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  • Writer's pictureSynthetic Resources Inc

Synthetic Resources October edition

Winter is coming

There is a phrase which I am sure we all heard before. Winter is coming ! For many, Winter has already arrived. What do we need to know more of to continue to thrive in this environment? Know that Apple, Microsoft, Disney, Southwest and many Fortune 500 are all born out of winter. In this edition, our intention is to keep everyone informed on logistic transportation issues, Crude oil prices, Currency exchange rates, possibly anticipate some of the upcoming challenges? As always, we welcome any feedback or areas of information you want to know more of.

A new record has been set for ships at the ports of Los Angeles and Long Beach, while regular and contingency anchorages are “essentially” full.

On 25 September, the Marine Exchange of Southern California (MESC) reported 157 vessels at the San Pedro Bay ports for the

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CMA CGM immediately halts spot rate hikes through January 2022

Greg Knowler, Senior Europe Editor | Sep 09, 2021 1:43PM EDT

Soaring spot rates accompanied by record-low service levels are testing carrier-shipper relationships on the trades out of Asia. Rates on the major east-west trades have risen sharply through 2021 and continue to rise into the peak shipping season. China-North Europe spot rates of $7,522 per TEU this week are double what they were in January, while the $9,787 per FEU rate from China to the US West Coast is 2.6 times higher, according to rate benchmarking platform Xeneta.

Rates up, service down

As rates rose, service levels have deteriorated, with data from Sea-Intelligence Maritime Analysis showing Asia-North Europe schedule reliability in July of 22.2 percent compared to 90 percent in the same month in pre-pandemic 2019. On the Asia-US West Coast trade, on-time performance in July was at 15.7 percent compared to 75 percent in 2019.

Carriers have deployed all available vessel capacity on the major trades out of Asia to serve skyrocketing consumer demand in North America and Europe, shifting vessels from less-voluminous trades, deploying extra loaders, and adding container equipment. But the increase in deployed capacity is being offset by congested ports delaying vessels and inland logistics bottlenecks slowing equipment turnaround.

What’s influence cost of imports ?

As of Sept 2021, the USD currency continue to lean on the weaker side. US Dollar continue to depreciate and remain weak against both the TWD and CNY. Weak US dollar contributes to higher price . Our dollar are buying less and worth less and less each month.

3 Crude Oil price'>Crude Oil Prices - 70 Year Historical Chart</a>

Crude oil price continue to climb as everyone is feeling it at the pump.

The hit from China’s energy crunch is starting to ripple throughout the globe, hurting everyone from Toyota Motor Corp. to Australian sheep farmers and makers of cardboard boxes. The extreme electricity shortage caused by soaring prices of coal in the world’s largest exporter is set to hurt China’s own growth, and the knock-on impact to supply chains could crimp a global economy struggling to emerge from the pandemic.

The timing couldn’t be worse, with the shipping industry already facing congested supply lines that are delaying deliveries of clothes and toys for the year-end holidays. more

In summary, we expect ocean freight schedules continue to be a challenge for 4th quarter of 2021 due to all the backlog of vessels at every port.

Ocean Rate will start to stabilize due to less output of production due to China's energy crisis. Less export shipping out of China for 4th quarter and possibly affecting 1st quarter of 2022. A light at end of the tunnel possibly for ocean logistic to catch up.

The energy crisis for textiles will be challenged by shortage of chip, yarn, dyestuff, chemicals for PU coating and PVC. Price will continue to raise due to the shortage.

Lower Dollar exchange rates and high oil price will continue to drive inflation higher.

As 2021 coming to a close we are proud of our team's ability to reduce cost on excessive ocean freight and provide a consistent flow of goods for our clients during these turbulent times. Any questions or concerns, please feel free to reach out to your client executives.

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