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December China feeder services suspension portends early start to Lunar New Year: sources

Feeder services between production hubs in South China and export gateways, set to be suspended from mid-December to mid-February, are indications of an early start to the Lunar New Year shutdown in China, sources say.

Premature feeder cancellations because of quarantine requirements for vessel crews will put further pressure on the intra-Asia trade, C.H. Robinson said in a client advisory in early December. “A portion of regular coastal feeder and barge services operating between Pearl River Delta to Hong Kong, Yantian, Shekou, Da Chan Bay, and Nansha will be suspended as of [Dec. 15] to [Feb. 8,] 2022,” the company said.

In addition, in some production regions, workers are expected to be released up to two weeks early, which is likely to put further pressure on already overloaded capacity networks.

“Most of the workers will start their holiday from Jan. 15 or Jan. 22, which [is] almost two weeks,” a China-based freight forwarder said, adding that ocean and trucking fees are primed to rise dramatically in the period leading up to the holiday.

“Capacity outlook is constrained with potential rate increases on the horizon as pre-Chinese New Year demand forecasts remain strong and additional blank sailings are announced,” Flexport said in a Dec. 15 notice.

The Lunar New Year Feb. 1, which is accompanied by a seven-day public holiday in China, is typically a lull period in the ex-Asia container trade and could give ocean carriers an opportunity to reshuffle schedules to regain balanced schedule integrity.

However, as port congestion issues continue to press on the market, few sources expect a return to normalcy after the Lunar New Year.

This year, the holiday is followed by the Olympics, which start Feb. 4 in Beijing and could further hamper production activity in North China factories amid strict quarantine requirements.

Freight rates out of North Asia have risen in recent weeks after being generally rangebound in November, as shippers look to frontload first-quarter and Q2 restock cargoes ahead of the Chinese holiday.

Platts Container Rate 13 — North Asia-to-West Coast North America — was assessed at $9,000/FEU Dec. 20, on a FAK basis. PCR5 — North Asia-to-East Coast North America — was assessed at a record $10,500 Dec. 20.
Source: Platts

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