By Richie Lin.    Photo：Saunak Shah

Relief of lockdown in Shanghai and the negotiation between ILWU and PMA after May will push up ocean freight again before third quarter.

Shanghai city in China is still applying lockdown this week and will mostly likely extend till the end of April. Shanghai is the biggest export center in China, so the lockdown and strict Covid-19 test rules have forced factories in Shanghai, Kunshan, Suzhou to postpone the shipments. However, decreasing demands didn’t make carriers drop their rate significantly to attract customers. On the contrary, carriers used the blank sailings to cut the supply to maintain high-rate expectation under the negotiation with BCO customers and Forwarders for new contract between May 2022 to April 2023. In the past few weeks, we could from time to time hear some forwarders provided cut-throat rate to ask more containers to fulfill their MQC but this didn’t change the carriers’ policy to keep the rate level. And the relief of lockdown in Shanghai will cause a big wave of shipments to catch up the demands to fulfill inventory. In addition to the intervention of carriers, there is also another crucial factor which will influence the ocean freight after May 2022. New contract negotiation between ILWU (International Longshore and Warehouse Union) and PMA (Pacific Maritime Association) will begin in May. Longshoremen in ports of USA west coast might slow down operations to get a better leverage on negotiation. So we will might begin to face port congestions again in Los Angeles and Long Beach which will cause imbalance of supply and demand again. So between May and June, we can expect to face another round of ocean freight hike.

Ocean FCL rate reference in week 16:

• Asia main ports to USAWC USD 8500~16500 per 40GP; 
• Asia main ports to USAEC USD 11000~18500 per 40GP; 
• Asia main ports for IPI points of USA is USD 16500~22500 per 40GP.
• Asia main ports to Europe base ports and West Mediterranean: USD 14000~15000 per 40GP.  

Please note above rate is only for reference, carriers might only give space for higher rate, which will be from USD 11,000~25,000 per 40GP for different destinations.

Airfreight market rate in Week 16:

The airfreight is updated each week to match the market situation. Many airlines cancel their flights from/to Shanghai because of shortage of man powers in Shanghai Pudong airport. Airfreight rate might increase abruptly without further notice. The following market rate for your reference. 

• PVG/SZX/HKG/TPE to LAX USD 10.0/kg, 
• PVG/SZX/HKG/TPE to ORD USD 10.5/kg, 
• PVG/SZX/HKG/TPE to JFK USD 11.5/kg.

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