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Market Update

Freight Market Update: December 21, 2021

Ocean and air freight rates and trends; customs and trade industry news plus Covid-19 impacts for the week of December 21, 2021.

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European Freight Market Update Live: January 4 at 16:00 CET / 15:00 GMT Get the latest on port congestion. Spend 30 minutes with our experts, including time for Q&A.

Ocean Freight Market Update

Asia → North America (TPEB)

  • Strong import volumes on TPEB are expected for the first half of 2022, according to some industry experts. The slight softening in rates and opening up of space that was seen post-Golden Week have reversed, as demand is high, capacity and pre-Chinese New Year sailings are limited, and rate increases are expected.
  • Rates Rate levels remain elevated and potentially large increases are expected for January due to strong pre-CNY demand; more shippers and importers are converting bookings from standard to premium.
  • Space Critical
  • Capacity/Equipment Critical/Severe Undercapacity
  • Recommendation Book at least 4 to 5 weeks prior to CRD. Consider premium options, which may be limited.

Asia → Europe (FEWB)

  • Space and equipment crunches continue as market demand consistently exceeds supply as rates stay very high for a long period. Space and equipment remain very tight due to frequent blank sailings and port omissions. Carriers are overcommitted and are limiting booking acceptance or rolling shipments. With continuous vessel delays and shifts, schedule reliability is very low and delays for pre-CNY sailings will have a significant impact into the post-CNY period.
  • Rates Rates remain stable at a high level. Most carriers extended their rates going into December. As we will be entering the traditional pre-CNY peak season soon, we anticipate that there will likely be rate increases in January.
  • Space Extremely critical space situation
  • Capacity/Equipment Severe equipment shortage across all Asia origins.
  • Recommendation Book at least 4 to 5 weeks prior to CRD. Consider premium options, which may be limited. Be flexible in regard to equipment.

Europe → North America (TAWB)

  • Schedule reliability is expected to deteriorate as winter weather batters the North Atlantic. Port omissions and change in port rotations will continue in the mid-term.
  • Congestion at USEC ports is manageable at the moment. Some lines are reinstating a Savannah call from January 2022. USWC remains heavily congested at both LA and LB despite improvement on the quay.
  • Rates Ocean rate levels remain stable but still extremely elevated.
  • Space Critical especially to the USWC
  • Capacity/Equipment Capacity remains tight for both North Europe and Mediterranean services. Better equipment availability at port; shortages remain at inland depots.
  • Recommendation Book 5 or more weeks prior to CRD. Request premium service for higher reliability and no-roll guarantees.

Indian Subcontinent → North America

  • Slight dip in demand as shippers raced to get their shipments loaded in late Nov. - early Dec. in time for the holiday season. This dip in demand won't last long as we are heading into the ISC regions traditional peak from January - April
  • Rates remain steady for December. Expecting rate increases to be implemented for January.
  • Space to the USWC is and will remain a challenge into 2022. Carriers are using port of loading omissions to normalize sailing schedules for the Transpacific trade. Unfortunately, this often means the ISC region is sometimes being omitted as a port of loading.
  • Space to the USEC is less challenging but we are still seeing port of discharge omissions at Savannah and Charleston on some services.
  • Equipment remains a challenge at smaller Indian ports in the South and South-East as well as inland container depots (ICDs). Equipment is normalized at key ports such as Nhava Sheva and Mundra.
  • Recommendation If routing to USWC, consider rerouting to USEC and transloading/trucking to final destination. Be prepared for delays during the upcoming peak season from January to April.

North America → Asia

  • Vessel arrivals and available capacity remain fluid for USWC POLs. USEC capacity has been more readily available; Deteriorating schedule integrity, in addition to creating void sailings and delays, is creating significant challenges with posted earliest return dates and vessel cut-offs at the port.
  • Rates January there are a number of substantial GRI advisories for select Southeast Asia and Oceania destinations.
  • Equipment Deficits on containers and chassis are still plaguing IPI origins. Availability for standard equipment at ports has not been an issue, but any special equipment is hard to come by.
  • Recommendation Please place bookings 4 to 6 weeks in advance to secure your equipment and vessel space.

North America → Europe

  • There is available capacity on the TAEB trade from the US East and Gulf Coasts. US West Coast service to Europe is extremely tight due to void sailings caused by systematic delays. Multiple TAEB service strings will be omitting Savannah and calling Charleston or Jacksonville instead, due to the significant congestion issues at the port of Savannah.
  • Rates to remain steady Some GRI activity for North Europe destinations to be implemented in January.
  • Equipment Deficits are still plaguing IPI origins. Availability for standard equipment at ports has not been an issue, but any special equipment is hard to come by.
  • Please place bookings 3 to 4 weeks in advance for East Coast/Gulf sailings and 6 weeks for Pacific Coast sailings.

Air Freight Market Update

Asia

  • N. China: The market is trending downwards this week due to the Christmas and New Year holidays, however this is likely to be a temporary dip and the market is expected to bounce back in the new year.
  • S. China: Like Northern China, the Southern China market is also trending downwards due to the approaching holidays but is anticipated to increase again in the new year.
  • Taiwan: The market continues to be very tight and space is sold out for pre-Christmas departures. For TPEB US west coast and east coast SFO and JFK are the most congested destinations, respectively. Overall market capacity is also very limited for the rest of the month.
  • SE Asia: Space ex-Northern Vietnam remains tight but is trending slightly better than Southern Vietnam. Demand to the US has decreased slightly but capacity continues to be constrained at all transit hubs. This trend is expected to continue until New Years however rates are maintained at the same levels. Ex-Southern Vietnam backlogs and delays are anticipated for the next two weeks. Heavy congestion at transit hubs continues to be problematic.

Europe

  • Demand begins to tail off as we approach Christmas, yet rates are still high from previous weeks demand surges.
  • Capacity continues to be more scarce than demand, but the more deferred routings where airlines have passenger capacity is driving some stability in the high rates.
  • Congestion is still manageable at AMS, and better in FRA. As usual, the weekends are always busier with export cargo, and any spikes in volume should be mitigated with the contingency plans in place at these airports.
  • Advice remains in place ex EU, continue to place bookings early for optimal rates and solutions. Consider smaller batches via air freight, as this is where these rates and solutions can be best optimized.

Americas

  • US export demand remains high, but it could potentially slow down during the last days of 2021. Larger shipments from major outbound gateways can take 2 to 4 days from booking to uplift into the EU, LATAM, or Asia.
  • US authorities lifted the ban on travelers from the EU in November, and European Airlines have been slowly introducing more bellyhold capacity. Additional capacity has also been deployed into LATAM.
  • TPWB and TAEB have not experienced cancellations due to the new COVID variant, but the situation is fluid and it could rapidly change in the upcoming weeks.
  • LATAM destinations are experiencing additional congestion due to the holidays and summer break.
  • LAX/ORD/JFK ground handlers continue to face backlogs and are using off-airport facilities to manage the flood of inbound cargo, which has a trickle-down effect on the export side. Many have shortened their free time for storage, and have implemented new, earlier close-outs for exports to accommodate longer throughput times and screening requirements.
  • Rates to Latam, Europe and Asia have seen seasonal increases, and will remain at these levels until the end of December.
  • Slightly higher transit times into top European hubs due to the current influx of cargo arriving to their terminals.
  • Recommendation Book early considering the current dwell time at airports.

Updates from Flexport's Customs & Compliance Team

HS 2022 Updates Will Be Effective after January 1, 2022

CBP has confirmed that the World Customs Organization Harmonized System Update will not be effective until after January 1, 2022. CBP is awaiting a necessary Presidential Proclamation and publication in the Federal Register. Until such action occurs, CBP will continue to use the current Harmonized Tariff Schedule.

CBP Allows for End of Year Immediate Delivery

Under 19 CFR 141.21(i), CBP has authorized Immediate Delivery (ID) procedures for merchandise to be released from December 16-31, 2021. Currently, ACE “is not programmed to process ID requests in Cargo Release nor Entry Summary,” so importers/brokers must make an ID request via the Document Image System (DIS).

Factory Output News

  • Mainland China By Jan 1 RCEP will take effect in 10 signatory members out of the total 15 which will bring close ties between China and ASEAN under the RCEP framework – further reduction in trade costs and expansion of trade items Source
  • Vietnam Container shortages and high logistics costs hit textile & garment exports. Vietnam to look at alternatives instead of reliance on international shipping lines Source
  • Thailand 2022 rice exports target to reach 7.5m tons with help of ample water supply and a weakened baht, however, container shortages and a lack of shipping space are expected to remain key risk factors Source
  • Singapore Non-oil exports increased by 24.2%, highest growth in the past decade Source
  • India In negotiations with Taiwan for a free trade agreement and the setting up of a semiconductor manufacturing facility in India. If successful, it will be the second of such facilities to be set up by a taiwan company in a foregin country. Source
  • Pakistan Leather and Leather Products increased by 8.86% YoY, rising above footwear which has traditionally been 60% of total exports out of Pakistan Source

Freight Market News

Intra-Asia Demand Causes Rates to Soar The Loadstar has reported that as factories reopen following recent lockdowns, intra-Asia tradelanes, from China to Vietnam, Thailand, Bangladesh, and Sri Lanka, are experiencing high demand and causing freight rates from China to skyrocket. At the same time, long-term rates from carriers are becoming increasingly harder to find, as forwarders in both China and Australia report only finding short-term rates.

Read More: Same, Better, or Worse: What's the Logistics Outlook for 2022?

White House Pushes Carriers to Accept Exports Amidst increased eastbound transportation rates and continued Asia-bound blank sailings, the White House has urged ocean carriers to accept more export freight and utilize less congested West Coast ports, according to FreightWaves. Several pieces of legislation, including the Ocean Shipping Reform Act of 2021 and a forthcoming Senate bill, will prohibit carriers from declining US exports within a reasonable time frame.

Freight Market Update is a complimentary service from Flexport, the modern freight forwarder. If you're not already a subscriber, we invite you to subscribe here.

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.

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