Competitive Edge

October 6th, 2021

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Ocean Freight Market Update

Europe –> North America:

Rates: Expect October 15th  GRI.
Space: Limited – Expect delays to US South West. Long Beach is highly congested, as of 10/6, over 67 vessels are waiting at bay.
Capacity: Tight – Fewer bookings to inland rail ramp destinations
TIPS: With capacity tight, it is recommended to book on premium services. Recommend to book 4-5 weeks in advance. Work on obtaining booking before 10/1 for best rates.

North America –> Asia:

Rates: October 1st GRI for some carriers.
Space: Space is slowly opening; however port congestion is making things difficult. Read more here on Long Beach Congestion 
Capacity: Steady for Standard Containers.
TIPS: Looking into re-routing options may be helpful to avoid port congestion at LGB and OAK. Seattle and Texas may be good alternatives for your cargo.

Asia -> North America Rates: No October GRI expected – rates are starting to decrease. Space is opening, especially from key ports that were previously overwhelmed. Space: port congestion is lessening. Set to clear up in a few weeks a bit due to lack of cargo during Golden Week.

Equipment Availability: near-normal conditions, except limited 45HC availability 

Freight News

With Container Shortages, U.S. Exports still hitting new highs

Despite the shortage of empty containers, U.S. exports are hitting new highs and on track for a record year, especially soybeans, corn, LPG, LNG, and even coal exports.

According to Census Bureau statistics, the value of U.S. goods exports in the first seven months of the year topped those in any previous January-July period, reported by Freightwaves.

  • Agribulk exports: Exports in June-July totaled 96 million metric tons, which is the highest total ever recorded in the first seven months of a year.
  • Natural gas exports: Last year export facilities saw volumes drop during June-August because of COVID, but that was short-lived. LNG exports total 2 trillion cubic feet in January-July, the best first seven months of the year ever.
  • Coal exports: Prices of coal (as well as LNG) are at all-time highs in Europe and Asia. To put it in perspective, prices now top $200 per ton.
  • LPG exports: Are up 15% from the same period last year
  • Crude oil and refined products exports: In the first seven months of this year averaged 6.17 million bpd, according to Energy Information Administration data and are continuing to be on the rise.

United Airlines is back with Cargo Only Flights

When the pandemic wiped out most intercontinental travel, United was the most aggressive domestic carrier in reassigning aircrafts for dedicated cargo operations, with flying more than 13,400 passenger freighters between March 2020 and late July. Now, United Airlines is restarting cargo-only flights again, weeks after assigning all aircrafts to normal passenger operations because the delta variant has drug down travel volumes and growth expectations for the remainder of the year, reported by Freightwaves. With the uptick in traffic picking up, management decided to return all aircrafts to passenger service, with freight sharing space, and luggage in the lower hold.

In early September at a conference, United Chief Commercial Officer, Andrew Nocella said, he just released five Boeing 777-300s to their cargo division for later this year to put those aircrafts back into all-cargo markets, based on the dynamics they’ve been seeing in the marketplace today, so the aircrafts won’t be idle. Earlier this month, United updated their third-quarter revenue guidance after customer bookings and passenger yields decreased below estimates, in response to the spike in COVID cases, reported by Freightwaves.

Blog Of The Week

Port Congestion Numbers Explained: How Bad Is It?

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