Caroz Market Update: Much needed stability is coming back

The last months have been very challenging with all time high ocean rates and blank sailings around Golden Week. It really wasn’t easy. Luckily there were some significant improvements the last few weeks. The container rates are slowly coming back to normal, blank sailings are stabilizing after the Golden Week in China, and the schedule reliability is improving as well.

Also, the pace along China-Europe trade lane has improved. Big data shows that earlier this year the peak reached 122 days. For example; in the pre-pandemic days it was 55 days. Nowadays the pace reduced from 122 days to 93 days. That is one month faster than during the peak days! Looking at our own set of data, we do see a somewhat similar development, however, average pace on the trade lane China-Europe currently appears around 60 days. Still a significant number of days, nevertheless the improvement of market circumstances combined with active shipment management seems to be paying off!

The transit times from China to the USA are also improving significantly. The China to LA/Long Beach transit time has dropped down with 60% from its highs in December 2021. Pre-pandemic it was 16 days, currently around 20. A significant and much needed improvement.

It isn’t a secret that the sea freight rates are dropping. The carriers are reacting to it with blank sailings, but China’s export-oriented companies will benefit from these lower sea freight rates. This is because the cargo rates represent a fairly large part of total costs. Sometimes even more than the value of the goods.

In the Yangtze River Delta, China’s industry and trade hub, growing container throughput has already largely reflected the effects of decreasing freight rates.

CAROZ’s eye opener: Global supply chain management keeps bringing new and unforeseen surprises creating more concerns about imbalance and reliability issues. Beforementioned makes it increasingly important to have an agile and resilient setup in place. After enormous congestion and unprecedented tariff increases, the price per container has now started a free fall. Quite safe to say, we haven’t seen the old time low yet!

Want to know more?

Each monthly update we will highlight the developments within the Ocean freight market including the following topics:

  • Trending topic
  • Space & rate developments
  • Port developments & congestion
  • Freight Indices & Container Availability
  • How to mitigate risks

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