Market Update Sept. 30, 2021

Ocean Freight Market

Market Overview: Rates remained stable through September, but we cannot rule out increases in October as carriers aim to increase blank sailings coinciding with the holidays in Asia. Our partners and news outlets report widespread power shortages in China, affecting factory production.

United States regulators at the Federal Maritime Commission recently closed the door on guidance or regulation citing freight rates a result of unprecedented demand, not market manipulation.

General Rate Increases (GRI): October 1 GRI implementation by some carriers. October 15 GRI likely partial or none as carriers do not appear confident to continue twice monthly increases, an indication of weaker forecasts for October.

Carrier Premium Service: Premium rates will remain firm with increases over the next two weeks are unclear.

COVID-19 Updates: SE Asia - remains on various forms of lockdown; China - trucking precautions continue to affect flow from inland locations. Concerns of energy consumption have caused local officials to force additional factory shutdowns, which will have ripple effects in supply chains Myanmar - lockdown extension to continue past extension as our partners are still not accepting bookings. Vietnam - Under pressure from the manufacturing sector, government is considering lighter restrictions.

Blank sailings: Blank sailing notices can be found on our website (Week 40)

Holiday Notice:

• Malaysia: Offices closed Oct 19. Normal hours to resume Oct 20.

• Taiwan: Offices closed Oct 9 through 11. Normal hours to resume Oct 12.

• Thailand: Offices closed Oct 13. Normal hours to resume Oct 14. Offices closed Oct 22 through 23. Normal hours to resume Oct 24.

• Indonesia: Offices closed Oct 19. Normal hours to resume Oct 20.

• Cambodia: Offices closed Oct 5 through 7. Normal hours to resume Oct 8. Offices closed Oct 15. Normal hours to resume Oct 16.

• Mainland China: Offices closed Oct 1 through 7. Normal hours to resume Oct 8.

• Hong Kong: Offices closed Oct 1. Normal hours to resume Oct 2. Offices closed Oct 14. Normal hours to resume Oct 15.

• India: Offices closed Oct 2. Normal hours to resume Oct 3. Offices closed Oct 15. Normal hours to resume Oct 16.

Airfreight Market

Market Overview: Airfreight rates out of Asia continued to climb last week as the region catches up following Typhoon Chanthu and China’s Golden Week holiday approaches (October 1-7). China’s power outages and cuts to meet energy use targets likely foreshadow shortages of global goods. Our partners are warning to prepare for what is expected to be a more challenging peak season.

Trans-pacific: Rates climb due to persistent factors in the market and capacity remains tight. However, post-Golden Week some supply is expected to return to the market and rates may see some relief. Power outages and cuts across mainland China will decrease production, which may help alleviate capacity strains.

Trans-Atlantic: Rates remain steady as no significant increase in demand. Our partners report delays for cargo due to high volume experienced at ground handling terminals in FRA and AMS. It is expected that PAX capacity injection from November onwards on the TAWB lane will add capacity needed to deal with holiday demand increases.

Americas: TPWB Rates remain steady, and capacity is most strained via key hubs (LAX/ORD/JFK). Ground handlers continue to report 3-5 days of backlog. TPEB Rates remain steady and capacity available. Export cargo experiencing a minimum of 3-5 days tender prior to departure. Trucking remains scarce with longer than normal lead time needed to secure space for airport transfer, local pick up and especially longer hauls, as truckers can exclude moves without short turnaround times.

The U.S. Market

Market Overview: Although vessel queues outside the US have stabilized, congestion at key ports such as Los Angeles / Long Beach and Savannah is worsening, with more ships at anchor now than at any time during the Covid period. The congestion is costing neighboring ports business, as more loops skip their calls (IE LAX>Oakland, NYC>Boston, etc.) in a desperate attempt to recover lost schedule days after departing. In response to the situation, the port of Los Angeles is extending gate hours on weekends, while Long Beach terminals keep gates open between 2am and 7am. However, these measures are not expected to make a significant impact, as the respective demand for chassis, truck power, and rail yard space remain well over efficiency limits.

(Currently 70 vessels at anchor off LA/LB ports with a 10-day dwell time and 24 at anchor at Savannah)

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