Views: 0 Author: Site Editor Publish Time: 2022-04-18 Origin: Site
The crisis between Russia and Ukraine is impacting freight and supply chains in multiple ways, from higher fuel costs to sanctions and disrupted capacity.
Combined with ongoing pandemic-related delays and closures, reduced but still elevated demand for ocean freight from Asia to the US, and lack of capacity, ocean rates are still high and transit times volatile.
The latest outbreak in Shanghai is not contained and a massive testing campaign is ongoing. The two-phase lockdown was upheld for longer than anticipated, resulting in widespread disruption. Though Shanghai’s air and ocean ports remain open, labor shortages are slowing operations. In addition, the availability of goods has dropped since manufacturing and warehouses are closed, and trucking is limited dure to quarantine rules and travel restrictions.
Ports like Yangshan are reportedly operating at only 50% capacity. As a result, some shippers are shifting to alternate ports like Ningbo, resulting in growing backlogs of ships across multiple ports as well.
Last year's outbreak at Shenzhen's port of Yantian caused a 70% reduction in operations for nearly a week, and resulted in a 20% spike in ocean rates to the US and Europe.
So far, ocean rates to the US have remained stable despite the current outbreak, down by just 3% since the outbreaks began. This dip could be due to the drop in available goods. When operations rebound, there could be a surge in shipments and possibly an increase in rates.
Most indications are for strong transpacific volumes in the coming months, including some pull forward of summer demand to get ahead of peak season congestion and possible labor disruptions on the West Coast. But there are also growing signs that consumer demand is beginning to wane as a result of inflation which may moderate congestion and price increases.