Market Update: May 2017
Recent news and updates related to the ocean and air freight market for the month of May 2017.
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Ocean Rates for May 2017
Updated May 16, 2017
Other Ocean News
As indicated above, space remains tight from Asia-Europe and India-U.S. We strongly recommend booking your shipment at least 2 weeks ahead of time.
Traditionally, this is a time of year when carrier contracts are extended and modified. This may result in some changes and delays.
Congestion at the Port of Shanghai
At the beginning of the month, we were seeing major delays in and out of Shanghai due to port congestion. This has been steadily improving; most delays are now relatively minor.
Note: Even if your cargo isn’t departing from Shanghai, you may experience delays related to this congestion if your sailing is on the same string. For example, if your port of loading is Busan, and the ship calls Shanghai before docking at Busan, your departure out of Busan may be pushed back due to Shanghai congestion.
Some carriers are also experiencing equipment shortages. We recommend booking well in advance to avoid equipment issues.
Fixed rates -- act now
If you’re interested in fixed rates, talk to your Flexport team! These will be completed and finalized in the very near term.
Air Market Updates
The short version: Prices are high, and capacity is tight
Major airlines and airports in Asia are reporting significant increases in cargo traffic, which is keeping rates high. We expect rates to stay up in May. Space has been tight, and is likely to stay that way.
Factors impacting price and capacity
- E-commerce is booming, with a 28% year-over-year growth from 2016 levels.
- Many carriers have been performing fleet maintenance (scheduled and unscheduled) for their freighters, resulting in less capacity.
- As the new ocean alliances took shape, delays and blank sailings resulted in conversion of ocean shipments to air shipments.
We anticipate that these conditions will continue to impact the market in May, but they might start to ease toward the end of the month and into June.
Freight volume is up at key airports in Asia
Q1 numbers for many of the key airports in Asia show air freight volumes growing at their fastest clip in many years. Shanghai’s PVG airport reported volume growth close to 12% YTD, and Seoul’s ICN airport saw volumes grow at a similar pace. Taipei’s TPE airport saw volumes grow more than 8% year-over-year, and Hong Kong’s HKG airport also reported a very strong Q1 performance.
News from Flexport's LCL Service
By popular demand, our Flexport LCL service has added several new lanes:
**U.S. East Coast / Southeast **
U.S. Inland / Midwest
View the complete list of lanes for Flexport's in-house consolidation service here.
New 10-day service from Shanghai to Los Angeles
If you move LCL from Shanghai to Los Angeles, ask your Flexport team about our new Matson service! Matson is a premium carrier that offers 10-day guaranteed port-to-port transit time -- 5-7 days shorter than competing services on this lane.