Rate & Market Information

Rates are expected to peak these two weeks of January and may slightly drop at the end of the month until first 2 weeks of February.

Main factor for elevated rates continues to be high consumer demand and congestions at US ports. Rates increased over the past few weeks but below peak back in August & September 2021.

Factories in China and Asia will start to close for Chinese New Year by end of January which hopefully will help ease the logjam of vessels to LA/LGB.

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Port / Space / Equipment Conditions

 Space situation ex China / Asia 

Port congestion and bottleneck problems getting worse: analysis

VESSEL delays in November 2021 have resulted in the removal of 11.5 per cent of the global shipping capacity, a slight improvement from 12.3 per cent from the previous month.

The latest issue of the Sea-Intelligence Sunday Spotlight looked at the data from the November 2021 issue of the Global Liner Performance report to calculate how much vessel capacity was being effectively removed from the market due to vessels being tied up on seemingly interminable queues around the world. It also used the bi-weekly customer advisories from HMM to calculate a terminal congestion index.

“Judging by the data, it seems that there is no sign of imminent improvement,” said Alan Murphy, CEO, Sea-Intelligence. He said that the normal state of affairs in the market is that two per cent of global capacity is “trapped” in delays somewhere, and that the data also clearly shows the sheer magnitude of the problem in 2021. “Basically, 2021 was a year where demand grew 7 per cent year-on-year (partly due to the downfall in early 2020) and at the same time capacity effectively was reduced by 11,” Mr Muphy said.

On terminal congestion for North America, the slight improvement after Golden Week was fully reversed by the end of 2021 and a new record was set on December 30, albeit with a slight improvement again on January 6, driven by improvements in Savannah and Charleston.

For Europe, the situation is steadily getting worse since the start of October, with no signs of any improvement – or even levelling out. “This also implies that we might well expect to see a continued upwards push on freight rates on this trade, as the congestion is likely to have a negative impact on reliability, and hence in turn on available capacity.”

Mr Murphy concluded that “all the available data shows that congestion and bottleneck problems are worsening getting into 2022, and there is no indication of improvements as of yet.”

Market News

Maersk warns cargo delays will persist

DANISH shipping giant AP Moller-Maersk has warned its customers it was still struggling to move goods around the world as the easing of congestion is taking longer than the company had hoped for. The pandemic has prompted shortages of container ships and logjams at ports at a time of very high consumer spending, meaning that hundreds of container vessels are lying idle outside ports, reports Reuters.

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Airfreight rates 'cool', but prices expected to remain high

AIRFREIGHT rates out of China to the US and Europe have plummeted after December’s record holiday season, reports London’s Air Cargo News. Prices out of China to the US peaked on December 13 at US$15.13 per kg, the highest rate ever recorded according to the TAC Index but have since fallen nearly 30 per cent to $10.68.

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Omicron hits another port city in China posing threat to supply chain

CHINA has detected omicron in a second major port city, deepening concerns of a wider outbreak at Beijing’s doorstep and raising the prospect that more foreign businesses might follow Toyota Motor Corp in halting operations along the northeastern coast. Chinese officials said last Thursday that at least one person has the more transmissible omicron variant in Dalian, a city of seven million, reports Bloomberg.

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The above information is for reference only. However, should you have any inquiries, please do not hesitate to contact us. 

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Disclaimer 

Although J.M. Rodgers Co., Inc. (JMR) makes reasonable efforts to obtain reliable content, JMR does not guarantee the accuracy of or endorses the views and opinions given by any third-party content provider. JMR disclaims all responsibility for any mistakes or inaccuracies in the information. Further, JMR disclaims all liability for loss or damage resulting from the use of information in this newsletter. 

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