Ahead of Asia’s Lunar New Year holidays, the market for ocean and rail was particularly congested, with high demand and rates.
With factories across China reopening this week, after the extended new year holidays, we expect to see demand for air and ocean space beginning to ramp up, probably from next week.
Sea freight demand from Hong Kong and Shanghai softened slightly ahead of CNY, but blanked sailings and omitted services, will likely tighten availability.
Xiamen, Ningbo, Qingdao, Tianjin, Dalian and Beijing are already tight for vessel space and we will watch the impact of blanked sailings closely.
Air freight has been coping well ahead of CNY, but there is tight and limited space in North China, mainly due to the Beijing Winter Olympics.
Ocean Freight
Anticipating a post-CNY slowdown carriers have been starting their roll-pool strategy and implementing multiple blank sailings in February.
- Freight rates showing slight increase
- Fuel and surcharges are rising and set to go higher in 2022
- Space and equipment availability remains tight and challenging to secure
- Schedule reliability still not great, with +5-8 days on average transit
- Delays now are mainly being caused by inefficiencies on the land-side
Air Freight
Demand for air freight continues to grow, amid a continuing congested ocean market and capacity will remain tight, with volatile conditions expected for the short term.
More ocean to air conversions, maintenance breaks for freighters, and the effects of Omicron on airline staffing are contributing to overall market congestion, that may lead to higher prices and longer transit times
- Rates have softened slightly going into the new year, but anticipate increases after CNY
- Fuel costs increasing and expected to keep rising
- Capacity reduced due to ongoing Covid outbreaks
- Main air freight options are still via freighters and regional hubs like the Middle East
- Congestion and delays at main hubs still in play
- Hong Kong COVID restrictions slash capacity
Overland (Road/Rail)
The European Road Freight Rate Benchmark shows that prices ended 2021 at historic highs across Europe, driven by a volatile mix of driver shortages over the year with supply chain congestion, supply shortages, cost increases and spiking demand from economic re-openings across the region.
This potent mix of factors, which pushed the Benchmark to record highs three times last year, shows few signs of relaxing in the immediate term.
Congestion in the rail market did ease slightly in December, but has increased again in the lead up to the CNY Holidays, with the lockdown of Xian City, one of the main origin rail stations causing the main congestion. There is ongoing disruption in Brest, Belarus and Malaszewicze, Poland, which is increasing transit times from China, with a minimum of 25-35 days to Germany.
We still have reservations about the viability of these services currently.
- Road haulage rates still increasing
- Road fuel surcharges being imposed at higher levels
- Ongoing truck driver shortages contributing to delays in delivery and transit times
- Train cargo space tight pre CNY due to lockdown of Xian City, a primary rail gateway
- Transit times extended with congestion at various hubs
- The rail situation is unpredictable and we suggest customers contact us for updates
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