The number of Covid cases in Shanghai has fallen to a six-week low this week, but restrictions in many parts of the city are getting tougher and expectations are expected that a possible reopening will be gradual. Freightoscargo market, reports.
As available exports continue to decline as truck production and transport remain severely affected, major ocean-based unions have announced the cancellation of at least a third of their planned voyages from Asia by early June, affecting Asia-Europe services more than trans-Pacific region.
Asia-West Coast prices fell 3% this week, while Asia-Northern Europe prices remained unchanged, although rates on both lanes fell more than 20% since the first blockade in Shenzhen began in March. Eliminating capacity through closed voyages could stabilize the pace, even when demand remains subdued.
Similarly, Freightos Air Index air fares from Shanghai to Northern Europe have fallen 46% to $ 6.33 / kg since the start of the blockade in early April, and freightos.com market prices show that Shanghai – The West Coast of the United States has fallen by 20% but prices in both lanes remain well above normal as carriers reduce capacity by canceling flights.
Despite inflation, still rising supply costs, disruptions in Shanghai and signs of a shift to service costs, the latest NRF data show no signs of slowing US demand for ocean imports. March set a new record for monthly imports of containers, and although volumes from April to August are expected to be below that level, imports this summer are expected to be higher than last year.
These volume increases could reflect the upward pull in peak season demand as importers try to anticipate both last year’s delays and the possibility of further delays in West Coast ports in July, when an important docker contract expires, the negotiations that started this week.
- As the blockade in Shanghai continues and the volume of available exports remains suppressed, major unions of ocean carriers have announced additional cancellations totaling more than a third of planned sailings from Asia by early June.
- The removal of capacity could stabilize the prices of containers from Asia to Europe and the West Coast of the United States, which fell by more than 20% after the initial shutdown in Shenzhen in March.
- Despite the slowdown, forecasts for US ocean imports over the summer months remain higher than last year, indicating a boost in demand to avoid peak season delays and possible labor disruptions in West Coast ports when an important docker’s employment contract expires at the end of June.
- Prices on the Asian-American West Coast (FBX01 Daily) fell 3% to $ 12,217 / FEU. This percentage is 67% higher than the same period last year.
- Prices on the east coast of Asia and the United States (FBX03 Daily) were stable at $ 15,982 / FEU and are 115% higher than last week.