Asia Pacific Container Logistic Update July 2022: How do you prepare your logistics ahead of shipping peak season ?

      As Shanghai is continuing to return to normal from its lengthy lockdown, container logistics demand from Asia to all major markets such as North America, Europe and Africa is strong. Especially as shipping peak season approaches, it’s now essential to prepare your logistics accordingly. Read more in our latest market update.

       As forecasts are predicting that the global economy will grow by 3% this year although projections show this will ease to 2.9% next year, the inflation and the Russia-Ukraine conflict are increasing the risk of a sharp slowdown or recession. But what does this mean for your logistics?
Let’s take a look and get some updates about the latest market trends of inland transportation and ocean freight. This information will help you navigate your logistics more efficiently.

What are the inland transportation trends in the Asia-Pacific in July 2022?

China: All depots in Shanghai resumed operations from June 1 and the capacity of our trucking services from Shanghai returned to around 80% of pre-lockdown levels by mid-June. Cross-border trucking capacity between Hong Kong and South China has increased gradually from about 20% to about 30-40% of normal capacity.

Japan and Korea: The volume of inland container movements in Japan is stable for both exports and imports. All China multimodal rail services from Japan and Korea are suspended due to the Russia-Ukraine conflict. A nationwide strike by unionized truck drivers in South Korea, which ended on June 15, affected the efficiency of cargo volume management at key ports including Busan.

The Philippines: Fuel prices continue to increase and are now 80% higher than at the start of 2022, impacting trucking costs.

Singapore: With the Covid-19 lockdown in Shanghai being lifted, we see volumes increasing as backlogs are cleared. For you, our customers, this means that you can stay in control of your logistics by booking your freight transportation early and in advance.

What are the logistics insights across ocean freight globally?

With Shanghai being released from a two-month lockdown, demand is forecasted to increase in July with the seasonal peak for many trades. Export volumes to Africa, Latin America, and Oceania are forecasted to be strong while the transpacific and Northern Europe markets are easing. Read on and get some detailed updates on shipping routes from the Asia-Pacific to other regions.

Asia Pacific - Northern Europe: Congestion at Northern Europe ports shows little improvement, and we are seeking alternative options to minimize delays. Demand for the Northern Europe trade is stable, and we expect demand to pick up throughout July/August as we approach the summer.

Normally, summer in Asia means peak shipping season and it ends usually around Thanksgiving in November. Summer peak season occurs because of increased demand across the global markets during these months. Summer is a prime time for retail season and lots of businesses start to stock up for the upcoming holiday season. Rather than that, back-to-school shopping and some retailers try to clean up the inventories which adds up to the summer peak season. During this period, the shipping capacity will be tight. We suggest you book early and plan ahead.

Asia Pacific - Mediterranean: There is stable demand for the Mediterranean trade and our shipping capacity is fully utilized. We forecast a summer peak in July and August due to both the peak season and strong advance bookings from customers.

Asia Pacific - North America: Export volumes to North America in June and July are expected to show a slight increase with demand strengthening from mid-July into August. The North American port situation is still critical and capacity loss is expected to continue due to missed sailings caused by port congestion.

Asia Pacific - Latin America: Demand on both West Coast South America and East Coast South America improved from mid-May. Vessels are full and rolled cargo is a possibility. Demand in June and July is expected to remain strong as explained above and rolled cargo is likely due to increased demand, supported by Shanghai’s re-opening.

Asia Pacific - West Central Asia: We expect space will be tight due to stronger demand following the resumption of production after the ending of Shanghai’s lockdown coupled with the capacity reduction in the market. Pakistan banned the import of all non-essential luxury goods including cars/cell phones/cosmetics from mid-May. The situation in Sri Lanka is improving following the appointment of a new prime minister and cabinet.

Asia Pacific - Africa: In East Africa, service to Mombasa is running smoothly; Dar Es Salaam is back to weekly calls. We suggest customers plan bookings in advance for the summer peak season. Moving to West Africa, the positive outlook continues across West African markets. Vessels are fully utilized with sporadic cargo rolling. Port conditions are stable except for Abidjan where there are longer waiting times. In South Africa, demand is picking up and all vessels are full.

Asia Pacific - Oceania: Overall demand in June is strong and we expect the trend to continue in July.

Credit : Yan Jing Fu, Anna-Sophia Metzel, 08 July 2022