Golden Week, current cargo supply and declining rates
26 September 2022
China celebrates ‘Golden Week’ from 1 to 8 October. During this week, the entire country has a bank holiday and production is at a standstill. The large fluctuations in cargo supply around Golden Week tend to cause problems for importers. But with cargo supply declining and rates falling, everything seems to be better balanced this year. Can shippers finally have a rest?
Golden week has little impact on cargo supply and capacity
Cargo supply around Golden Week always varies greatly. For example, importers want to ship the last goods quickly before this week, so cargo supply is high. Goods that cannot be shipped because the boat is full, will not be shipped until after Golden Week.
In fact, many sailings are cancelled after Golden Week because factories have been idle for a week and there is not enough cargo to fill the ships. This normally creates great pressure on ship space, before and after the festivities.
However, unlike previous years, cargo supply versus capacity now seems much better balanced. Of course, due to the full week of downtime, shippers will not escape some blank sailings and roll-overs. Although, at the time of writing, this does not seem to be too bad, thankfully.
Roll-overs & Blank sailings are kept to a minimum
Admittedly, some blank sailings have already been announced. But this is no more than about 9% outage relative to full capacity from China. In addition, we will also have to deal with roll-overs.
Roll-overs are caused by improper use of capacity. Shippers often book more space than necessary. The reaction of shipping companies to this is that they no longer trust the volumes reported, which in turn leads them to take more bookings than they can dispose of.
Eventually a situation arises where cargo supply and space are not balanced and containers are rolled. So after Golden Week, this could cause some inconvenience. But this will not compare to the lack of space as we remember from previous years.
Decline in rates continues
Since late August, the rates have gradually dropped a bit. And, leading up to Golden Week, rates have begun to fall faster and in larger increments. Current rates have currently reached their lowest point in more than a year.
While the level now remains above pre-corona averages, it does not appear that the market is stagnating any time soon. Of course, this also has to do with expectations for the fourth quarter. Cargo supply will continue to decline, which naturally affects the level of ocean freight rates.
Of course, you don’t want to incur unnecessary delay for your shipment. To avoid this, it is important for importers to take into account all international holidays. Our desk calendar Asian holidays will help you to do just that. So you have a quick and easy overview of bank holidays in all origin countries.
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