Last updated: January 21, 2022
Freight & Shipping Delays
With ongoing pandemic-related delays and closures, non-stop demand for ocean freight from Asia to the US, and a lack of capacity, ocean rates are still very elevated and transit times volatile.
Transpacific ocean rates have been more stable at the start of the year. Despite this stabilizing trend, rates remain 8-9X higher than the pre-pandemic norm.
Furthermore, easing prices are not being driven by any significant reduction of port congestion. Learn more about congestion at Long Beach port here.
Continued disrupted schedules and port congestion, combined with omicron slow downs and Lunar New Year, mean that importers have yet to see any significant improvement in shipping conditions in 2022.
Ocean freight rate increases and delays
Ocean rates on the major trade lanes remained stable this week but are still extremely elevated.
Manufacturing in China is expected to slow down significantly over the Lunar New Year (LNY) holiday at the start of February, with shipping prices going up ahead of the holiday.
While there were fears that China’s swift lockdown policy would cause added disruptions, steps were taken to quash the spread of positive cases detected in multiple places and so far no major impacts have been reported at any of the relevant ports.
The recent increase in cases could limit manufacturing in areas with outbreaks, but could also mean factories that normally close over the Lunar New Year (LNY) holiday will stay open, reducing the typical pre-holiday pressure on logistics.
Plus, it is likely than any impact of LNY is already being felt and won’t cause additional price increases. With less than two weeks to go any ocean shipments that haven’t been booked yet are unlikely to get moved in time.
These are container freight rates for the week of January 17, 2022, according to the Freightos Baltic Index:
- Global freight rates increased 1% to $9,604 which is 140% higher than this time last year
- Asia – US West Coast rates increased 4% to $15,171 which is nearly 250% higher than this time last year
- Asia – US East Coast container rates went down slightly to $16,837, a rate 184% more expensive than last year
- Asia – North Europe container shipping rates also decreased slightly to $14,314, 83% higher than last year’s rate
- North Europe – US East Coast rates increased 5% to $6,811, however this is nearly 274% higher than this week in 2021
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Freight market 2022 video update
What’s going to happen with freight in 2022? It’s hard to tell in week one, but so far things are looking pretty similar to 2021. But this could change…
Join Freightos Group Head of Research Judah Levine as he looks back at the past year in freight and offers some predictions for 2022.
Check out the full video below:
Air freight delays and cost increases
While ocean rate more or less stable and not expected to spike ahead of LNY, there is still enough time to move cargo by air.
The pre-holiday rush, along with pandemic-restricted capacity, is pushing air cargo rates up on some ex-China lanes.
The Freightos Air Index had China-North Europe prices at $9.59/kg last week, up significantly since the start of the month when they were less than $6/kg.
Trucking delays and cost increases
With high demand from consumers, importers are rushing to replenish inventory, causing capacity in trucking to tighten and driving rates up.
Now many observers warn that quarantine rules for returning truckers could cause significant delays even if goods manufactured over the holiday are ready to ship.
Overwhelmed trucking, warehouse and rail logistics are also contributing to the port delays, and to the overall slog in end to end logistics.
Freightos.com marketplace data shows that in September, China-US ocean shipments took an average of 80 days to arrive at their final destination, 85% longer than in September 2019.
Amazon shipping in 2022
With a 60% annual increase in sales by third party sellers on Amazon’s marketplace last year, the boom in e-commerce continues.
Keeping up with door to door pricing for Amazon FBA shipping can be a hassle.
Want to know what the rates are? Check out Freightos.com’s FBAX, the Amazon FBA freight index
With data from thousands of weekly pricing points from freight forwarders, we’ve developed a weekly index of freight prices including for Less than Container Load (LCL), Full Container Load (FCL), and air cargo, from major export cities in southeast Asia to the most popular Amazon fulfillment centers in the US.
Read up on how Amazon sellers can deal with rapidly-changing consumer demands as well as inventory challenges HERE.
When will freight rates and shipping prices go down?
In the current situation, many importers and exporters are wondering when they can expect freight rates and shipping prices to go down. The answer? Not yet.
But, despite potential delays and high freight shipping costs, there are a few steps importers can take right now:
How to navigate the current freight market:
- Compare at least a few quotes and modes to make sure you are getting the best cost and most efficient service possible.
- Buffer your freight budget and transit time for changes. Costs due to unforeseen delays or limited capacity can arise, so be prepared.
- Explore warehousing options to mitigate the effects of lowered demand and business restrictions in the US.
- Pay attention to the profitability of your goods and consider if a pivot could be worthwhile. Additionally, remember to factor in freight costs when assessing profitability.
How small or midsize importers can plan for operational success on Freightos.com:
- Understand that delays and extra charges may arise. Freight forwarders are trying their best to move goods on schedule without additional fees, but in this unstable period, delays and additional charges can occur out of forwarders’ control.
- Consider which shipping mode is best for you right now. As during non-pandemic times, ocean freight is typically far cheaper but has significant lead time. If your transit time demands it, ship by air and you’ll have confidence in the transit times.
- Book now if you can. Freightos.com is fully operational, so book orders now to get goods moving as quickly as possible.
- Communicate regularly with your freight forwarder. This is more important than ever – staying in touch means you’ll have a better handle on your transit time and stay on top of any changes that may arise.
- Make sure that you have manpower to accept your goods at arrival. This will minimize delays.
How to stay informed:
- Keep up to date on the industry with our resource roundup page.
- Check out our daily FBX ocean rates index to help you stay on top of freight rates in 2022.
As always, we at Freightos.com are here to help. Please reach out if you have any questions or concerns.