By Richie Lin    Photo：Tom Fisk，Link：Pexels

Panic dumping space into market might make drop the rate currently but will not last long because space is the key

FCL freight rate reference in week 41:

• Asia main ports to USAWC USD 8500~11500 per 40GP; 
• Asia main ports to USAEC USD 13500~16500 per 40GP; 
• Asia main ports for IPI points of USA is USD 17500~20000 per 40GP. 

Please note above rate is only for reference, carriers might only give space for higher rate, which will be from USD 16,000~25,000 per 40GP for different destinations.

The electricity curbs happening in Jiangsu, Zhejiang, Guangdong provinces in China have impacted the ocean freight market consequentially. We can see ocean freight rate dropped around 30% in October compared with the rate level in September. Rate drop was the result of panic response toward the canceling overseas orders which forced some forwarders dump their space in the market to avoid penalty from carriers. Every player in the supply chain is wandering if rate will go down from now on or just a temporary setback.

Based on the bookings of carriers and feedbacks from factories, current setback will be relieved after October 15th because space problem is still influencing the market. Several major investing banks such as Goldman Sachs or Morgan Stanley already predicted GDP in China will drop 0.2% if limited electricity continue till the end of 2021. And winter is coming soon in northern part of China which force power plants provide enough electricity for supplying residential heating. Based on the economic and residential request, power plants will do the most to provide stable electricity. The ocean freight rate will be adjusted constantly to reflect the market situation when overseas orders come back to normal.

Airfreight market rate in Week 41:

The airfreight is updated each week to match the market situation. 

The following market rate for your reference. 

• PVG/SZX/HKG/TPE to LAX USD 11.0/kg, 
• PVG/SZX/HKG/TPE to ORD USD 11.5/kg, 
• PVG/SZX/HKG/TPE to JFK USD 12.5/kg. 

Airfreight rate will keep in high ground because airlines canceled many flights to China because of strict regulations of Covid-19.

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