Port congestion is causing delays
Shipping times from Asia to the US are continuing to rise as we approach the holiday season. Ports across the US and China are struggling to meet the current capacity needs, which is leading to delays in departure and arrival for goods. The Los Angeles—Long Beach hub is the most severely affected with more than 50 ships unable to dock. Other major US ports have seen backlogs over the last few months.
You can expect to see a 2-4 week delay in ocean freight shipments. If your goods have not left Asia yet, you may want to consider partial air freight.
Golden Week closures in China
China will celebrate Golden Week from 1-7 October and the major ports will be closed.
Extreme delays ahead for US imports
Trans-Pacific freight delays and extreme port congestion are continuing to delay imports, and may worsen in the coming months as import volumes continue to grow. We will also see fallout from the Suez Canal accident, as resulting congestion at European ports will limit the number of empty containers transported back to Asia. This in turn will reduce the number of available containers available for China to US shipments. Importers should also prepare for higher spot prices as the gap between supply and demand widens.
Lumi recommends placing orders as far in advance as possible and to consider budgeting for air freight in mission-critical cases.
Manufacturers based in Louisiana and Texas are still recovering from Hurricane Laura, though most production capacity has been restored.
Chinese manufacturers are at full capacity and working through peak season orders. Production will be shut down from October 1 to 8 for the Golden Week holiday.
Ocean freight rates from China to the US continue to climb following a general rate increase at the beginning of September. Eastbound transpacific freight rates are 140% higher than the same time last year.
Despite carriers restoring cancelled sailings, demand is currently outpacing capacity.
Hurricane Laura is impacting production at many facilities throughout Louisiana and parts of Texas. Freight routed through that region is also experiencing delays.
We are closely monitoring the situation. If you have active orders impacted by Hurricane Laura, we will contact you with specific updates.
The Lumi manufacturing network of remains fully operational. With peak season underway, take a look at our Peak Season Deadlines to see how lead times are impacted.
Ocean freight rates from China to the US are rising once again. A general rate increase was implemented on Aug 15th sending China to US rates to recent highs. While rates have increased to both US coasts, the West Coast has increased more dramatically with a 15% climb since the end of July. Eastbound trans-Pacific shipments booked for August 15 departures are paying about $3,600 per FEU to the West Coast and $4,100 per FEU to the East Coast.
Due to high ocean rates and delays, air freight rates are increasing and are likely to continue to through the month.
The Lumi network of manufacturers remains fully operational in the US and China. Increased demand is causing delays of 1-2 weeks in both countries.
Both ocean and air carriers continue to cope with increased demand and availability. Rates are steady for now, but are likely to increase in the near term.
The Lumi network remains fully operational, though some manufacturers are reporting capacity constraints. These constraints are mostly driven by demand related to the upcoming holidays.
Ocean carriers are adding capacity to transpacific shipping lanes for August. Current vessels are at full capacity and demand remains steady. Book in advance whenever possible.
After falling steadily since May, air freight rates are expected to rise through August with the launch of products from Sony, Apple, and Samsung.
Lumi’s network remains fully operational with no closures. Expect 1-2 week delays on some specialty items.
Steady volumes are keeping ocean rates high. Though capacity is tight, orders are currently shipping at regular volumes and cadence. Only 4.7% of sailings from Asia to North America have been “blanked” (cancelled) for Q3 compared to 14.7% in Q2.
With fewer converted passenger jets currently in use, air freight rates from China to the US are on the rise again.
Typically, back-to-school business puts a strain on shipping capacity in late summer. In the coming weeks, we may see volumes increase due to back-to-school volumes, and more generally as companies try to get out ahead of a potential COVID-19 resurgence.
The Lumi network remains fully operational with no closures. Expect 1-2 week delays on some specialty items.
Ocean freight and air freight rates are relatively unchanged from last week.
All manufacturers in the Lumi network are open. US manufacturers have not been impacted by the recent increase in COVID-19 cases.
After last week’s general rate increase, ocean freight rates have leveled off and look to remain stable for the the next few weeks. Improvements in capacity have helped and it is likely that short-term demand has peaked.
Air freight rates are beginning to normalize as the capacity crunch and PPE-driven demand continue to ease.