Ocean Freight Market
Market Overview: Freight markets have experienced exponential growth over 2021 and rate increases are not expected to moderate in the near term. Chinese New Year (CNY) and the height of peak season is upon us, via continued equipment shortages across Asia, space difficult to secure, and premium service space or co-Loader space being the only options for the coming month.
The silver lining for 2022 is retail inventories, which rose more than 2% in the last quarter while imports jumped 4.7% and exports dropped 2%. Moreover, real consumption (including services) was flat compared to pre-COVID levels, implying demand will slow and may result in rate reductions over Q1/2-2022. Some carriers have postponed January 1 & 15 Emergency Peak Season Surcharges (EPSS) likely due to the expected post-CNY lull.
General Rate Increases (GRI): January 1 GRI partial implementation with January 15 GRI likely as last increase prior to CNY.
Blank sailings: Current operational blank sailing announcements from the carriers can be found on our website.
Holiday Notice: Pending 2022 schedules
Airfreight Market
Market Overview: All key markets remained strong throughout 2021. Our partners predict rates to remain elevated through Q1-2022 due to the Omicron variant, impacting air capacity due to local Asia restrictions as well as unstable ocean freight market pushing the volume to airfreight. Chinese New Year holiday closures are scheduled from Jan 31 to Feb 6 and are anticipated to cause further disruptions to global markets.
The U.S. Market
Market Overview: The number of container ships anchored off the Southern California coast remains above 80. Unrelenting vessel volumes struggle to meet consumer demand. Shippers attempting to find alternatives in avoiding LA/LB port congestion have found port calls to surrounding ports are being skipped entirely. These continued bottlenecks continue to compound as inventory forecasters are unable to predict how long consumer demand will remain elevated, forcing many shippers and retailers to hold additional inventory for a “just-in-case” model, resembling a bubble-like market condition. The “Excess Dwell” (CED) fee of LA/LB ports had been postponed till 1/3 due to a combined decline of 41% in aging cargo on the docks.
On the bright side, there were signs of improvement during the fourth quarter of 2021 as rail ramps and intermodal hubs such as Chicago, Dallas, Kansas City, and Memphis saw an end to the paralyzing congestion via USWC. CMA recently announced the opening of “CMA LOT 17”, an offsite container yard located immediately adjacent to BNSF’s Logistic Park Chicago. This site will provide much-needed capacity in the Chicago market and help to avoid potential exposure to extended dwell as well as improve container accessibility.
Janel Group remains relentlessly optimistic as projects to improve capacity and movement are starting to make headway across The United States. Long Beach received a grant from USDOT to move forward with their Pier B rail project. This project would add 17 daily intermodal train departures and is expected to carry 35 percent of the container volumes coming through the port, up from between 20 percent and 25 percent currently moving on the rails. New York’s Port of Albany and South Brooklyn Marine Terminal, Georgia Ports Authority, the Port of Houston, Port of New Orleans, and Tacoma terminals have also been awarded grants for large improvement projects.