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Ocean Freight Market Updates: September 14, 2017
Peak season brings volatile rates
Rates are generally steady or increasing slightly, and space remains very tight from Asia to the U.S. It’s important to book your shipments at least 2 weeks in advance, especially for Asia - U.S. West Coast and India - U.S. West Coast shipments. Read more peak season tips here.
Prepare for Golden Week
China will celebrate Golden Week October 1-8. Factories will be closed during this period.
If you’re shipping via ocean and want your cargo to arrive in time for the winter holidays, you should be sure to book your shipments prior to Golden Week. Read more about how to prepare for Golden Week here.
Hurricane Irma recovery
All terminals at impacted ports -- Miami, Jacksonville, Savannah, and Charleston -- have reopened and are fully operational.
Air rates are still high, and capacity is still tight
International air cargo market demand growth remains strong at 13%, which is well above the ten-year worldwide average of 3%. Meanwhile, international capacity growth stalled at 4%. This supply/demand imbalance is keeping rates high.
Government restrictions on new routes / additional flights out of Shanghai and Beijing have exacerbated the capacity shortage in China.
What’s driving demand: economic growth, product launches, and e-commerce
Amidst a climate of strong global economic growth, e-commerce continues to expand. Many tech products are launching, which will take up a lot of valuable space -- especially the iPhone, which will further constrain capacity out of Shanghai.
Rates will increase after Golden Week
Peak season is hitting early this year, prior to Golden Week (Oct. 1 - 8). We expect to see rates increase after the holiday.
Asia-Europe is seeing increased demand
Demand for Asia-Europe air freight has grown in the double digits in all but 2 of the past 11 months, and is catching up to capacity. Prices are rising.
Congestion and chassis shortages at the Port of Houston
The Port of Houston was closed for a week due to Hurricane Harvey, and they are now working through the backlog of vessels (and they’re doing so around the clock, unloading an average of 2-3 vessels per day!). Because there are so many containers, they’re being stacked higher than normal, which requires extra retrieval time upon pickup.
In addition, Houston is experiencing a serious chassis shortage. After Harvey, thousands of chassis were pulled for inspection, to ensure that they still meet safety standards. At the same time, there’s a drastic increase in traffic as the port is working to catch up.
Factory closures in China
Thousands of factories have shut down in China after a series of inspections by the Ministry of Environmental Protection. At this point, the closures are concentrated in Jilin, Shandong, Zhejiang, Chengdu, and Chongqing; factories in Guangzhou will soon be impacted as well. Read more about the closures here.