Ocean Freight Market Update

Asia → North America (Transpacific Eastbound)

• Rates: Lowered.
• GRI Mar 1: None.
• Capacity: Recommend advance booking notice at least 21 days prior to CRD.
• Notes: Space and equipment is opening up at FAK rate levels, with the most openings from Greater China (i.e., China Base Ports) to and via PSW (i.e., terminating in LA, or via LA to IPI locations). Loading on these lanes is occurring at FAK levels—please reach out to Flexport for help with market opportunities that have emerged!

Asia → Europe (Far East Westbound)

• Rates: Extended
• GRI Mar 1: Mostly extended until mid-March and some slight reductions
• Capacity: Recommend advance booking notice at least 21 days prior to CRD.
• Notes: Rates remain at high but stable levels expected to persist into March. Following CNY impact we are now able to see volume recovery from week 9 and 10 onwards. Equipment shortage remains a challenge in the coming weeks. We have some possibilities to take on more FAK cargo at FAK-rate levels. Some carriers are also accepting limited UK cargo again.

Europe → North America (Transatlantic Westbound)

• Rates: Increasing
• GRI March 1: Implemented
• GRI March 15 Likely Implemented
• Capacity: Recommend advanced booking notice at least 5 weeks prior to CRD.
• Notes: We recommend booking urgent cargo on Premium. The market is expected to remain strong through the end of Q2 due to high demand and capacity constraints. Expect further rate increases in April.
• Supply remains extremely tight across Europe. There are shortages of Reefer containers and 40’/HC dry, in particular in Germany, Italy, Spain and Portugal. Ongoing severe equipment deficit in Turkey.
• Port congestion: Increased vessel wait time in Savannah with several ships anchored outside the port. New York and LA/LB remain highly congested.
• Capacity development: upcoming blank sailings on the AL1, AL5 and AL6 service between week 9 and week 14. Expect void sailings to continue through March/April as carriers try to recover schedule reliability.

India → North America

• Rates: Increasing
• GRI March 1: Implemented
• Capacity: Space is extremely full and rolling to USWC. Space is tight to USEC. Transhipment at SIN/CMB has 1-3 week delays.
• Equipment: Shortages reported in Mundra and Delhi regions. Equipment shortages continue to be an issue—please make bookings in advance so forwarders can plan for container availability at your local ICD/wet port. Consider moving 20GP instead of 40GP/HC. Recommend utilizing premium services to secure equipment faster.

North America → Asia

• Rates: Increasing
• GRI March 15—A few carriers announced increases for Asia and a substantial GRI to Australia/New Zealand.
• GRI April 1—One carrier has announced an additional GRI for Asia.
• Capacity: Recommend advanced booking notice 10-14 days prior to CRD at Port.
• Capacity: Recommend advanced booking notice 10-14 days prior to CRD at Rail Ramp.
• Chassis availability is tight at most major ports and rail ramps. Recommend factoring in more lead time for truckers to procure chassis.
• Vessel congestion is severe on the US West Coast and problematic on the East Coast. Schedules continue to see delays causing the posted container return days to constantly change.

North America → Europe

• Rates: Steady
• Port congestion along the US East Coast and in North Europe impacts vessel-schedule integrity for all services, causing capacity to be lost week to week as ships try to make up time. We urge booking sooner to help ensure coverage for bookings.
• Capacity: Recommend advanced booking notice 10–14 days prior to CRD at port.
• Capacity: Recommend advanced booking notice 10–14 days prior to CRD at rail ramp.
• Chassis availability is tight at most major ports and rail ramps. Anticipate more lead time for truckers to procure chassis.

Air Freight Market Update

Asia

• China is getting back to full steam after a slow start post CNY. Rates continue to climb especially in PVG as HKG still suffers from soft demand and extra sections of capacity.
• Other Asia markets continue to be very strong with TPE, SGN, HAN and BKK showing strong demand amidst a capacity shortage.
• BKK is experiencing severe terminal delays resulting in much cargo missing assigned flights. Tendering cargo to Bangkok Flight Services (BFS) is taking over 24 hours with the TG Terminal being marginally faster but still slower than normal.

Europe

• Rates remain at elevated levels as capacity ex Europe to Asia and North-/South America is constrained. Carriers report high load factors from all major outbound hubs in Europe, mainly driven by high demand from the automotive & manufacturing and pharma industry verticals during quarter end.
• Main airports in E.U. are fully operational, but report backlogs caused by large volumes ex Asia, creating a negative domino effect with throughput delays on the outbound side.

Americas

• Exports from the U.S. continue to grow, outpacing available capacity to Europe, LATAM and Asia from all major U.S. hubs. Carriers report back very high load-factors and see capacity booked out as far as 5-7 days at time of booking.
• LATAM SB continues to see strong demand with rolling backlogs reported to destinations such as Chile, Brazil, Argentina. Capacity to Central America remains heavily constrained.

Factory Output News

Europe Alibaba is entering the European market, using Liege, Brussels as a gateway. The Chinese tech giant handles more than 80% of the parcels purchased through its platform AliExpress. The Chinese company’s move may challenge Amazon’s position in Europe. [source]

South Korea outbound shipments are up 9.5% from the previous year at $44.81 billion last month. The average daily export volume increased 26.4 percent to reach $2.3 billion. [source]

Vietnam The country’s General Statistics Office reports trade surplus over two months; export turnovers of nearly USD 48.6 billion and import turnovers of roughly USD 47.3 billion in the first two months of this year, with a trade surplus of around USD 1.3 billion. The Office also reported an increase in YoY revenues for both exports (+23.2%) and imports (+25.9%). [source]

Cambodia COVID-19 cases spike after Chinese Nationals break quarantine. Cases have reached over 741 compared to 484 prior to the outbreak. This is the country’s 3rd and largest community outbreak since the pandemic started. [source]

Philippines COVID-19 vaccination campaign launched amid supply problems and public resistance. [source]

Updates from Flexport's Customs & Compliance Team

Nominated USTR Opening Statement

The Office of the U.S. Trade Representative (USTR) on February 24th released the opening statement of Ambassador-designate Katherine Tai to the Senate Finance Committee. In her statement, Tai outlines her priorities, including rebuilding international alliances and partnerships, implementing and enforcing USMCA (the new trade deal between the U.S., Mexico, and Canada), developing strategy to combat “China’s unfair trade practices”, and using trade to address climate change and the Covid-19 pandemic.

Economic highlights from Flexport Chief Economist Dr. Phil Levy

• US personal income leapt from December to January. Overall income was up 10.0%. The dollar gain in income, $1,954bn, closely matched the increase in government social benefits, $1,977bn, and had relatively little to do with an increase in employee compensation, $87bn.
  • Consumers saved the windfall. Of the monthly boost in disposable income, over 82% went to increased saving, while just over 17% went to personal consumption expenditures.
  • Core inflation moderate. The price deflator for Personal Consumption Expenditures, a key Fed indicator rose by 1.5% over a year earlier.
• US durable goods orders rise 3.4% in January over December, beating expectations.

Freight Market News

D+D Fee Protests Call on Congress The Agriculture Transportation Coalition, one the largest US shipper associations, has renewed its call for the enforcement of Federal Maritime Commission guidelines on detention and demurrage fees. The Loadstar reports the AgTC executive director expects Congress to take action.

US West Coast Port Congestion Persists The number of vessels anchored outside Los Angeles and Long Beach, CA, remains high at more than 30 waiting to enter ports. Bloomberg reports the average wait for berth space is 7.7 days, down from 8 days in mid-February.

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Please note that the information in our publications is compiled from a variety of sources based on the information we have to date. This information is provided to our community for informational purposes only, and we do not accept any liability or responsibility for reliance on the information contained herein.