The exceptional situation of ocean freight

As you may be aware, this year has been like no other. The unprecedented events that have occurred in 2020 have made a dramatic impact on the supply chain and have caused market developments that have rarely been seen.

Regardless of the trade lane, regardless of the part of the world, we are witnessing problems that impact not only freight movement but also the cost of doing so.  

The shortage of empty equipment, the lack of space on ships and the increases in ocean freight rates are the main challenges we have faced in recent weeks.

There are many factors at play to allow this, but the key issues are:

  • Low air cargo capacity resulting in higher ocean freight volumes.
  • Increase in container demand due to increased cargo.
  • The control of the space supply on ships, both from the point of blank sailings, as well as by changes in rotations of large-capacity ships for routes where freight rates are substantially higher.
  • Shortage of empty 40′ and 40’HC equipment due to the fact that the shipping lines are not able to replace them at origin at the necessary speed.
  • Sudden increases in cargo volumes due to different “lockdowns” around the world.
  • Dramatic increases in the shipment of Personal Protective Equipment and other supplies related to Covid-19 (this will also increase as vaccines become available).

We foresee that the situation will continue to worsen in the next 3 or 4 weeks and, therefore, we’ll possibly see even greater increases in freight rates.

Carrier rates have increased exponentially and to levels not seen in decades, almost triple the usual. Bear in mind that even with these levels of freight rates, finding space on ships and available equipment is being a challenge, even despite having regularly protected space with the main shipping companies.

Please, confirm your LCL bookings as far in advance as possible to ensure space in our groupage containers, and we will do our best to minimize the impact on your logistics chains.

This is a situation that TransGlory cannot control, but we are committed to doing everything in our power so our customers and partners are the least affected as possible.