The first freight market update of the year and 2022 is starting very much as last year finished, with freight operations challenges and continuing demand for capacity.
In a fluid and fast-moving situation the critical Chinese port of Ningbo has returned to normal operation, while trucking operations in Shenzhen and Tianjin are now facing interruptions, due to COVID testing of drivers.
Ningbo has returned to normal operation
Most other major ports and airports in the country are operating normally, although quarantine measures imposed on flight crew by the Hong Kong government, in response to the increase in Omicron cases, mean that cargo freighter capacity out of Hong Kong will reduce significantly throughout the 1st quarter, with some airlines announcing an 80% reduction in capacity, cancellation of flights to Europe and only a couple of flights a month scheduled to the US in the 1st quarter.
In conjunction with our colleagues in Vietnam and China, we have prepared a short update for the main ports and current pandemic restrictions at selected locations, which follows below.
The Lunar (Chinese) New Year and Tet New Year festivals fall on 1st February, with a 15-day festival in China and a week of holidays in Vietnam.
Chinese New Year and Tet New Year festivals fall on 1st February
The New Year festivals, in both countries, have a significant impact on supply chains, with people travelling long distances to be with family and factories, ports and transport closed for extended periods. Typically longer than the public holidays. But there are exceptions and some factories may incentivise staff to carry on working, or return from holiday promptly.
Factories across China will begin to close from next week (with a typical range from 26th Jan to 10th Feb) and even though the official date of the Tet Holiday would be the 1st of February, factories in Vietnam will be closed for one week, from the 31st of January to the 4th of February and some may take an additional week off.
If you have not already done so, we would urge you to speak with your Asian vendors, so that you are aware of any potential impact on your orders.
If you have communication problems, or other issues, our local offices can liaise with your vendors, to ensure there are no misunderstandings.
Factories in all areas will begin to close from the 25th January, so that workers can travel home for the extended China New Year holidays, with an estimated 80% expected to close in Qindao, Dalian and Tianjin.
Transport will get tighter, regionally, as drivers take holiday leave.
Freight market update
Qingdao / Dalian
Normal operations for local transport/ocean/air.
An estimated 80% of the factories in the area will close for CNY from 25th January.
Tianjin
There are several local restrictions for transport and movements due to COVID measures and drivers need to take tests to enter Beijing and Tianjin,
No restrictions to airport or sea port operations, but the modes are struggling with low efficiency, due to the impact of restrictions.
Tianjin/Xingang port terminal is operating, but restrictions for drivers delaying transport in and out to the port area.
An estimated 80% of the factories in the area will close for CNY from 25th January.
In Tianjin city, people will need to do another 3 tests this week, which could further restrict capacity and movements.
Ningbo
The COVID restrictions that had been in place, since the temporary lockdown in Beilun district have been lifted and the local situation is near to normal.
Local transport is operating again, but the situation will get tighter, as drivers begin to leave for extended China New Year Holidays, starting this week, limiting capacity for cargo.
Ocean shipping bookings, on hand before the CNY holiday, all have space, but we will need to arrange local handling based on sailings.
Many vessels are likely to delay 1-3 weeks, while MSC announced a delay for about 1 month to some sailings.
Many workers will leave for extended China New Year holiday, starting from the end of this week, with many factories closed already from next week.
Shanghai
Normal operations for local transport/ocean/air.
Many workers will leave for extended China New Year holiday, starting from the end of this week. Most factories closed already from next week.
Shenzhen
Parts of Shenzhen are currently affected by COVID measures, which are contributing to delays for local transports.
The port and surrounding CFS are open, but to enter, drivers are required to pass a 48hours Nucleic acid test.
This is the last week before the holiday closure to handle ExWorks arrangements and deliveries to port.
LCL – Pandemic measures require 2-4days pre-booking appointment to get a delivery window to CFS warehouses.
FCL – Peak time at the terminal for this week and terminal still control -7 day before ETB gate-in, while carrier ETB is unreliable and subject to change without prior notice.
Air transport rates have softened to Europe and USA during January.
Some factories close late before the holiday, many factories start to close from the coming weekend.
Xiamen
Normal operations for local transport/ocean/air.
Most local factories will close from next week, 24th Jan, for the extended China New Year Holiday,
Ho Chi Minh City
Normal operations for local transport/ocean/air in Ho Chi Minh (South) and Hanoi (North).
The COVID situation in Hanoi is still more unstable with many areas subject to Red or Yellow alert restrictions.
Many factories have Tet holiday from 25th Jan and from next week many drivers will start their holidays, reducing trucking capacity and increasing costs for local deliveries.
While ocean and air operations are largely normal, heavy congestion continues with delays for deliveries to ports and terminals, and a continuing shortage of equipment from all ports.
If you have urgent pre-CNY shipments, questions or concerns, please contact your local team, account manager or TrustUs@normanglobal.com for support and assistance.
