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Market Update

Freight Market Update: November 23, 2021

Ocean and air freight rates and trends; customs and trade industry news plus Covid-19 impacts for the week of November 23, 2021.

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Flexport Fireside Chat | Bringing Logistics Tech to Toronto: A Conversation with CEOs November 30 at 8:00 AM PST / 11:00 AM EST

As supply chains enter a new era of innovation, Flexport Founder + CEO Ryan Petersen shares his frontline insights on the future of Canada in global trade.

The State of Trade | The Year Ahead in Supply Chains: Forewarned is Forearmed December 1 at 9:00 AM PST / 12:00 PM EST

This past year in logistics has been volatile and challenging. To help you prepare for what comes next, our experts will discuss several potential scenarios and how logistics teams can ensure resiliency against the ongoing disruption in 2022.

North American Freight Market Update Live: December 2 at 8:30 AM PST / 11:30 AM EST

Get the latest on port congestion. Spend 30 minutes with our experts, plus ample time for Q&A.

Ocean Freight Market Update


Asia → North America (TPEB)

  • Pre-Chinese New Year forecasts are strong on TPEB as importers vie for space in upcoming weeks. Increased demand and reduced capacity keeps rates at elevated levels. High demand is expected to run into 2022-2023 contract negotiation season. Congestion at LA/LB and Savannah ports remains severe and is expected to worsen in Vancouver due to recent flooding. Vessel bunching and congestion continue to negatively impact capacity and schedule reliability.
  • Rates A few carriers implemented GRIs for 2H November; TBD for 1H December. Rate levels remain elevated, and premium demand outlook is strong.
  • Space Critical
  • Capacity/Equipment Critical/Severe Undercapacity

Europe → North America (TAWB)

  • USWC remains heavily congested at both LA and LB.
  • Congestion at USEC ports is still impacting mainly vessels going to Savannah. Other carriers are switching to Charleston instead.
  • Rates November rates are set to remain strong for both USEC and USWC. PSS increases for USWC ports have been announced by a few lines.
  • 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

  • Capacity to the West Coast is severely limited as ocean carriers continue to omit ports like Nhava Sheva in an effort to right wronged schedules caused by global delays.
  • Rates expected to hold through the remainder of 2021
  • Space remains a challenge as global congestion results in omissions and altered sailing schedules. LA/LB, Savannah, and most recently Charleston are being hit the worst with berthing delays.
  • Equipment of all types are in deficit. Carriers are replenishing equipment to main import/export ports on priority.
  • Recommendation Use premium services on urgent shipments and shipments with CRD approaching. If routing to USWC, consider rerouting to USEC. Be flexible with inland container depot (ICD) location and equipment type.

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 Reefer GRIs for November have been implemented at full amounts. For December, there are multiple GRIs likely to be implemented for India destinations requiring transshipment as well as GRIs for destination Australia.
  • 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. There are 3 TAEB services that will be omitting Savannah and calling Charleston or Jacksonville instead, due to the significant congestion issues at the port.
  • Rates to remain steady for November.
  • 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 relatively stable from the week prior and is expected to continue through the end of the month. Rates have increased slightly due to the month-end rush as well as some flight cancellations. Ad-hoc space in the market is still available at higher rate levels.
  • S. China: The market situation ex-South China remains the same as the previous week. Capacity is tight as some PAX flights are still cancelled. Rates for both TPEB and FEWB lanes have increased, especially for FEWB. Some carriers have also announced flight cancellations ex-HKG/CAN. Ex-CAN airlines continue to reject large shipments or provide longer transit times of up to 3 weeks.
  • Taiwan: The market continues to be very tight and space constrained. Space to the US east coast is booked through the end of the month. Ad-hoc super express rates may still be available for some cargo types, but volumetric pallets will have to wait until mid-December for space confirmation. US west coast space is also filling up quickly with some palletized cargo needing to wait until week 49 for space. For FEWB, AMS space is booked for the month. The earliest available flights for palletized cargo are likely during week 49. Both EVA Air and China Airlines are planning to resume direct flights to LHR in December but official announcements are still pending.
  • SE Asia: Space is extremely tight ex-Southern Vietnam with carriers rejecting palletized cargo. As a result of the capacity situation in SGN, some larger volumes are being routed through northern-Vietnam for uplift which is in turn constraining capacity ex-HAN as well. Large export volumes are anticipated for the year-end holiday season and space is expected to only become more critical.

Europe

  • Demand continues to be high and is expected to continue until mid-December
  • Air capacity from Europe to the US has increased during the last 2 weeks thanks to relaxed travel restrictions. However the recent COVID outbreaks and new regulations being implemented in Europe are likely to negatively impact Transatlantic belly capacity and, therefore, pricing.
  • Airport terminals all over Europe continue to be congested and we expect this congestion to last until the end of the year. Terminals are facing backlogs of hundreds of ULD (some sitting airside) negatively impacting all freight forwarders transit times. To cope with this, terminals are hiring additional temporary staff, implementing new processes and rethinking their infrastructure.
  • Advice continues for all trade lanes ex EU: Place bookings as early as possible for most optimal rates and routing solutions

Americas

  • US export demand will remain at high levels until Thanksgiving. 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, and European Airlines are slowly introducing more bellyhold capacity. Transatlantic cargo capacity has increased in the last 2 weeks, but is still down compared to pre-pandemic levels.
  • 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 from the US to LATAM and some Asia destinations remain at high levels. Rates into Europe have not experienced significant changes.
  • Fuel surcharges have increased during the last weeks.
  • Slightly higher transit times into top European hubs due to their current labor shortage and high throughput time.
  • Recommendation Book early considering the dwell time at airports.

Updates from Flexport's Customs & Compliance Team

Congress Announces a Path for Trade Policy Bill Compromise

Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY) announced that the Senate’s US Innovation and Competition Act of 2021 and various House trade policy bills will go to conference to reconcile differences from both chambers of Congress. A new bill could incorporate elements of GSP/MTB renewal, Section 301 Exclusions, among other relevant trade topics. The two leaders neglected to announce a deadline for when the talks would conclude.


Factory Output News

  • Taiwan Taiwan manufacturing value hit a new record last quarter -- NT$4.19 trillion (US$150.47 billion), the growth is expected to continue for this quarter. Source
  • Taiwan Taiwan government is monitoring consumer prices for essential and popular goods, ready to intervene if necessary. Source
  • Thailand Thailand is opening doors to more foreign workers to revive the economy. Source
  • Sri Lanka Sri Lanka’s merchandise export hits US$1.16Bn, Exports to the US in the first ten months of the year have increased by 18.1%. Source
  • Austria Austria re-imposes a full Covid lockdown and makes vaccination mandatory as from Feb 1st. Source

Freight Market News

LA/LB Dwell Fees Postponed Again The new dwell fee set to go into effect today at the Ports of Los Angeles and Long Beach for containers dwelling more than nine days has been postponed again. The date for reconsideration has now been extended to November 29 at the earliest according to the Long Beach Business Journal. Since the fee was first announced, dwelling containers at both ports have decreased 33%.

Read More: The Start of a Plan to Clear LA/LB Port Congestion

Ship Fuel Prices Hit All-Time Highs FreightWaves reports the gasoline prices for container ships, tankers, and dry bulk carriers are at their highest since 2013. Very low sulfur fuel oil (VLSFO) prices at the world’s top 20 ports are up 47% this year alone, while the less expensive high sulfur fuel oil (HSFO) prices are up 43%. Most ships switched to VLSFO to comply with IMO 2020, but those with exhaust-gas scrubbers can continue to burn HSFO making it more valuable now to be equipped with a scrubber.

Read More: Port Workers Portray the Reality of Bottlenecks

Rail Freight Increasing for China-EU Between January-October of this year, rail trips between China and Europe were up 26%, and total TEU carried was up 33% YoY. The Loadstar reports, however, rail has still seen operational problems and delays. New rail routes may be considered as challenges continue.

Read More: What Will It Take to Unsnarl Trucking in Europe?


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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