Call us on +44 (0)1784 466050

Asia supply chain update

The peak season look set to continue to Chinese New Year in February, with more price rises and blanked sailings are on the way.

Sea freight rates from China and the Far East are reaching some of the highest levels ever seen, while equipment shortages persist and schedule reliability continues to fall.

We are seeing some shippers, desperate to get cargo away, switching to air, which is quickly driving up rates on a mode that had been enjoying some stability.

The trade press reported how “carriers are failing, neglecting customers, providing sub-standard services and increasing rates, driving customers to switch to air freight, even at $7 a kilo, for a level of security and certainty, that is simply not available on the ocean.”

Air capacity from Asia to Europe is still constrained and scheduled freighter operators are full, with many working through a backlog of cargo.

The rising air rates does appear to be attracting more capacity to the markets, with KLM, Qatar and Lufthansa increasing the number and frequency of flights, although many are already booked.

Heathrow and Benelux hubs remain congested and Shanghai also faced some delays for large shipments.

In the strangest of markets, it is no longer just about rates, it is often about making sure  customers get their goods and keep their supply chains running.

Some shipping lines have been cancelling confirmed bookings from the middle of this month, signalling a $1,000 per teu increase from December, while saying that no bookings can be confirmed.

Capacity will continue to be tight throughout December and even up to Chinese New Year. If volumes rise further, as a result of the critical ocean situation, it could become a very heavy and sustained peak.

We work very closely with the world’s largest cargo airlines to offer consistent and reliable transits at competitive rates. 

If you have any questions regarding these developments or the general market and would like further information, updates, or the latest market pricing please contact me or my team.