Global freight is still backed up and it’s not going to get better any time soon. While back online, the Yantian disruption and persistent demand are making empty containers scarce, and continuing to put pressure on rates. Importers are paying dearly as a result, with most spot importers paying thousands more in above-market premiums just to actually secure space.

Robert Khachatryan, COO of forwarder Freight Right Global Logistics that offers services on the Freightos.com marketplace, explains that importers with annual contracts may be moving some containers at contracted rates, but “at the moment, about 90% of our cargo is moving at premium rates. There are indications that rates to the East Coast will likely reach $18,000-20,000/FEU [with premiums] in early July,” even as reliability continues to suffer. In other words, nearly 10X higher than the same time last year.

China-US rates:
Analysis

  • Asia-US West Coast prices (FBX01 Daily) increased 2% to $6,969/FEU. This rate is 167% higher than the same time last year.
  • Asia-US East Coast prices (FBX03 Daily) dipped 2% to $9,781/FEU, and are 199% higher than rates for this week last year.

The Port of Yantian is now back operating at full capacity, but it will take weeks to clear the containers already at the port as well as the backlog of exports waiting to ship from manufacturers in the region.

According to Robert Khachatryan, COO of Freight Right Global Logistics, a freight forwarder that offers services on the Freightos.com freight booking platform, the disruption is also making it more challenging to secure empty containers, and is being felt in other ports in the region as well.

The delays, schedule disruptions, and tied up capacity from Yantian are the latest examples from the past twelve months of surging demand combining with other incidents to have outsized impacts on ocean freight, as the industry operates with no capacity to spare.

And though rates on the major ocean trade lanes were stable overall this week – only Europe - N. America increased significantly, 9% and nearly $500/FEU – shippers are often paying thousands more in premiums just to make a booking.

Khachatryan explains that importers with annual contracts may be moving some containers at contracted rates, but “anything over the allocation is moving at premium rates only. At the moment, about 90% of our cargo is moving at premium rates. There are indications that rates to the East Coast will likely reach $18,000-20,000/FEU [with premiums] in early July,” even as reliability continues to suffer.