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[June Market Report] Transpacific Rates and Space Situation Updates

Rate & Market Information

USEC port congestions have ramped up after USWC stabilizes. Rates remain solid and spaces are still tight due to limited capacity caused by blank sailings.

As lockdown situation relaxes in Shanghai starting this week, there are more truckers and terminal operators back to work.

There will be a rebound market as shippers will try to clear backlogs and start shipping for peak season orders. US ports will start becoming more congested in the months to come.
USWC spaces are mostly booked up to mid June ex Main Ports China while USEC spaces are booked up to end of June.

Spaces are getting tighter with increasing blank sailings and vessel delays. Most carriers also sets weight limitation to around 8 to 9 ton per TEU incl. tare for USEC shipments.

COVID-19 / Lock down situation in SHANGHAI

A three-phase recovery plan was announced on last Monday. 

Phase one, from Monday to Saturday this week, is to continue reducing new infections and preventing rebounds. Phase two, from May 22 to May 31, will transit the city’s emergency response status to normalized epidemic prevention,  and bus and metro service will gradually resume. 

Phase three, from June 1, the city will aim to fully normalize daily life and business activities, and a full open is expected  by late June. 

More depots have re-opened last week. Labour capacity at ports and terminals have returned to 70% and expect factories  will return to at least 60% production capacity starting in June. Trucking services in Shanghai and other cities including  Ningbo, Qingdao, Xiamen, Shenzhen and Guangzhou continue to face restrictions including the requirements of negative  test results, a health code or local pas. Barge services is recently growing as an alternative to the limited trucking capacity. 

BNSF cease rail service to Portland via Seattle/Tacoma 

Congestion is currently most severe in the PNW ports. IPI dwell in Seattle terminal remains high at 15+ days, while IPI  dwell off-dock in Oakland at +10 days, and IPI dwell steady at 8 days in LA/LB which is still the best gateway for IPI freight  despite multiple terminals reporting growing congestion at on dock rail. 

BNSF Railway has reported congestion in Chicago, Memphis, and Kansas City without enough chassis to move ocean  containers. The most trouble is still coming from PNW. BNSF will cease rail service between Portland and Seattle/Tacoma  wef 18 June. HMM has stop booking via Seattle/Tacoma to Portland tentatively until further notice. There is no evidence  that the service suspension will spread to a larger scale.

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Market News

Freight rates begin to rise as Shanghai slowly reopens for business

Chinese forwarders are seeing freight rates rise as factories re-open and goods start to move. “Factories are reopening bunch by bunch, upon approval, in the areas around Shanghai,” confirmed one local forwarder.

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'Bullwhip' ready to crack, as spot rates get a boost and Shanghai reopens

With Shanghai on the cusp of unlocking its manufacturing and unshackling frustrated container exports, spot rates from  Asia are set to increase in the coming weeks. 

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Blockbuster container shipping results collide with sinking sentiment

It’s still very expensive to ship containers full of goods across the oceans. Spot rates globally are still more than quadruple  pre-pandemic levels. But rates are now materially lower than they were a few months ago — and falling by the week. The  Shanghai Containerized Freight Index (SCFI) logged its 15th consecutive weekly loss on Friday. 

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Cargo backlog at Shanghai port could pile on airfreight pressure

COVID lockdown measures in Shanghai are drawing to a close but a backlog of shipping containers at the Port of  Shanghai could once again fuel airfreight congestion and demand, reports London’s Air Cargo News. 

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

For rate inquiries: jmr-rates@jmrodgers.com | For export operations & inquiries: jmr-export@jmrodgers.com | For ISF submission and status inquiries: jmr-isf@jmrodgers.com | For import operations & inquiries: jmr-docs@jmrodgers.com | For traffic-related issues: traffic@jmrodgers.com 

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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Jon Sabel is the marketing director at J.M. Rodgers Co., Inc. Jon enjoys sharing updates about the latest news in supply chain and logistics with customers and followers.