Weekly Update – 11.03.2022

Weekly Update – 11.03.2022
March 11, 2022 Hannah Marshallsay

Global port congestion drags on with new Covid-19 outbreaks in China threatening Sea Freight services in affected regions. Capacity on Air Freight services takes a nosedive, pushing rates up further.

Port Congestion and Covid Restrict Sea Freight Services

The congestion from post Chinese New Year backlogs that we have seen in recent weeks in ports across China has been easing, some congestion remains at China’s key hub ports. However congestion and slow productivity at ports in Europe and the UK continues to impact arrivals. To attempt to manage the capacity of full services, shipping lines continue to skip key global ports and blank sailings to try to reinstate service reliability and frequency.

While pressures caused by the Covid-19 pandemic appeared to be softening, this week there have been new outbreaks announced in two regions of China – Shanghai and Qingdao. Authorities are imposing population testing across both regions. At this point in time the measures imposed have yet to harm productivity at the ports and we are not seeing any direct impact on the movement of shipments. There is the possibility however that there will be some delays to the inland transportation of export containers due to the new testing requirements and inspection of health documents of truck drivers. We will keep customers updated with further news at the earliest opportunity.

Air Freight Capacity Drops Causing Rates to Rise Further

Last week we informed customers that Air freight rates on air imports to the UK had already been affected by the Russian invasion of Ukraine. This week we have seen air freight rates climb higher still and fuel surcharges imposed as capacity is squeezed by a number of factors. 

Recent Covid-19 outbreaks in China have reduced capacity on both passenger and freight aircrafts. In response to new cases of Covid-19 being identified at airports, Chinese authorities are implementing strict restrictions to ground staff operations resulting in flight cancellations and the limitation of services. Due to the resulting increased pressure on capacity, there has been a big jump in air freight rates on flights out of China.

As a result of the conflict in Ukraine, European carriers have been cancelling services and are expected to continue to do so. Due to the current fluctuation and lack of stability in the market, space will be squeezed and air freight rates may rise further. 

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