With COVID restrictions already slowing operations at major Chinese ports, a new outbreak yesterday in Ningbo has shut down one of the port’s terminals. Outbreaks are impacting manufacturing and port operations just as demand for exports hit their peak-season stride: US import volumes in August are projected to set a new monthly record. 

Disruptions in Asia will likely contribute to more delays for US importers, and even more pressure on already extremely elevated rates. Though prices had already spiked last August, current rates from Asia to the US are more than six times their levels a year ago.

Asia-US rates:
Analysis

  • Asia-US West Coast weekly prices (FBX01 Daily) increased 1% to $18,556/FEU. This rate is 571% higher than the same time last year.
  • Asia-US East Coast weekly prices (FBX03 Daily) increased 5% to $19,620/FEU, and are 514% higher than rates for this week last year.

COVID-19 outbreaks in Vietnam and parts of China are closing factories and slowing logistics, even as peak season demand and congestion at US ports continue to surge. 

On top of the recent restrictions on port workers and ship crews that were already slowing operations and driving congestion at China’s major sea ports and at Shanghai’s Pudong airport, an outbreak among port operators today has reportedly shut down one of Ningbo’s container terminals. 

These additional complications couldn’t come at a worse time. 

Though US demand for imports has surged for more than a year, peak season is just hitting its stride and pushing volumes to new heights. The National Retail Federation projects that August will set a new monthly container import record, surpassing last August’s volumes by 12.6%. 

Congestion and delays are already growing at the ports of LA and Long Beach and though disruptions at Asian origin ports could result in a temporary lull of arrivals in the US, they will only add to delays for US importers.

Though some carriers are adding capacity (again) via Oakland and others are getting creative with a rail-sea service to the East Coast, peak demand continues to put tremendous pressure on freight rates.  Asia - US rates are more than six times their levels a year ago, and Asia - North Europe prices are 719% higher than this time last year. As capacity is moved to meet the demand ex-Asia, rates on other lanes, like the transatlantic are climbing too: Europe - US East Coast prices climbed 10% to $6,658/FEU this week, nearly four times their level a year ago, and Europe to South America rates increased 12% to $3,459/FEU, a 250% climb over last year.