With a pre-Golden Week rush pushing up freight rates, Canadian importers and shippers are looking at backlogs, higher costs, and capacity constraints.
Canadian importers and shippers are preparing for significant disruptions during China’s Golden Week 2024, which begins on October 1. With factories, suppliers, and companies across China shutting down for the seven-day national holiday, freight forwarders have advised importers to book their shipments early to avoid bottlenecks and surcharges.
China’s Golden Week is well-known in logistics and supply chains for causing significant disruptions worldwide. This year is no different. Nearly all businesses across China will shut down for the holiday week, which will halt production and disrupt shipping schedules across the globe.
Ocean carriers often avoid sailing during Golden Week. Although many ports and terminals will remain operational, the drop in manufacturing output and blank sailings mean shipments face long delays.
The slowdowns caused by blank sailings and reduced manufacturing output are also causing surges in freight rates. This means Canadian businesses are seeing increased shipping costs for goods imported from China.
Besides the anticipated freight delays, the Asia-North America trade lane is already experiencing pressure. Some of the world’s largest ports, including Yantian, Ningbo, and Shanghai, have been experiencing congestion since early September, with waiting times of up to two days.
Moreover, according to Drewry’s Cancelled Sailings Tracker, there will be 90 cancelled sailings between September 16 and 20 October, representing a 13% cancellation rate. 67% of the blank sailings will occur on the Transpacific Eastbound, 21% on the Asia-North Europe and Med, and 12% on the Transatlantic Westbound trade.
Canadian importers are struggling to secure space due to significant vessel shortages and tight capacity, especially during the ongoing peak season in the fall.
The peak season for global shipments ahead of Golden Week 2024 has already driven up freight rates on major east-west container routes. Canadian shippers face double-digit spot rate increases, particularly on the Asia-North America routes.
Some retailers are accepting rate hikes of $3,000 to $4,000 on their shipments as the pre-Golden Week rush tightens capacity, even with full commitment from their carriers.
As demand continues to surge, these heightened rates are expected to continue well beyond the holiday, potentially until the second quarter of 2025.
With the pre-Golden Week 2024 rush in full swing, Canadian importers are advised to book containers at least three to four weeks before the holiday and to factor in potential delays due to blank sailings and weather-related disruptions.
Additionally, it is recommended that importers maintain close communication with freight forwarders and suppliers to stay updated on shipping schedules
Please reach out to one of our trade professionals to discuss how to minimize import disruptions due to the anticipated manufacturing stoppages and freight delays.