In April, the number of empty flights and port skipping on the European and American routes increased! Ocean freight prices may rise again

According to the latest reports, the impact of the recurrence of the epidemic in some parts of China on the global supply chain is entering the second stage. The chaotic shipping schedule and the worsening congestion at domestic ports have led to an increase in empty flights and port skipping on the European and American lines at the end of April. With the peak demand in Europe and the United States approaching in summer, shipping prices may rise further.

During the first phase of the outbreak in Shanghai, container ships at the Port of Shanghai continued to operate almost as usual. However, because ships used less capacity than planned when departing from Shanghai, shipping companies loaded cargo at other ports, and containers entering the port could not be delivered to importers, exacerbating port congestion.

This is also the main reason why China's exports slowed to the weakest pace since June 2020, while imports may shrink for the second consecutive month.

Phase 2: Tight shipping capacity and rising freight rates

Lars Jensen, CEO of Vespucci Maritime, said that due to the chaotic shipping schedule and increased port congestion, the number of empty sea freight flights may continue to increase. At the end of April, the number of empty sea freight flights on the Asia-North Europe route increased. In May, the number of empty sea freight flights on the Asia-US route also increased.

Considering that the Shanghai area is still under lockdown, shipping lines will reach their limits in maintaining normal vessel schedules in Shanghai. Unless Shanghai reopens soon, the number of cancelled sailings is likely to increase. In addition, the number of skipped calls at the Port of Shanghai will increase in order to safeguard the schedules of the remaining routes.

Jensen noted that July and August are expected to see fewer containers repositioned at the port of Shanghai, which coincides with the peak season and could lead to further increases in spot freight rates.

Phase 3: Increased congestion and further increases in freight rates

Analysts pointed out that the third phase will be marked by the reopening of Shanghai, which will generate an increase in load, laying the foundation for capacity shortages and pressure on freight rates. In addition, the peak season usually starts in late August and ends in November, and this year it may start earlier.

Shipping times from exporters in China to importers in the U.S. and Europe are taking two months longer than normal before the pandemic, according to Flexport. Foreign importers have learned a lesson from 2021, when inbound shipments for Black Friday and the holiday season did not arrive on time.

As a result, foreign importers will want to move their orders forward a few months to make up for expected delays, potentially leading to tighter capacity. In fact, companies like Amazon, Walmart, and thousands of other importers of furniture, toys, home goods, and electronics are already doing this.

Meanwhile, Western ports are bracing for even greater congestion when parts of China reopen. The Ports of Los Angeles and Long Beach in California, which handle more than a third of containers entering the United States, remain swamped with unallocated cargo.

Jensen noted that since China’s current shutdown is a political decision, many importers will start looking at moving some of their manufacturing out of China to avoid further risk and uncertainty, which could benefit manufacturers in other Asian countries, which would constitute a lengthy fourth phase.

Editor✎ Ashley/

Disclaimer: This article is copyrighted and may not be reproduced without permission.