The COVID lockdown of Shanghai, China’s largest city by population, entered its third week with no clear signs of easing in the immediate future. There is some speculation that the lockdown could last through April and possibly into May. Very little international cargo is moving out of the Shanghai area, via ocean or air. Nearby ports including Ningbo are seeing an increase in volumes from the Shanghai area.
Carriers are responding to the North China slowdown by blanking sailings, and re-deploying some assets to other parts of Asia with more demand in the short term. Spot rates out of China are softening as a result of lower volumes as well as traditional slack season patterns. When the Shanghai lockdown eases or ends, there is likely to be an extreme imbalance between demand and supply of equipment and vessel space, key drivers of rate increases.
In the US, an import surge of cargo to east coast ports is looming. Carriers are launching more east coast services at the same time concerns over west coast labor contract negotiations are shifting cargo to avoid west coast ports. The Journal of Commerce reports that the ports of Charleston, Savannah, and Virginia saw a 16% volume increase during the first quarter of 2022, and that these ports are likely to see more vessels waiting, with longer wait times, over the next few months. Smaller ports including Boston, Baltimore, Wilmington, and Jacksonville are not experiencing congestion, but they lack the ocean services the larger east coast ports offer.
Imports from Europe to the US remain very challenging. Many carriers are canceling a number of Europe – US west coast services, routing cargo over the east coast and adding to the pressure on east coast ports. There is still a long booking window for space on Transatlantic Westbound, 6-8 weeks on most lanes.
Tensions are growing this week on the US-Mexico border due to a new inspection policy implemented by the State of Texas. Trucker protests against the inspections have virtually halted trade at major Texas border crossings. Delays should be expected across the entire US-Mexico border.
The outlook overall for the next 3-4 months points to continued disruption and congestion, and higher US inbound volumes. Advance planning is critical on all lanes and modes.
Your CVI team is here to assist you through these current market challenges. Ocean freight, air freight, domestic road/rail, and Customs Compliance – count on our dedicated professionals to care for you and your supply chain. Call us and let us show you what we can do!
Director, Pricing & Procurement
CV International, Inc.
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Rachel serves as Director, Pricing and Procurement for CVI. Her responsibilities include vendor selection, contract management and negotiation, transportation pricing, FMC compliance, and international agent network management.
Rachel began her career in international shipping with CMA-CGM America. She joined CVI in 2011, gaining experience in various departments with a focus on inside sales and marketing for the company. In 2014, Rachel assumed the role of Manager, Transportation, working on service procurement and development of client proposals. She has served in her current position since 2018.
A native of Norfolk, Virginia, Rachel earned her bachelor’s degree from the University of Michigan in 2005. She holds a Master of Business Administration with a concentration in Maritime and Supply Chain Management from Old Dominion University.
– Rachel Shames, Director, Pricing & Procurement, CVI
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