Market Situation in China and South East Asia

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Market Situation in China and South East Asia

Author:

22-Apr-21

Market Situation in China and South East Asia

The recent Ever Given incident in the Suez Canal has resulted in extreme concerns for space, capacity, and rates. The bottleneck hit India, Vietnam, and Southeast Asian exports badly as it is the major corridor for AWS routing in these regions. As a result, customers are switching to MLB service which may lead to a sharp increase in the demand for West Coast sailings.

We received information from MSC that even Diamond Tier bookings from South East Asia to LA are now subjected to booking confirmation. It could take at minimum a month to resolve all the subsequent issues.

As vessels are now expected to be delayed by more than three weeks, pricing concerns continue to mount. Increasing passive blank sailings and the decrease in capacity in Q2 will make pricing in April and May very difficult to predict.

Further aggravating factors for US inland service are major port congestion, rail car, major chassis, and driver shortages. Additionally, there is the potential for IPI and door delays at all LA/LB terminals to be more than 45 days and that is if carriers will accept an IPI move. It may be wise to negotiate with carriers to consider USWC base port service. Also note, due to the dry season in The Panama Canal, most carriers will implement USEC cargo weight limitations.

We encourage customers to investigate the use of premium service to avoid huge delay of their shipments. Shippers must prepare for continued delays in ocean freight deliveries and increased pricing to be the unfortunate reality in the coming weeks and perhaps longer.

You can rely on John S. Connor to provide the latest information and recommendations to lessen the concerns you may have about the space, capacity, and rates affecting China and South East Asia sailings. Please contact your account representative, email us at info@jsconnor.com, or call us at 410-863-0211.