- The Yantian crisis is contributing to delays and tied up capacity already plaguing the industry, and pushing the share of global capacity currently waiting outside a port to more than 5%.
- The crisis is also pushing ocean rates even higher, with Asia-US East Coast rates spiking 25% to more than $9,000/FEU, and prices from Asia to Europe and the Mediterranean to more than $11k/FEU.
- Asia-US West Coast prices (FBX01 Daily) climbed 15% to a new high of $6,341/FEU. This rate is 245% higher than the same time last year.
- Asia-US East Coast prices (FBX03 Daily) spiked to a new record of $9,317/FEU, and are 250% higher than rates for this week last year. Analysis
The Port of Yantian – responsible for about 25% of US-bound, Chinese origin ocean volumes – has been operating at only 30% capacity for two weeks now following a coronavirus outbreak. This has created a queue of ships that could wait 16 days to dock. With the nearby ports of Shekou and Nansha unable to handle all the impacted containers, some carriers are skipping not only Yantian but also Shekou to avoid days of delays.
Robert Khachatryan, COO of Freight Right Global Logistics, a freight forwarder that offers services on the Freightos.com freight booking platform explained that the latest crisis is also overwhelming other modes as some shipments “are being trucked to other ports at significant cost.” And the slowdown could impact ocean logistics even more significantly than the Suez including an eventual surge of volumes at US and European destinations.
The impact of this latest crisis will be amplified because the industry is already spread so thin: Though improved, delays at LA/Long Beach persist; some carriers are now avoiding alternative ports like Oakland because they are no better, and smaller disruptions like those in Taiwan and Hamburg are also causing delays and tying up capacity. All in, an estimated 5.5% of all ocean capacity is currently waiting outside a port.
And all this means that already sky-high spot rates were pushed even higher this week: Asia-US container rates spiked to new highs with a 25% climb to the East Coast, now at more than $9k/FEU, and a 15% increase to the West Coast which crossed the $6k/FEU mark, and backhaul rates increased by more than 25% as well. Prices from Asia to North Europe and the Mediterranean both increased by more than 5% and passed $11K/FEU. And of course, surcharges and premiums often mean that actual logistics can be thousands more.
And with peak season on its way, it once again looks like things will continue to get worse before they get better.