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Ocean freight rate reference and airfreight market rate reference in Week 40

04 Oct 2022

By Richie Lin.     Photo:Robert So

In a report issued by supply chain analysis in USA in August, New York/New Jersey port toppled Los Angeles and Long Beach for the first time in decades. New York/New Jersey handled 843,191 twenty-foot equivalent units (TEUs) in August, surpassing Long Beach's 806,940 TEUS and LA's 805,314 TEUS. This increased volumes also caused port congestions and delay berthing schedule happen in the ports of US east coast. Fear of the possible strikes might happen in Los Angeles and Long Beach if negotiations between ILWU and PMA didn’t go well in July. Due to the political interference of Biden government, the strikes were postponed under the good wills from unions and companies to keep talking. But the volumes have transferred largely to ports in east coast, therefore the volumes in west coast dropped and also dragged down the ocean freight rate to west coast significantly since August. Like the old saying in ancient Chinese book—I-Ching: “There is nothing permanent except change itself.” Since there is no much waiting time in the ports of west coast and rate is dropping, customers will switch back to use Los Angles and Long Beach or other west coast ports as the gateways to bring products into USA. Then the port congestions in east cost will be eased and again drags down the freight rate to the east coast as well. No company can escape the rules of supply and demand, the invisible hands of price in the economics. When supply chain bottlenecks and unprecedented demands worked together from the end of 2020 till first quarter of 2022, it created a gigantic demand for equipment of shipping lines, railways, trucks, and brought abundant profits for companies in the logistics industries, especially shipping lines. After customers reduced their consumptions because of higher inflation, demands for logistics arrangements dropped consequentially. Therefore, the price is on the way to decrease when supply is adjusting to match the demand. Everybody is expecting that rate will be still decreasing in October, but not sure at what level. Shipping lines will keep use blank sailings or just skip calling some ports to control the supply of spaces to avoid breakdown of ocean freight rates. Even ocean freight rate might have chance to go down further in the near future, customers should not postpone their shipments to wait for better price because nobody can be one hundred percent sure that there will be no strikes in ports, railways and trucks. If the strikes happen suddenly without any further notice, the transit time will be extended much longer and once again cause supply chain breakdown. Like I said earlier, there is nothing permanent except change itself.

 

Ocean FCL market rate reference in week 40:

  • Asia main ports to USAWC USD 2500~3500 per 40GP; 
  • Asia main ports to USAEC USD 6500~7500 per 40GP; 
  • Asia main ports for IPI points of USA is USD 7000~10000 per 40GP. 
  • Asia main ports to Europe base ports and West Mediterranean: USD 6600~7000 per 40GP. 

Please note above rate is only for reference, carriers might only give space for higher rate, which will be from USD 4,000~11,000 per 40GP for different destinations.

 

Airfreight market rate in Week 40:

Airfreight rate might increase abruptly without further notice. The following market rate for your reference. 

  • PVG/SZX/HKG/TPE to LAX USD 5.3/kg, 
  • PVG/SZX/HKG/TPE to ORD USD 5.8/kg, 
  • PVG/SZX/HKG/TPE to JFK USD 5.3/kg.

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