Though ports remain open, two-phase lockdown in Shanghai is significantly impacting the availability of goods as manufacturing and warehouses close, and trucking availability is significantly disrupted.
Some airlines are already canceling flights out of Shanghai, and Freightos Data shows Shanghai – US rates have climbed 10% in the last two weeks.
With ports operational, the impact is not expected to be as severe as in Yantian a year ago, though a significant slowdown is expected nonetheless.
Joyce Tai, EVP of World Partnerships at Freightos, who is based in Shanghai, reports:
“Shanghai has gone through waves of smaller-scale closures since early March, neither the government nor business are entirely unprepared. But it’s estimated that over 60% of road transportation in and out of Shanghai is temporarily paused which is a challenge.”
A lull and surge in available goods will typically drive some dip in ocean rates before a rebound. But in Europe, the inflation-driven decrease in demand has pushed Asia – N. Europe rates down by 20% since early this year to their lowest level since July, and the Shanghai disruption is unlikely to break that trend.
Transpacific rates have been high but stable since Lunar New Year and may point not only to sustained consumer demand, but also to retailers pulling some summer orders forward to avoid peak season delays and the looming July expiration of a key West Coast port worker’s union contract.
Asia-US rates for this week:
|Containerized Freight Rates from the Freightos Baltic Index|
|FBX Lane||Global||Asia – US West Coast||Asia – US East Coast||Asia – North Europe||North Europe – US East Coast|
|* Compared to the corresponding week in 2021|