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Pre-Chinese New Year cargo rush ex-Asia to North America is pushing the ceiling for premium rates even higher, as some shippers with urgent cargo are willing to pay sky-high rates for sought-after space
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On the Asia-Europe trade lane, space and equipment crunches continue as market demand consistently exceeds supply, with rates staying very high for a long period
The elevated Asia-to-North America ocean freight rates are expected to go even higher ahead of the Chinese New Year (CNY), while Asia-to-Europe prices are seen to remain stable but at a high level, according to the latest update from Flexport.
Pre-CNY cargo rush ex-Asia to North America (trans-Pacific trade) is pushing the ceiling for premium rates even higher, as some shippers with urgent cargo are willing to pay sky-high rates for sought-after space, Flexport said in a January 4 report.
Capacity and sailings are limited relative to demand, largely due to sliding schedules, accumulating delays, and blanked sailings related to severe port congestion.
Trans-Pacific rate increases were implemented for the first half of January, some of which are near the general rate increase (GRI) levels seen over the summer.
Rate levels remain elevated and potentially large increases are expected for January due to strong pre-CNY demand, as more shippers and importers are converting bookings from standard to premium.
As vessel space remains critical and equipment is severely under capacity, the report recommends booking at least four to six weeks prior to cargo ready date.
“Consider premium options, which may be limited,” Flexport, a US freight forwarding and customs brokerage company based in San Francisco, California, said.
On the Asia-Europe (Far East Westbound or FEWB) trade lane, space and equipment crunches continue as market demand consistently exceeds supply, with rates staying very high for a long period.
Space and equipment remain very tight due to frequent blank sailings and port omissions, the update said. Carriers are over-committed and are limiting booking acceptance or rolling shipments. And with continuous vessel delays and shifts, schedule reliability is very low and delays for pre-CNY sailings will have a significant impact into the post-CNY period.
On rates, Asia-Europe prices remain stable at a high level. Some carriers slightly increased their rates for the first half of January. “Due to the traditional CNY peak season, we anticipate that there will be likely rate increases for the second half of January as well,” the report said.
With space on the FEWB in an extremely critical level and with severe equipment shortage across all Asia origins, Flexport recommends booking at least three to four weeks prior to cargo ready date.
Photo by Ian Taylor on Unsplash
