Despite detections of omicron and containment measures in several major Chinese port cities, the direct impact on logistics has so far been moderate, according to cargo marketplace Freightos. This is likely due to restrictions being quite targeted and the fact that no infections have occurred among port workers themselves, as was the case in Yantian this summer.
Ex-China ocean rates have increased only moderately on some lanes ahead of Lunar New Year. The congestion and delays at US destination ports may have muted some of the urgency that can sometimes push demand up ahead of LNY.
- Asia-US West Coast prices (FBX01 Daily) increased 4% to $15,171/FEU. This rate is 248% higher than the same time last year.
- Asia-US East Coast prices (FBX03 Daily) dipped 4% to $16,837/FEU, and are 184% higher than rates for this week last year.
This week all eyes were on China and the impact that strict outbreak containment measures might have on logistics. Steps were taken to quash the spread of positive cases detected in multiple places including Beijing, Shenzhen, Tianjin, Dalian and several others while freight operations in Ningbo largely recovered.
So far no major impacts have been reported at any of the relevant ports themselves, though the disruptions in Ningbo did result in some diversions to and congestion in Shanghai. According to Miranda Qin of Seabay Logistics, following the detection of omicron in Dalian, shipments are still experiencing delays of only three to seven days, about the norm for much of the country and not unexpected with Lunar New Year (LNY) approaching.
One reason that logistics operations have remained largely intact is that the restrictions have been swift and as targeted as possible. Also, so far there haven’t been positive cases among port workers themselves, which was the case last summer when the port of Yantian was partially closed.
Ocean spot rates from Asia to the US West Coast have crept up by 4% as LNY approaches. With less than two weeks to go before manufacturing in China slows down over the holiday, it is unlikely we will see any significant additional pressure on rates as shipments that haven’t been booked yet are unlikely to get moved in time. The congestion and delays at US destination ports may have muted some of the urgency that pushes demand up ahead of LNY most years.
But with enough time to still move cargo by air, the pre-holiday rush, along with pandemic-restricted capacity is pushing air cargo rates up on some ex-China lanes. The Freightos Air Index had China-North Europe prices at $9.59/kg last week, up significantly since the start of the month when they were less than $6/kg.