Sea Freight – June update
10th June, 2022
China
The validity of ocean freight quotes ex China has been between 2-4 weeks during covid, there was a period recently whereby some FCL quotes were only valid for a particular sailing, thankfully we have moved past this situation and are now back to month by month validity. There was some offers in the market for contracts for larger volumes however pricing here is still not favourable and the spot market continues to be the best solution at the moment. The rates had been declining since a peak of USD5500.00 per 20’ container out of Shanghai to AU ports and down to USD2800.00 per 20’, however the current covid lockdowns in Shanghai has caused further shipping issues with space, bookings, vessel movements and pricing. Rates have had a slight increase June 1st this is reflected in updates from the shipping lines and the expectation is that rates will continue to increase as we head towards our next peak season.
As we have expressed from the beginning of covid we ideally need to have visibility of the goods ready date 3 weeks prior to them being ready as it can take 2-3 weeks to secure a booking. We would like to take the time here to thank our customers for working with us on this need, you have all been fantastic with earlier engagement with your purchase orders. Quotes are being provided at the time of receipt of the PO, however it is important to note that the rate may change depending on the timing of the goods ready date and the quote validity. We can always re check the quote at the time of each sailing. Some flexibility here is required to allow our AU and China teams to make the best available booking for your important cargo.
Pre-covid rates validity was for a longer period and for large volume customers rates were able to be locked down for 6-12 months, indications are that the fluidity of the rates and the period needed to secure bookings will continue through to 2024, far from ideal for all in the supply chain and the end consumers but we need to work with what is in front us.
USA
Exports from the USA continue to experience extensive delays and it can take up to 6 weeks to secure FCL bookings. For every USA order please ensure our CS team is engaged at the time of the order being placed. Importantly, please make adjustments to your lead times and do hold regular dialogue with your suppliers as many are also experiencing delays with the production time of finished goods.
FCL rates are also increasing ex the USA and are expected to do so throughout the remainder of 2022. Increases are also being experienced with the USA domestic transport, this is a result if the fuel prices in the USA heading towards USD5.00 per gallon, the gas price was sitting at USD2.30 per gallon on 2020. Significant inflation increases are also adding to the higher costs out of the USA, inflation is currently sitting at 8.5%.
New Zealand
Lots of delays currently, almost every vessel gets pushed back for departure, then sit off coast in NZ for a few weeks also due to congestion. Sailing between ETD and ETA is more around the 30 day mark not 7 days.
Europe and the UK
Sailings from EU and UK are seeing delays and continue to suffer changes as a result of the war in the Ukraine. FCL bookings can be up to 6 weeks so similar to the USA situation.
Australian Exports
With very few direct services ex AU ports to the world we are heavily reliant on transhipment services, key transhipment ports such as Singapore remain heavily congested and as a result shipping lines are restricting volumes to be loaded on vessels out of Australia, early request for bookings is required here in the same manner that we are seeking early PO data from you for imports to Australia.
Consideration can be given to booking as LCL rather than FCL, in some instances LCL space can be more readily available.
Quotes
For any quotes, please reach out to our sales team on sales@sccargo.com.au
