Omicron has spread to 57 countries, and shipping prices are going to rise again!

After the Alpha, Beta, Gamma and Delta variants, we are unfortunately facing a new variant, Omicron. As the Christmas holiday approaches, what impact will this have on cross-border people? Will it be like before, with a surge in demand and price increases in the supply chain, but logistics will be in trouble?

Omicron has spread to 57 countries, and shipping prices may continue to rise

On November 9, South Africa confirmed the first case of infection with the new variant. On the 26th, the World Health Organization (WHO) named the variant (B1.1.529) "Omicron" .

Since its discovery, the number of cases infected with this variant has continued to increase. WHO   The latest weekly epidemiological report on COVID-19 released on the 7th showed that the Omicron strain has appeared in 57 countries or regions, and most cases are related to travel.

From the time South Africa reported the new variant to the WHO (November 24) to November 30, in just a few days, at least 32 countries or regions around the world tightened entry restrictions on South Africa and other African countries. Among them, the United States, which sellers are more concerned about, banned travelers from eight countries including South Africa, Botswana, Zimbabwe, and Namibia as early as November 29. What's more, countries like Japan and Israel directly "closed their countries" and suspended the entry of foreigners.

The emergence of the new strain of "Omicron" has caused high vigilance around the world , and the shipping tension will be further aggravated.

Currently, the freight rate from the Far East to the US East Coast has stopped falling and rebounded, with the freight rate per FEU at US$10,427, an increase of 0.11%; the freight rate from the Far East to the US West Coast remained flat at US$6,730/FEU, and has maintained a high price for three consecutive weeks .

Many freight forwarding companies predict that due to the continued tightening of shipping space, ocean freight rates will continue to rise in December. Some freight forwarders even boldly predict that it is optimistic to restore pre-epidemic levels within a year .

For this reason, some operators expressed helplessly that the epidemic is really endless and has affected the lives of too many people .

All parties offer suggestions to solve port congestion

Although the Omicron mutant virus has pushed shipping prices to a new high again.

However, the main reason for the continuous rise in shipping prices is the congestion of global ports, which leads to low ship turnover efficiency . The liner companies can only continue to increase shipping costs to prevent more ships from going to the ports.

Among them, the congestion at the Ports of Los Angeles and Long Beach in the United States is particularly noticeable .

Earlier, US President Biden announced that the two largest ports in the United States, the Port of Los Angeles and the Port of Long Beach, will implement a 24-hour-a-day , 7-day-a-week work system to solve the problem of port cargo congestion.

On the other hand, new regulations have been introduced for ships waiting in line to unload at the Ports of Los Angeles and Long Beach to ease the problem of "long queues".

The new rules assign each ship a queuing "pit." They require container ships at the Ports of Los Angeles and Long Beach to slow down and spread out. They must stop at designated spots while waiting for a port berth . Slowing down reduces fuel consumption and emissions, and ships can arrive at ports when berths are available.

Jim McKenna, CEO of the Pacific Maritime Association , said the new queuing process is fairer and more transparent and will significantly reduce the number of ships berthing near the ports of Los Angeles and Long Beach while helping the ports operate as efficiently as possible.

However, according to the latest data, there are 36 container ships anchored at the anchorage, 25 other ships waiting to berth within 40 miles, a total of 61 ships, and 32 container ships whose actual arrival time is earlier than CTA, with a total waiting number of 93. At the same time, the average waiting time for ships is 18.6 days.

In general, the queue order has changed, and there has been no substantial change in the number of ships waiting to berth at the ports of Los Angeles and Long Beach.

In addition, the Port of Los Angeles and the Port of Long Beach have previously announced a policy to impose surcharges on shipping companies for old cargo at the ports .

The policy charges shipping companies a surcharge of $100 per container for containers that are overdue at the port , and an additional $100 per container per day until the container leaves the terminal.

However, the policy was delayed for the third time on November 29. The reason is that the port has made good progress in reducing cargo accumulation. Since the first announcement of the intention to levy fines on October 25, the number of containers at the terminal has dropped by 37%.

But in reality, has port congestion really been alleviated?

The policy is effective , but the port situation is still " red light "

Although the penalty policy has not yet been officially implemented , it has played a "threatening" role on many cargo ship containers . The speed at which containers leave the port has increased significantly, reducing the amount of old goods piled up in the port by about 33%.

However, according to the daily operations report of the Port of Los Angeles, the number of containers detained for more than 9 days has increased to 23,000 in the past three weeks, and the total number of containers on the terminal is still rising.

According to the National Retail Federation 's November Global Port Tracking Report , imports in 2021 are forecast to increase by 16.2% compared to 2020. Imports in the first half of 2022 will increase by 2.9% compared to the same period in 2021. This also means that the port may not be blocked until 2022 before there is a glimmer of hope.

Not only that, the shortage of port workers has led to slow unloading and an increasing pile of containers; the US welfare system has also reduced the enthusiasm of American workers, who would rather receive relief than work; the containers piled up at the port have generated huge detention fees, which has caused some shippers to simply give up picking up the goods ... Now, the mutated Omicron epidemic has made the already restless ports even worse.

Based on the above reasons, it remains to be seen when the problem of soaring shipping prices caused by port congestion can be solved.

Holiday sales expected to grow despite port congestion

There are less than three weeks left until Christmas. However, many Americans' Christmas gifts may still be "drifting" on the sea...

Despite supply chain issues, high inflation , the Omicron variant, and more, the National Retail Federation ( NRF) remains optimistic that holiday retail sales in November and December this year may increase by 11.5% over last year to between $843.4 billion and $ 859 billion.

In addition, CNBC also conducted a survey of American consumers in early December . The results showed that this year, Americans plan to spend an average of $1,004 on gifts , a 13% increase from last year . Among them, 15% plan to increase spending, higher than 11% in 2020; 35% plan to reduce spending, lower than 39% last year.

Of those who spent more, a third said it was because they had more money, a quarter said it was because they had to buy gifts for more people and 16% blamed higher prices.

The survey also found that half of Americans said they do most or all of their shopping online . Among them, 35% of Americans ' first choice is Amazon ; second is Etsy and other local business websites ( 7% ); and then Walmart.com ( 5% ).

NPD noted that as more people get vaccinated , people should hold more holiday celebrations this year than last year. This will drive sales of cookware, tableware, and beverages . At the same time, sales of women's styling tools, steam irons, oral care products , and massage devices to relieve holiday stress should also increase.

However, as the epidemic is still there and Omicron has appeared , consumers will still pay attention to health and hygiene. Therefore, vacuum cleaners, air purifiers, floor cleaners, deep carpet cleaners, bedding and bath essentials are also expected to usher in a peak sales season.

Although this year’s Black Friday and Cyber ​​Monday sales performance is not as good as last year’s, the Christmas holiday is still something that sellers are looking forward to, and they hope a miracle will happen.

Omicron

Ocean Freight Prices