A renewed flurry of booking activity is likely beginning in late November and through December as US importers aim to beat the Lunar New Year production and export slowdown in China
“We’re seeing quite some demand, particularly from big box retailers, who need to move cargos out before January”
Premium rates on the Southeast Asia-North America route have been largely within range as lower factory production in China has eased up the supply pressure
All-inclusive container rates on the trans-Pacific route are expected to jump again ahead of the Lunar New Year holiday in February 2022 as US retailers renew replenishment of their inventory, according to S&P Global Platts.
Platts said a renewed flurry of booking activity is likely beginning in late November and through December as US importers aim to beat the Lunar New Year production and export slowdown in China.
This is likely to lend further support to freight rates, which could result in a return of escalated premium levels seen during the August and September peak period, according to the commodities market price information and analytics provider.
One carrier source told Platts that its volume expectations had increased for the November-January period and it expects significant space premiums to begin during the week of December 6.
“We’re seeing quite some demand, particularly from big box retailers, who need to move cargos out before January,” the source said. “They have asked us for large premium services which is putting pressure on space available.”
“From here through Lunar New Year, space is going to remain tight, and there’s not really going to be an opportunity for shippers to get lower rates, and [there will be] a resumption of more bookings under the premium classification,” a US-based freight forwarder told Platts. Rates have already begun to inch up, the source added, as carriers have begun to allocate less space on freight all kinds and more on premium bases.
Meanwhile, the report said premium rates on the Southeast Asia-North America route were largely within range during the week ended November 18 as lower factory production in China has eased up the supply pressure. However, persistent equipment shortage in Vietnam prevented a price fall.
The factory output in China has seen a decline due to electricity outages in the country as a measure to reduce power consumption. The power rationing is likely to continue until early next year, said Platts.
Some exporters are also holding back their shipments to the West Coast because they are uncertain what new regulations the US administration may bring in, a freight-forwarder based in China said.
The slowdown in export volumes has also given a breather to the Chinese ports, and the congestion issues are now receding, Platts said.
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