OCEAN FREIGHT

M A R K E T U P D AT E
JUNE 2022
Contents
01 HIGHLIGHTS

02 FOCUS

03 TRADE ROUTE ANALYSIS

 HIGHLIGHTS (1/2)
The Shanghai lockdown finally ended on June 1st after a ten-day Thus, the surge in shipments forecast by some observers could be
period of progressive resumption. Consequently, the daily container short-lived.
throughput, which was running at severely reduced capacity in
Whether there is a volume rebound or not, shipments will arrive at
April, returned to 95.3 % of the normal level in late May, allowing
still severely congested North European ports, especially
a double-digit export growth and an import increase for the first
Hamburg, Rotterdam, Antwerp and Bremerhaven. Yard
time in three months ahead of the summer peak season.
occupancy is very high and inland operations (feeder, barge, rail,
During the two-month Covid restrictions in the Shanghai region, trucking) are heavily impacted too.
which were coming just after the CNY and in a context of slack
An expected boomerang effect of the larger number of blank sailings
demand, carriers have succeeded in managing their capacity by
out of Asia in April and May will be particularly prejudicial to
using the well-known blank sailings recipe. According to Project44,
European exporters who will find themselves short of departures at
ocean alliances blanked 33 to 39 % of their scheduled sailings
the end of June and in July, when European exports are particularly
between weeks 17 to 23, thus preventing any dramatic falls in short-
strong in advance of annual production plant closures.
term rates. With the reopening of Shanghai and the resumption
of exports to Europe and the US, spot rates from Asia are set to Another undesirable effect of the blank sailings is that they will
rise in the coming weeks. automatically limit the ability of the carriers to reposition empty
containers in Asia during the summer, with the risk that this will
This recovery could mean an earlier peak season as from June, and
cause a new equipment shortage there at the start of the second half
carriers are announcing a gradual increasing of the capacity up to the
of the year.
beginning of August. However, due to a high running inflation in most
countries and the uncertain geopolitical situation, the global demand
is weakening and is now expected to grow -1/+ 1%.

SEA MARKET UPDATE JUNE 2022 3

 HIGHLIGHTS (2/2)
Shipping Industry Service

As liner average operating margins broke all records in the first

quarter, the container shipping industry is on track to post new
profit heights in 2022.
CMA CGM Air Cargo has just received its second 777 freighter in a
week and has officially announced a further order for two aircrafts to
be delivered by 2026. Meanwhile, Maersk closed the acquisition of
Senator, the air-focused forwarder, aiming at “offering an even
wider range of products and the ability to provide flexible and
integrated logistics solutions to its customers, allowing them to speed
up or slow down cargo depending on their changing supply chain
needs.”
CMA CGM and Air France-KLM have formed an alliance: the
world's third largest shipping company and the world's largest air
carrier have signed an exclusive ten-year partnership agreement to
pool their airfreight networks, with CMA CGM taking a stake of up to
9% in Air France-KLM.
Despite M/M improvements in both February and March, global
schedule reliability declined MoM in April 2022 by -1.3
percentage points and reached 34.4%. Schedule reliability in 2022 is
following the trend seen in 2021 with very little MoM volatility but at a
very low base. This also meant that the April 2022 score was down
by -4.7 percentage points YoY.
The average delay for late vessel arrivals on the other hand
improved MoM, decreasing by -1.04 days to 6.41 days in April 2022.
With this improvement, the average delay figure has now dropped
below the 7-day mark for the first time since August 2021. That said,
the average delay continues to be the highest across each
month when compared historically.

SEA MARKET UPDATE JUNE 2022 4

FOCUS
SHIPPING LINES GLOBAL SCHEDULE RELIABILITY

The Global Liner Performance database covers the majority of the deep-sea service
identified from 60 different carriers. Currently, the GLP database cover more than 295
active services and more than 165 inactive services, based on more than 430.000
individual vessel arrivals, across 34 major trade lanes.

Sources: Global Liner Performance May 2022 SEA MARKET UPDATE JUNE 2022 5
FOCUS
CARRIERS’ NEWBUILDING DELIVERY SCHEDULE

Sources: Alphaliner Monthly Monitor SEA MARKET UPDATE JUNE 2022 6

 CLICK TO GO TO EACH TRADE LANE

EUROPE ASIA
NORTH
PACIFIC
AMERICA

SEA MARKET UPDATE JUNE 2022 7

 Market is expectedto be strong as Shanghai
MARKET OUTLOOK | ASIA Decrease of the rates compared to last month
has started the gradual ease of COVID in the below context:
restrictions in June. Surge A surge in June
export volumes is be expected, rates will go RATE EVOLUTION RATE EVOLUTION - Slight slackening of the demand to North
up and equipment shortages might become a
concern again. Carriers might want to canvas INTRA ASIA SOUTH ASIA / EUROPE - Europe still planned till the end of the year
more cargo into China since restrictions have (Shanghai-Singapore) (Nhava Sheva - Rotterdam)
been eased. - Less shortage of containers

Intra Asia have to compete with long haul - Limited space that leads to regular
market for feeder space and empty containers congestion in main transhipments ports like
and this will further aggregate the market Colombo
condition.
- Increase of the fuel surcharge
Volatile market is still to be expected in view of
equipment instability, the Covid situation, and - Carriers will still push for spot rates and
the market economics. premium rates to have space and equipment
in priority for short and mid-term solutions
Direct Service pattern is preferred by
customers instead of transshipment service to OUTLOOK OUTLOOK
avoid delays due to port congestion.
CAPACITY DEMAND UTILIZATION RATES CAPACITY DEMAND UTILIZATION RATES
Higher bunker costs are expected and carriers
might start to increase the frequency of
adjusting the BAF amount.
Q2 2022     Q2 2022    
Blank sailings are expected in view of ongoing
congestion and service reliability will remain a June 2022     June 2022    
concern.
Q3 2022     Q3 2022    
Q4 2022     Q4 2022    

 Upward trend
 Flat trend
 Downward trend
Source: Bolloré Logistics, Drewry Index SEA MARKET UPDATE JUNE 2022 8
 Softening ocean indicators clash with pending
MARKET OUTLOOK | ASIA Market volumes will continue to be weak for
post-lockdown surges. June but carriers are expecting Shanghai to
face with cargo rush resulting from the
Uncertainty surrounding the timing and speed
at which Shanghai’s logistics sector will fully
RATE EVOLUTION RATE EVOLUTION gradual end of restrictions. Carriers
utilization remains high and space is
re-open after Covid lock-downs is making it ASIA / NORTH AMERICA ASIA / SOUTH AMERICA reported tight.
increasingly difficult to plan for the second half
(Shanghai-Los Angeles) (Shanghai-Lazaro Cardenas)
of the year.
Carriers are doing impromptu omissions at
Chinese exporters could produce another Shanghai as they distribute their
trans-Pacific bullwhip when stalled shipments allocations to other POLs. Doing adhoc
start moving again, with major stakeholders calls at other POLs to manage their space.
warning of a surge of delayed shipments.
CMA announced calling POSORJA instead
New data suggestions of renewed and of Guayaquil effective August for Ecuador
widespread port congestion in the US this discharge.
summer are valid, particularly if growing
imports collide with the start of peak shipping FAK rates had been on weekly validity as
season and the return of normal cargo flow the carriers are watching the market closely
from post-lockdown Shanghai. OUTLOOK OUTLOOK
for any increase. Rates are seen extended
on weekly basis waiting till the last minute
Delays, schedule reliability deterioration, and CAPACITY DEMAND UTILIZATION RATES CAPACITY DEMAND UTILIZATION RATES
equipment shortages are increasing also due
for rate updates, rates have increase for
to continued vessel diversions. the 2nd week of June.
Q2 2022     Q2 2022    
Asia-US container shipping indexes are down Carriers’ pricing strategy remains the same.
around 20%-30% from peaks due to June 2022     June 2022     No one offers quarterly or long-term NACs
decreased shipping following Shangai’s and tenders as their commitment for long-
lockdown. Q3 2022     Q3 2022     term tenders and BCOs are over their
Increases in industrial production and retail allocations. The solution is to use NVOCC
sales in April suggest continuing strength in
overall freight demand.
Q4 2022     Q4 2022     or on premium for space and equipment.

Equipment shortages in China are increasing.  Upward trend

 Flat trend
 Downward trend
Source: Bolloré Logistics, Drewry Index SEA MARKET UPDATE JUNE 2022 9
 Q2 2022 overall progressive slowdown trend
MARKET OUTLOOK | ASIA As Shanghai is gradually fully reopening, the
due to latest COVID-19 outbreaks in main backlogs caused by the lockdown will be
ports China seems to recover and volumes arriving at the same time as the traditional
are expected to be stronger for end Q2 2022. RATE EVOLUTION RATE EVOLUTION summer peak season orders, which could
Rates have been extended for the first half of cause a lot of supply chain blockages at ports
June, but market is expected to increase for ASIA / AFRICA ASIA / EUROPE in Europe where congestion are heavily
the last weeks of June. impacting the operations.
(Shanghai-Lagos) (Shanghai-Rotterdam)
Space is getting tighter as local Chinese Even a moderate restart of the export will
activities are recovering because of lockdown have a huge impact on the market and will
easing up. We can also notice important lack oblige the shipping lines to increase the blanks
of equipment in the Southeast Asia zone. This sailings and omits in order to maintain the
was the alternative zone for importers since quality service.
Chinese sourcing was on hold for 2 months.
Feedering issue remains, mainly out Vietnam, Before the new orders can get out from
and Thailand. Shanghai port, shippers will face
manufacturing backlogs, full warehouse,
Space is expected to face strong shortage for equipment and trucking shortages, landside
the last weeks of June. Lack of equipment and congestion, shortage of raw materials to
local Asian congestion issues are still in place. OUTLOOK OUTLOOK restart production.
Average rates are stabilizing, for
Shanghai/Abidjan. CAPACITY DEMAND UTILIZATION RATES CAPACITY DEMAND UTILIZATION RATES On the other side economic factors
are showing that inflation increased, and
EAF/SAF markets are still facing space consumers are spending more on services
tensions, demand is remaining strong on
Q2 2022     Q2 2022     than on products.
these axes.
June 2022     June 2022     These factors might augure that the rush will
NAF trade is still suffering from a very limited not be as strong as expected but it will come
space/equipment situation with few services Q3 2022     Q3 2022     as always during the peak season and
available. combined with the bunker inflation it will
Q4 2022     Q4 2022     increase rates on the spot market.

 Upward trend
 Flat trend
 Downward trend
Source: Bolloré Logistics, Drewry Index SEA MARKET UPDATE JUNE 2022 10
 South America East Coast (Brazil, Argentina,
MARKET OUTLOOK | EUROPE
Uruguay) is under some congestion but is still
under control. Still complicated to export
businesses ex Le Havre as there are only two
carriers calling Le Havre in direct to SAEC
(Hapag Lloyd and MSC).
To South America West Coast, North Coast
and Carribean, situation is indeed more
complicated. On the West Coast, there are
more and more congestion, and terminals are
suffering of a lack of chassis at destination.
Situation ex WMED to Latin America is out of
control, as all carriers are on stop booking.
To this day, demand remains very high and
space on vessel is still very tight.
RATE EVOLUTION RATE EVOLUTION Due to the lockdown in China, a lack of
equipment is still faced in Europe as the
majority of the containers are on board on
EUROPE / SOUTH AMERICA EUROPE / NORTH AMERICA vessels which were waiting in Asia. Now that
(Rotterdam-Santos) (Rotterdam-New York) the lockdown is over in China, the massive
congestions should move to the USA East and
West Coast, and in Europe.
Docker’s union is currently renegotiating its
rights on US East and West Coast ports. If
dockers cannot find any agreements huge
strikes should be expected in the US.

Mexico is starting to get impacted by the Demand is still very high to Canada but the
congestion in the US. Some carriers such as situation is not as bad as in the USA. No huge
CMA CGM are omitting Veracruz and Altamira congestion in Montreal. Slight congestion on
from time to time. OUTLOOK OUTLOOK terminals that slowed down oncarriages ex
Montreal to Door Deliveries at destination.
Hapag Lloyd cut 80% of the allocations of CAPACITY DEMAND UTILIZATION RATES CAPACITY DEMAND UTILIZATION RATES
ONE on AL4. Meaning that to this day: ONE, Vancouver is on the other hand highly
YML, Evergreen, OOCL do not have enough
space to accept new FAK and NAC
Q2 2022     Q2 2022     congested.

businesses. Every booking is subject to space

availability. Only solutions are CMA CGM, June 2022     June 2022    
Hapag Lloyd and MSC.
Q3 2022     Q3 2022    
Q4 2022     Q4 2022    

 Upward trend
 Flat trend
 Downward trend
Source: Bolloré Logistics, Drewry Index SEA MARKET UPDATE JUNE 2022 11
 The same challenges are foreseen this month
MARKET OUTLOOK | EUROPE Europe/Middle East trade is following the
with an overall demand higher than capacity Europe/Asia trade.
leading to space pressure and equipment
restrictions without any fresh capacity entering RATE EVOLUTION RATE EVOLUTION Capacity is still tight for the Middle East anthe
the market. d situation will remain the same up to the end
of the year.
On the West Africa trade, carriers continue to
EUROPE / AFRICA EUROPE / MIDDLE EAST
apply Equipment imbalance surcharge and (Rotterdam-Lagos) (Rotterdam-Jebel Ali) Carriers’ priority is presently to send empties
PSS. First indications show that carriers will to Asia as quickly as possible in order to have
extend rates over June. equipment available for the westbound peak
season of this summer.
East Africa’s market is still globally decreasing.
In June, Rates from Europe to East Africa will Rates are maintained on the high curve.
increase and no capacity issues will occur
Carriers are reluctant to grant free time
The NAF market is relatively stable and similar whatever POL or POD, they need equipment
is expected in Q2 2022. average turntime to be reduced in order to
optimize revenues.
Into SAF and for Q2 2022, we still foresee
space issues due to limited-service options. OUTLOOK OUTLOOK

CAPACITY DEMAND UTILIZATION RATES CAPACITY DEMAND UTILIZATION RATES

Q2 2022     Q2 2022    
June 2022     June 2022    

Q3 2022     Q3 2022    
Q4 2022     Q4 2022    

 Upward trend
 Flat trend
 Downward trend
Source: Bolloré Logistics, Drewry Index SEA MARKET UPDATE JUNE 2022 12
 West Indies continues its growth in the same
MARKET OUTLOOK | EUROPE Demand has been gradually recovering and is
trend as previous months but as expected, we still stronger than the capacity from carriers
noted a slight decrease of space pression with with even vessels running fully in the Indian
CMA to French West Indies from North West RATE EVOLUTION RATE EVOLUTION Ocean trade.
continent ONLY. No more stop booking have
been announced by CMA to Guadeloupe & Space remains tight for Q2 under VSA
Martinique.
EUROPE / FRENCH WEST INDIES EUROPE / INDIAN OCEAN between CMA & MSC.
(Le Havre-Pointe-à-Pitre) (Le Havre-Reunion)
From MED to Antilles and from NWC to The global operational situation remains tense
Guyane, the situation remains very for VSA, still experiencing vessel berthing
complicated with overbooked vessels and delays and port congestions in many terminals
huge backlogs. We don’t see any signal of of the rotation. Schedule recovery service
improvement before July. CMA has just rotation taken by carriers in order to minimize
changed its transshipment port from Asia, the impact with an average delay of 10/15
(Carthage instead of Valencia to reduce space days Northbound.
pressure).
CMA has announced a updrade with a
Bookings have to proceed at least 2 or 3 fifteenth vessel.
weeks before departure to secure space and
equipment OUTLOOK OUTLOOK Maersk has announced a loss of 5 days for TT
to Pointe des Galets only.
CAPACITY DEMAND UTILIZATION RATES CAPACITY DEMAND UTILIZATION RATES

Q2 2022     Q2 2022    
June 2022     June 2022    
Q3 2022     Q3 2022    
Q4 2022     Q4 2022    

 Upward trend
 Flat trend
 Downward trend
Source: Bolloré Logistics, Drewry Index SEA MARKET UPDATE JUNE 2022 13
 MARKET OUTLOOK | EUROPE
RATE EVOLUTION OUTLOOK

EUROPE / ASIA
(Rotterdam-Shanghai) CAPACITY DEMAND UTILIZATION RATES

Q2 2022    
June 2022    
Q3 2022    
Q4 2022    

Shanghai is progressively reopening, this will enable carriers to deliver shipments they diverted to other ports (some containers have been stuck for a month in
Singapore due to a lack of capacity for IMO cargo on Shanghai terminals).
Chinese customers will soon also be able to load most of their delayed shipments to Europe and the USA.
As stated by Drewry, about 260 000 teus couldn’t be loaded from Shanghai in April. This will create a kind of « tsunami » in European and USA terminals, already
highly congested and saturated.
Vessels are arriving in general 20 days late in China, forcing carriers to adjust the rotations by omitting some ports.

Carriers’ priority is presently to send empties to Asia as quickly as possible in order to have equipment available for the westbound peak season.
Rates are extended, from North Europe, they are on a quite low level whereas from the Mediterranean they are maintained on a higher level.

Source: Bolloré Logistics, Drewry Index SEA MARKET UPDATE JUNE 2022 14
 MARKET OUTLOOK
No major capacity changes in June, demand
remains steady in June.
| NORTH AMERICA | No major capacity changes in June, and
demand remains steady in June.

Schedule reliability is still at a record low due RATE EVOLUTION RATE EVOLUTION Schedule reliability is still at a record low due
to ongoing port congestion on both US and EU to ongoing port congestion in both US and EU
ports. NORTH AMERICA / EUROPE NC INTRA AMERICAS / NORTH SOUTH ports.
(New York-Rotterdam) (New York-Santos)
The suspension of shipping to Russia and The suspension of shipping to Russia and
Ukraine continues into June until further Ukraine continues into June until further notice
notice.
Containers are piling up in EU hubs attributing
Containers are piling up in EU hubs attributing to the congestion.
to the congestion.
Another wave of congestion may occur at
Another wave of congestion may occur at European ports post-Shanghai’s lockdown
European ports post Shanghai’s lockdown
Rate levels are expected to remain flat in
Rate levels are expected to remain flat in June.
June.
OUTLOOK OUTLOOK Inland rail costs continue to increase with
Inland rail costs continue to increase with some carriers removing the Inland rail table
some carriers removing the Inland rail table CAPACITY DEMAND UTILIZATION RATES CAPACITY DEMAND UTILIZATION RATES from the contract which means the validity of
from the contract which means the validity of the Inland charges has changed from
the Inland charges has changed from quarterly quarterly to spot.
to spot.
Q2 2022     Q2 2022    
Vessels are open 6 to 8 weeks in advance
Vessels are open 6 to 8 weeks in advance due June 2022     June 2022     due to high demand.
to high demand.
Q3 2022     Q3 2022    
Q4 2022     Q4 2022    

 Upward trend
 Flat trend
 Downward trend
Source: Bolloré Logistics, Drewry Index SEA MARKET UPDATE JUNE 2022 15