Freight market review July

Air, ocean and rail supply chains from Asia continue to be impacted by high demand levels, increasing rates and falling service reliability.

We recommend that shippers contact us to discuss their requirements, or place bookings, at the the earliest opportunity, to secure the best rates, equipment and availability.

Ocean
Global demand is forecast to outstrip container shipping capacity this year and into next, with volume growth of 7% against capacity growth of 4% and the potential for infrastructure disruption expected into next year.

Spot rates from China to North Europe were up 636%, compared to 2019 and despite the record rate levels, demand is so strong and capacity so limited that carriers can impose additional charges, reaching thousands of dollars per container, without any real guarantee that space will follow.

Global schedule reliability fell to 38.8% in May, down from 39.1% in April and from 74.8% in May 2020, largely as a result of significant congestion in many places around the world.

The peak season ahead of the holidays will need to be muted, in order for the industry to catch up, but that’s not likely to happen, as we expect shippers will book their space ahead of the traditional peak season start and this peak season is very likely to last longer than normal.

The average delay for late vessel arrivals had been improving since March, but in May 2021 the average delay increased to 5.86 days.

The number of vessel arrivals subject to extreme delays (>7 days) on the Asia-North Europe trade lane was 461 in January to May 2021, of which 134 were more than 14 days late, and 30 were more than 21 days late.

Air
May and June would usually be a quieter period for Asia and US air freight and while both markets were a little subdued for a few weeks, rates have started to pick up and there are general rate increases planned by major airlines, which indicates a pickup in demand and capacity is now under pressure.

The typical peak season for air freight is from the middle of August until the middle of December and we are anticipating a busy time, with volumes already beginning to increase from the Indian subcontinent, China and Hong Kong. The market likely to be very busy by August.

While several carriers have begun reconverting ‘preighter’ aircraft for normal operations, other carriers are converting aircraft for cargo operations, so the hope is that balance will be maintained and, if we’re fortunate, some new capacity will be added.

With demand already growing ahead of this year’s ‘normal’ peak season, it is likely to remain high, with manufacturing picking up across the globe and GDP forecast to grow by 6% in 2021 and even more in 2022.

We negotiate rate and volume agreements with ocean carriers across all three alliances and work closely with leading airlines and cargo carriers to offer the widest range of equipment, time-sensitive solutions, routes and transit times at the most competitive rates.

Speak directly to our managing director, Colin Redman, to find out how we can help you.
TEL +44 (0) 1784 466 050
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