Ocean Freight and Logistics
Q1 2022 Market Update
SUMMARY: Overseas shipping cost remains extremely high, driven by port backlogs and constrained availability of ocean-going container berths, and average delivery lead-time continues to stretch. Industry experts predict this situation to continue thru 2022 which will tend to sustain the inflationary pricing pressures felt by industry during the past year.
Year on Year Pricing Tends
OCEAN FREIGHT COSTS AT VERY HIGH LEVELS, SETTING NEW BAR ▪ Average cost to ship 40-foot containers from Asia remains at all time highs, averaging above $18,000 (Canadian) per container, globally, with further increases likely to come again closer to Chinese New Year. Spot rate price levels, the rates around the $20,000 mark, are anticipated to set the norm for contract rates in the new year, setting a new floor for the industry’s rate structure. Ocean freight executives are expecting shipping contract rates set at for 2022 at rates double what was the case in early 2021. 511’s China Logistics Team, Flexport, Vespucci Maritime, Wall Street Journal ▪ Chinese government manipulation of electricity grid for manufacturing continued throughout the Fall of 2021 and is expected to last at least until the completion of Chinese New Year and the Beijing Olympics. Power black outs are used to suppress and steer manufacturing to desired provinces and types of product manufacture, based on government edict. ▪ China, Vietnam and other countries in the region are adhering to strict no-tolerance policies that put entire provinces in lock-down immediately upon the report of Covid cases. Manufacturing production and dock operations continue to be intermittently stalled for days and even weeks at a time upon each occurrence. 511’s China Logistics Team GOVERNMENT ELECTRICITY EDICTS, COVID NO-TOLERANCE AND PORT WAREHOUSING SHORTAGES ▪ Importers from China are facing critical challenges securing warehousing space near ports for finished goods to stage awaiting cargo ship berths to North America. This backlog is adding tens of thousands of dollars to the cost of each container of product and is contributing to inflationary pressures. DELIVERY ETA DATE ACCURACY ERODES FURTHER ▪ Ocean shipment arrival times averaged 76 days at the end of 2021, 84% longer than the year prior. Freightos
Global Ocean Container Shipping Avg Rates
Freightos Baltic Index
Freightos.com
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