News
Industry Update – June 2022
Attention: Shipping Manager
Situation in USA and Canada:
Import volumes continue to increase at US ports and cargo is moving into the USA at a record-setting pace and is not expected to slow down anytime soon, despite the recent lockdowns in China. The ports of Long Beach and Los Angeles recorded one of their busiest April – May periods ever, even though year-over-year cargo volume decreased. However, the strongest performances took place at ports on the Gulf and East coasts.
Some carriers are having blank sailings to the USA for various reasons, including but not limited to, port congestion and reduced exports out of China. As a result, these blank sailings have helped reduce ship queues at ports. The queue off Los Angeles/Long Beach ports fell to 29 container ships last week. Meanwhile, the total number of ships waiting off East and Gulf coast ports was around 45.
Although freight rates remain high, more than quadruple pre-pandemic levels, we are seeing rates lower than they were a few months ago. Nevertheless, industry experts anticipate that peak season volumes, the end of China lockdowns and possible port labour unrest will cause freight rates to spike again in the second half of the year.
In addition, there are still major trucking issues across the US due to trucker and chassis shortages and fuel price increases. Ocean carriers are not offering trucking ex/to door, we have been utilizing outside truckers for recent shipments. However, due to the limited capacity, booking in LAX need to be booked 6-8 weeks in advance while in the Chicago area, it is currently 3-4 weeks in advance. Also, due to the current market and pricing situation, trucking prices are fluctuating and changing on a weekly basis.
Furthermore, due to the ongoing challenges with congestion, delays and drayage capacity across the country, some carriers will be increasing congestion surcharge for all exports out of the US to Australia.
(Source – American Shipper)
Situation in Europe:
In the UK, due to the current situation globally, fuel prices are increasing at an alarming rate. The fuel surcharge varies between hauliers but currently, we are expecting at least a 15% increase. Hence, trucking rates are expected to increase accordingly.
Northern European ports remain severely congested even before the peak season starts. There are hundreds of export containers built up at major hubs as carriers blanked a third of their advertised sailings during the recent two-month lockdown in Shanghai. Furthermore, these ports have utilized most of their off-dock overflow capacity for the long-term storage of thousands of customs-blocked Russia-destined containers.
Consequently, vessels are incurring delays in North Europe, which are affecting the schedules back to the Asia Pacific. Terminals at Rotterdam and Bremerhaven were reported to be the most severely congested, causing extensive berth waiting times and low productivity. Meanwhile, yard occupancy at Hamburg and Antwerp ports is currently at 90%. The situation is anticipated to deteriorate with a wave of import containers expected from Shanghai’s reopening.
(Source – The Load Star)
In addition, the port of Hamburg is experiencing disruptions with its rail freight services, the port cannot receive any more export trains for the time being due to a combination of factors including limited track capacity, delayed services and reconstruction works. For these reasons, all export trains were on hold near Hamburg over the weekend and limited train operations will persist until further notice. (Source – RailFreight)
Due to increasing fuel rates and limited space situations and high import and export volumes, carriers have been increasing pre-carriage rates substantially.
Situation in Asia:
- China – Shanghai lockdown ended
After two months of strict lockdown, Shanghai has started to reopen from 1st June 2022. A range of restrictions have been lifted and manufacturers can now operate without special permits or being restricted by closed-loop conditions. Nevertheless, it is anticipated that it will take weeks, if not months for everything to come back to normal for the industrial output volumes and the shipping container volumes.
Shanghai will remain a high risk area, with limitations and controls for trucks to get in and out of the city. Thus, trucking capacity in the Shanghai area is still very limited and trucking rates have been increasing significantly due to this reason. Increased congestion at the port of Shanghai is expected as export volumes will build up very quickly in the coming weeks.
(Source – The Load Star)
Situation in New Zealand:
The operational situation in Auckland port is improving, with vessel schedules expected to stabilise. As a result, some carriers will be removing the Auckland Congestion Surcharge from 1st June 2022.
Bunker Adjustment Factor (BAF) Increase from USA and Canada to Australia and New Zealand:
All carriers will increase their Bunker Adjustment Factors, effective 01st July 2022, from USA and Canada to Australia and New Zealand. The amount of increase varies from carrier to carrier, the highest being USD 612 per 20GP and USD 1224 per 40GP/HC.
IMO2020 Surcharge Increase from USA to Australia and New Zealand:
From 08th July 2022, IMO2020 surcharge will increase for all LCL cargo moving from the USA to Oceania, the new surcharge will be:
USD 25 per w/m or minimum
Airfreight Emergency Cartage Fuel Surcharge ex USA:
Further to our previous notice, Emergency Cartage Fuel Surcharge will increase to 31.75% effective 13th June 2022 on top of all airfreight inland pickups in the USA. Please note this surcharge fluctuates continually, so this is subject to change.
Melbourne Port Infrastructure Increase:
Melbourne Port Infrastructure surcharge will increase to AUD 195 per container, effective 1st July 2022.
Melbourne Empty Container Park Increase:
Melbourne Empty Container Park surcharge will increase to AUD 95 per container, effective 1st July 2022.
Fremantle Empty Container Park Increase:
Fremantle Empty Container Park surcharge will increase slightly, effective 27th June 2022. The updated Empty Container Park fee in Fremantle will be AUD 75 per container.
We will keep you updated with any further information.