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Premium fees for Asian export cargoes commonplace amid empty container shortage
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On the Southeast Asia-North America route, signs of an upcoming rush and equipment shortage have started to emerge as shippers rush in to make bookings before the Lunar New Year
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A pick-up in rates in the first half of December and into January is forecast for the Asia-Europe trade as the Lunar New Year holiday in February comes into view
All-inclusive trans-Pacific container shipping rates to North America strengthened in the week ended December 3, as shortages of equipment and carrying capacity in North Asia worsened amid steady demand from cargo loaders, according to S&P Global Platts.
The commodity benchmark price provider said reports indicated that there is more opportunity to move cargoes on freight all kinds (FAK) rates from South China, while there may be premiums from central and North China depending on the loading date. And from anywhere else such as Korea, Thailand or Vietnam, the shipper will get more premium offers than FAK.
In Canada, demand from retailers restocking ahead of Lunar New Year has been exacerbated by the difficulty in returning empty containers to Asian export hubs, particularly from the West Coast of North America.
Aside from the months-long port congestion at the Los Angeles/Long Beach port complex, the Port of Vancouver is also struggling to resume normal operations since rail networks to the port were washed out by floods in mid-November.
“We were already in a crisis and now it’s become even worse,” a Vancouver-based freight forwarder told Platts. “There is so much rail cargo in terminals that they can barely unload any ships. It will be months before we dig out of this hole.”
Meanwhile, on the Southeast Asia-North America route, the premium rates for containers were largely unchanged amid tepid trade, but signs of an upcoming rush and equipment shortage have started to emerge as shippers rush in to make bookings before the Lunar New Year, Platts said.
The resurgence of coronavirus infections has also added to the woes of shippers from Southeast Asia.
Congestion and cargo backlogs at transshipment hubs in Asia also signal that logistical challenges and price increases are in the offing. Premium surcharges may continue to rule the markets at least for the first half of 2022, sources told Platts.
In the Asia-Europe trade, FAK bookings continued to take up the lion’s share of market activity, although some premium levels were heard for priority loading, particularly for Mediterranean discharges.
A Mediterranean carrier said that volume projections up to and after the Lunar New Year remain strong, which should lend ample support to higher freight rates.
In the North Continent and UK markets, bookings from Asia were all being done on FAK bases, albeit at near record high rates. While FAK rates edged downward during the week, most sources expect a pick-up in the first half of December and into January as the Lunar New Year holiday in February comes into view.
