件名:[Freightos Weekly Update] Ocean rates fall as lockdown stretches on.
FREIGHTOS BALTIC INDEX UPDATE May 5, 2022
Hi there,
The last year was the tipping point for freight digitization as the industry embraced digital procurement at an unprecedented rate.
To that effect, first quarter bookings across Freightos grew over 300% year on year, while quarterly eBookings placed on WebCargo surpassed the six-digit mark for the first time in Q1, marking another important milestone for digital air cargo and a 350% increase compared to Q1 ‘21.
Now on to this week’s international freight update. Best,
Judah Levine Head of Research, Freightos Group
PS: Was this forwarded to you? Click here to make sure you get it every week. FBX Overview Asia-US West Coast prices (FBX01 Daily) fell 19% to $12,596/FEU. This rate is 104% higher than the same time last year.
Asia-US East Coast prices(FBX03 Daily) decreased 7% to $15,973/FEU, and are 144% higher than rates for this week last year.
The ongoing lockdown in Shanghai – as well as China’s Labor Day holiday that saw many factories across the country closed over the first half of this week – continued to make exports scarce. Meanwhile, COVID case counts climbed in Beijing and other cities raising the possibility of additional lockdowns. Government data released this week showed that manufacturing levels in April were at their lowest levels since just after the initial outbreak in 2020, and that national-wide freight volumes declined 15% compared to last April. Some ocean carriers announced additional blanked sailings for the end of May and into June, including to the US East Coast, but are attributing them to growing delays and congestion instead, as opposed to a response to falling demand for freight. Meanwhile, Robert Khachatryan, CEO of freight forwarder Freight Right reports that – for shippers with goods to ship – transpacific “capacity has improved dramatically. We have no issues finding space from Asia to the US.” As demand falls and space becomes available, ocean rates continued to fall this week. In addition, the past few weeks has seen the removal of many of the premium surcharges required for securing capacity. As a result, Asia – US West Coast rates dropped 19% to $12,596/FEU – their lowest level since July – and Asia – N. Europe rates decreased 3% to $10,565/FEU. Despite significant cancellations of Shanghai flights, air rates likewise have fallen due to the decrease in demand. Freightos Air Index Shanghai – North Europe rates have fallen 38% since the end of March to $7.37/kg, though this rate is more than triple pre-pandemic norms for this time of year.
The continued lull in ocean volumes will be a welcome chance for destination ports to clear some of the existing backlogs. But longer the lockdown lasts, the larger and the more concerning the coming surge of containers will become for those already-congested ports.
SEE THE DATA POINTS… (FREE) Please note that the rates reported and compared in the weekly report are FBX’s real-time daily rates – based on current rates being used by global logistics providers – for the day the report is released each week. Weekly averages are accessible free of charge at fbx.freightos.com and daily rates can be viewed on a subscription basis. Freightos, 350 Lincoln Road, Miami Beach, Florida 33139, United States Click here to stop getting FBX updates
Next week, we’ll be releasing a Freightos Group survey of digital connectivity top ocean and air carriers have developed with their customers, showing that pandemic-driven volatility accelerated carriers’ development of digital connections, making more progress toward end-to-end logistics data sharing.
Pre-register to receive the report directly to your inbox here.
Now on to this week’s international freight update. Best,
Judah Levine Head of Research, Freightos Group
PS: Was this forwarded to you? Click here to make sure you get it every week. FBX Overview Asia-US West Coast prices (FBX01 Daily) were stable at $15,817/FEU. This rate is 168% higher than the same time last year.
Asia-US East Coast prices(FBX03 Daily) fell 3% to $17,148/FEU, and are 192% higher than rates for this week last year.
The two-phase lockdown in Shanghai that was meant to end today is being extended indefinitely as the latest outbreak is not contained and a massive testing campaign continues. The extension of the Shanghai shutdown is resulting in a larger disruption than anticipated. Though Shanghai’s air and ocean ports remain open, labor shortages are slowing operations. In addition, the availability of goods has dropped significantly as manufacturing and warehouses are closed, and trucking is increasingly limited due to quarantine rules and travel restrictions. With limited goods available to ship, air cargo demand out of Shanghai is decreasing quickly. In response, air carriers are canceling flights. Despite the drop in demand, the reduction in ground handling and capacity appear to be enough to push rates up: Freightos Air Index (FAX) Shanghai – N. Europe rates hit $11.92/kg last week, a 43% increase compared to just before the recent outbreaks and well above the pre-pandemic norm of about $2.35/kg In ocean logistics, Shanghai ports like Yangshan are reportedly operating at only 50% capacity both because of labor shortages and a lack of available goods. As a result, some shippers are shifting to alternate ports like Ningbo when possible, and there are reports of carriers omitting Shanghai port calls. These developments are resulting in growing backlogs of ships not only in Shanghai, but in Ningbo as well. Last year’s outbreak at Shenzhen’s port of Yantian slowed operations by more than 70% there for nearly a week, and resulted in a 20% spike in ocean rates to the US and Europe. So far, ocean rates to the US have remained stable, down by just 3% since the outbreaks began. This dip could be due to the drop in available goods. When operations rebound, we can expect some surge in shipments and possibly an increase in rates – though in the Yantian example ocean prices began to climb shortly after the shutdown began. Most indications are for strong transpacific volumes in the coming months, including some pull forward of summer demand to get ahead of peak season congestion and fears of West Coast labor disruptions. But there are also growing signs that consumer demand – the underlying driver of congestion and sky-high rates – is beginning to wane as a result of inflation.
Spiking costs already appear to be contributing to a decrease in European demand. Since late January, even with worsening congestion at major European ports, Asia – N. Europe prices have decreased 20% to $12,050/FEU – the lowest level since July. SEE THE DATA POINTS… (FREE) Please note that the rates reported and compared in the weekly report are FBX’s real-time daily rates – based on current rates being used by global logistics providers – for the day the report is released each week. Weekly averages are accessible free of charge at fbx.freightos.com and daily rates can be viewed on a subscription basis. Freightos, 350 Lincoln Road, Miami Beach, Florida 33139, United States Click here to stop getting FBX updates
Next week, we’ll be releasing a Freightos Group survey of digital connectivity top ocean and air carriers have developed with their customers, showing that pandemic-driven volatility accelerated carriers’ development of digital connections, making more progress toward end-to-end logistics data sharing.
Pre-register to receive the report directly to your inbox here.
Now on to this week’s international freight update. Best,
Judah Levine Head of Research, Freightos Group
PS: Was this forwarded to you? Click here to make sure you get it every week. FBX Overview Asia-US West Coast prices (FBX01 Daily) were stable at $15,817/FEU. This rate is 168% higher than the same time last year.
Asia-US East Coast prices(FBX03 Daily) fell 3% to $17,148/FEU, and are 192% higher than rates for this week last year.
The two-phase lockdown in Shanghai that was meant to end today is being extended indefinitely as the latest outbreak is not contained and a massive testing campaign continues. The extension of the Shanghai shutdown is resulting in a larger disruption than anticipated. Though Shanghai’s air and ocean ports remain open, labor shortages are slowing operations. In addition, the availability of goods has dropped significantly as manufacturing and warehouses are closed, and trucking is increasingly limited due to quarantine rules and travel restrictions. With limited goods available to ship, air cargo demand out of Shanghai is decreasing quickly. In response, air carriers are canceling flights. Despite the drop in demand, the reduction in ground handling and capacity appear to be enough to push rates up: Freightos Air Index (FAX) Shanghai – N. Europe rates hit $11.92/kg last week, a 43% increase compared to just before the recent outbreaks and well above the pre-pandemic norm of about $2.35/kg In ocean logistics, Shanghai ports like Yangshan are reportedly operating at only 50% capacity both because of labor shortages and a lack of available goods. As a result, some shippers are shifting to alternate ports like Ningbo when possible, and there are reports of carriers omitting Shanghai port calls. These developments are resulting in growing backlogs of ships not only in Shanghai, but in Ningbo as well. Last year’s outbreak at Shenzhen’s port of Yantian slowed operations by more than 70% there for nearly a week, and resulted in a 20% spike in ocean rates to the US and Europe. So far, ocean rates to the US have remained stable, down by just 3% since the outbreaks began. This dip could be due to the drop in available goods. When operations rebound, we can expect some surge in shipments and possibly an increase in rates – though in the Yantian example ocean prices began to climb shortly after the shutdown began. Most indications are for strong transpacific volumes in the coming months, including some pull forward of summer demand to get ahead of peak season congestion and fears of West Coast labor disruptions. But there are also growing signs that consumer demand – the underlying driver of congestion and sky-high rates – is beginning to wane as a result of inflation.
Spiking costs already appear to be contributing to a decrease in European demand. Since late January, even with worsening congestion at major European ports, Asia – N. Europe prices have decreased 20% to $12,050/FEU – the lowest level since July. SEE THE DATA POINTS… (FREE) Please note that the rates reported and compared in the weekly report are FBX’s real-time daily rates – based on current rates being used by global logistics providers – for the day the report is released each week. Weekly averages are accessible free of charge at fbx.freightos.com and daily rates can be viewed on a subscription basis. Freightos, 350 Lincoln Road, Miami Beach, Florida 33139, United States Click here to stop getting FBX updates
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