15th August GRIs are here to stay. Base port China to AUEC pricing with some carriers is now sitting in excess of USD4200 per FEU.
Pricing is offered on short validity - some carriers are offering week-to-week rates. Biweekly is currently the standard.
Rates into Fremantle and Adelaide have increased rapidly. 2H August pricing is now not far behind the East Coast, with minimal capacity. OOCL pushed through a GRI of USD1000 per TEU into FRE/ADL, with all bookings that did not accept the increase, recalled.
Some carriers have indicated that an additional GRI of USD300 per TEU will be released from 1st September. We are now creeping close to COVID rate levels.
MSC has announced a 1st September GRI of USD500.00 per TEU for all cargo ex NEA & SEA to Oceania.
Hapag Lloyd has announced a 22nd August GRI of USD500.00 per TEU for all cargo ex China, Japan, South Korea, Hong Kong and Macau to Melbourne, Sydney, Brisbane, Adelaide and Fremantle.
There is no sign that this situation will improve this side of Christmas. Customers must be booking 3-4 weeks in advance, and working with carriers that can provide space, rather than seeking below-market rates. In the current climate, price negotiations are not only unreasonable but improbable. The carriers are full and/or rolling bookings - they have no appetite to discuss low-margin pricing. Space is king.
Capacity:
Blank sailings and smaller vessels into Oceania have reduced the market loading capacity by 30%.
A3 service is blanking this week (13th August), ex North East China.
CAT service is blanking this week (15th August), ex South China
NEAX service is blanking next week (21st August), ex South China
A severe shortage of empty equipment is causing problems in China, particularly in Shenzhen. Some carriers are not releasing equipment until the eleventh hour, with demands to collect empties within very short time frames or risking EIR being invalidated.
Space is becoming limited in SEA ports - with TH/MY/VN all showing signs of a tightening market.
Schedule Reliability:
Ningbo port has been closed after an explosion on the Yang Ming vessel, YM Mobility. The container held refrigerated organic peroxides, a reactive chemical which is highly combustible and liable to exothermic decomposition, which causes heat that rises as the outside temperature increases. The situation is being monitored, and the port will be closed until further notice. This will no doubt cause additional delays at one of China's busiest ports.
MSC has reduced its sailings operating out of Singapore to improve overall vessel schedule reliability and avoid ongoing congestion at the port.
Overall, schedule reliability has shown a modest improvement. 93% of vessels are set to sail as scheduled over the next 5 weeks, on average.
Transshipment ports continue to be monitored. While we see some minor improvements in Singapore; Tanjung Pelepas and Port Klang remain congested.
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Port Congestion:
Singapore congestion is improving as carriers are omitting the port.
Barcelona & Valencia continue to experience congestion due to Red Sea woes.
Port strikes in Hamburg and Bremerhaven are possible if the negotiations do not go well on 22nd August. Hamburg is showing signs of high congestion.
The port of Rotterdam is also impacted by ongoing congestion. This is leading to missed port calls due to berth availability.
India's Mundra port is strained under rising container dwell times & heavily congested yards. This also extends to delays on the rail network of 15-20 days.
LCL:
While the FCL market continues to be extremely volatile, LCL offers some stability to Australian importers and exporters.
We offer stable and competitive pricing and regular sailings globally.
We have direct sailings ex China, Vietnam, Hong Kong, India, Korea, Singapore, Taiwan, and Thailand to the East Coast.
With secured sailings and opportunities to negotiate on regular business, LCL offers your business an alternative that can work in a very fluid market.
Carbon Emissions & Sustainability:
Carbon emissions remain high in international shipping. Cargo shipping contributes to more than 7% of the world's total emissions. This equates to more than 2 billion tons of CO2.
With emission reporting now becoming a commonplace occurrence in most businesses, how are you managing your environmental impact?
Explorate partners with SeaRoutes and Cloverly to support our customers in their sustainability goals. As part of our commitment Explorate automatically reports the emissions cost for every shipment you upload to the platform. We also provide a cost to offset. Report - Offset - Share. Start your sustainability journey today.
USA/Canada Market:
The ILA (International Longshoremen's Association) is preparing for an early October strike at their US East and Gulf Coast Ports. With the current agreement expiring on 30 September, contract negotiations have yet to begin. Any strike action will have significant impacts on the US economy and supply chain operations.
Canadian rail worker strikes threaten to derail local supply chains. Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. warned Friday that lockouts on Aug 22 are imminent unless new contracts with their employees can be secured.
The Panama Canal is on its way to normal operating conditions. Effective immediately, vessels transiting the neopanamax locks are now allowed a maximum authorized draft of 14.94 meters (49.0 feet) of Tropical Fresh Water. The ACP said the decision is based on the current and projected water levels of Gatun Lake for the upcoming weeks. As of August 5, the number of daily transits has been adjusted to 35, up from 34 as of July 22nd and 32-33 earlier in the month.
Rates on the TPEB trade have softened in recent weeks to balance supply and demand. Carriers are now announcing rate increases for 2H August.
The Drewry WCI reflects a rate of USD6501/ FEU ex CNSHA - USLAX (up 175% YoY), with the East Coast sitting at USD8931/FEU ex CNSHA - USNYC (up 166% YoY)
PSS (peak season surcharges) are being implemeted on the trans-atlantic trade. Mediterranean Shipping Co. imposing a $1,000 per FEU surcharge, Hapag-Lloyd setting theirs at $800 per FEU, and other carriers following suit with varying increases. The increases will take effect on 1st September, 2024.
Europe Market:
Maersk and MSC have reduced port calls in Europe on upcoming sailings to avoid congestion after ocean shipping demand from China to North Europe. This is in a bid to improve schedule reliability on the FEWB trade.
Data this week from Xeneta and Container Trade Statistics shows 800,000 TEU shipped from China to North Europe in June – a record monthly figure on this trade.
While rates have dipped slightly, the Drewry WCI ex CNSHA to NLRTM sits at USD7929 per FEU on 08th August. This figure is up 374% YoY.
The Alliance has announced three blank sailings for September due to vessel delays in the FEWB trade. This is further limiting the overall capacity for this routing.
Rotterdam & Hamburg are experiencing port congestion which is delaying berthing for some vessels.
Airfreight Update:
Bangladesh airfreight pricing is surging amid political unrest. Data from WorldACD shows that in the week from Monday July 29 to Sunday August 4 (week 31), spot rates were $4.87 a kilo. “That figure of $4.87 a kilo is almost three times (+173%) the equivalent week last year,” added WorldACD.
Carriers are expecting a surge in volumes in late August due to peak season constraints.
The Baltic Air Freight Index for the week to 29 July had rates to Europe and the US out of India also up, with WorldACD noting Europe-bound services from Bangladesh (at $4.59/kg), India ($3.54), and Sri Lanka ($3.20) up 178%, 161%, and 78%, year on year. Xeneta’s July report noted that Southeast Asia to Europe and North America spot rates also more than doubled compared with last year, at $3.85 and $5.78 per kg, respectively. But on the north-east Asia to Europe and North America trades it noted a more muted, albeit no less impressive, 30% year-on-year increase for average spots, of $4.17 and $4.39 per kg, respectively, which it said was “partly due to a high base last year”.
Import pricing out of China remains stable at present. Space is available, however, forward booking is encouraged.
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