conflict, rates have risen, and standard service is starting to see a minimum five-day lead time from booking to uplift.
The U.S. Market
Market Overview:
Fuel costs are hitting record highs across the globe forcing U.S. truckers to announce the first set of increases to fuel surcharge percentages, in many cases as high as 15-20 percent.
USWC: Carriers and terminals have improved efficiency and vessel turn times since the beginning of the year as congestion has slowed to a manageable pace with 40-50 vessels at anchor. However, our partners are predicting a post-CNY rush where we could see numbers return to 100+ vessels, coinciding with ILWU labor negotiations that are heating up. LA/LB Port Harbor Commission has voted unanimously to extend the implementation of the container dwell fee directed at ocean carriers to improve cargo movement on container terminals.
USMW: Carriers continue to actively canvass for more IPI cargo, having a positive effect on smaller rail ramps and some relief into Chicago. Equipment shortages remain the key issue in the Mid-West.
USEC: Congestion across NYC, CHS, SAV, and other East Cost terminals continue to cause backlog with surging congestion and trucking costs triggering concerns over service disruption on the Asia-US East Coast corridor. ZIM is launching “Zim Ecommerce Baltimore Express” (ZXB), the first-ever expedited ocean service that will connect S.E Asia with USEC, making Baltimore the first US call amid congestion at other major ports. The service will have a full port rotation of Yantian, Cai Mep, Baltimore, New York, New Jersey, Boston.
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