The shipping lines blanking programme from China to Europe is keeping a tight grip on prices, with spot rates up 32% on last year.
Freight rates to North Europe and the Med have been climbing steadily through much of the lockdown, as the lines removed capacity in line with demand and with spot rates increasing, we can offer the biggest volume shippers better deals than going directly to the lines.
We can offer the volume shippers better deals than going directly to the lines
But as retailers and manufacturers get back to business, their increasing volumes will lead to a tightening of capacity, unless new capacity is quickly returned.
Rebounding from lockdowns, booking trends are strong from China and Southeast Asia, while the shipping lines have already announced cancellation of 94 scheduled sailings on Asia–Europe routes from April through August, with more likely, which suggests they are uncertain how strong the peak will be.
The shipping lines are assuring us that the rising volumes will not lead to an increase in cargo being rolled and our practice of making advance bookings is usually sufficient to protect our cargo.
NGL teams in Asia and the UK negotiate and maintain service agreements with key carriers in the three alliances to give our customers the space and rate confidence they need during these challenging times.
Our teams in Asia confirm that capacity is tightening on many trades, including Asia–Europe, but they have not had any issues securing space or with cargo being rolled.
Overall the capacity for the 3rd quarter looks to be improved over the previous period, but the impact of the peak is still uncertain, which means that that the carriers will continue to closely manage capacity to suit demand.
Lines are starting to return capacity to the worst-affected trades such as the eastbound transpacific, to accommodate higher-than-expected demand and we hope to see some previously blanked sailings being put back on to schedules, if Westbound demand continues to grow.
We are concerned that despite significantly reduced bunker costs in the second quarter the carriers have held onto bunker surcharges, which is why we continue to push for a neutral bunker adjustment factor indexing mechanism.