BCO’s Put Pen to Paper as Spot Rates Stabilize

Welcome to our latest Market Watch update, where we delve into the ever-shifting dynamics of sea and air freight. From the intricacies of Asia to North America routes to the latest trends in contract negotiations for 2024-2025, we analyze key developments shaping the industry. As supply and demand economics prevail in sea freight, and air freight rates remain elevated due to disruptions and e-commerce demand, we provide insights into the evolving landscape. Stay tuned as we explore fixed-rate contracts for the coming year and offer recommendations for navigating the complexities of global logistics. Don’t hesitate to ask us about fixed-rate contracts for 2024-2025.

Asia to North America

Supply and demand economics prevail as capacity continues to outpace demand while accounting for longer distance and transit times for Red Sea/Panama Canal detours. EC seems to have much more capacity with some WC voyages at capacity. We expect carrier capacity to increase in May to its highest point in 17 months.

Contract 2024-2025

BCO’s have started signing carrier contracts at rates 12-17% above last year.

• Total MQC requirement: at least 300 TEU for each NAC
• Weekly MQC requirement: at least 4TEU per week on single port pair
• Rates are valid from 01 May 2024 till 30 April 2025.
• Rates are inclusive of Bunker surcharges in Q2, which will be backed out at the time of filing and float quarterly per tariff.
• Rates are inclusive of GRI/DTHC/ACC/ Panama or Suez Canal surcharge
• Rates are subject to subject to ISPS/TSC/Carbon Tax if any.
• Rates are subject to PSS under mutual agreement.
• Rates are only applied to general cargo of legal weight.
• Rates are subject to the carrier’s final approval and contract filing.

Asia to North America

Air freight rates remain elevated as sea freight disruption and robust e-commerce shipments keep demand high. Year-on-year data shows global tonnages up by +8%.

Ocean carriers curb trans-Pacific blank sailings while boosting capacity
Container carriers are blanking fewer trans-Pacific sailings than they did the previous two years as the longer voyages around the southern tip of Africa during the Red Sea hostilities continue to pull capacity from global trade lanes. They’re on track to increase capacity in the Asia-US trades to the highest level in 17 months in May.
– Read More

More Chinese Companies to Be Added to U.S. Import Ban List
A list of companies banned over forced labor concerns is expected to grow in the next few months, says Laura Murphy, a Homeland Security adviser.
– Read More

IATA reports an 11.9% jump in air cargo volumes for February
February was the third consecutive month of double-digit year-on-year demand growth for air cargo, according to data released by IATA.
– Read More

UPS wins air cargo contract with Postal Service, replaces FedEx
UPS will replace FedEx as the dominant provider of domestic air cargo for the U.S. Postal Service for the first time in more than 20 years. The express delivery giant on Monday announced that the Postal Service has awarded it a “significant” contract to move the majority of the mail agency’s air cargo in the United States.
– Read More

Red Sea crisis nears boiling point, unable to heat up spot rates
Russian warships entered the Red Sea last Thursday, for what the Russian Pacific Fleet’s press service has stated was the performance of “assigned tasks within the framework of the long-range sea campaign.” This intentional vagueness has invited no small amount of speculation as to the ships’ true objectives.
– Read More

Shipping disruption and e-commerce demand driving up airfreight rates
The start of the airline summer season this month is likely to hit airfreight rates with an increasing amount of belly capacity on passenger routes.
– Read More

U.S. to Crack Down on Trade ‘Loophole’ Used for China Apparel Shipments
The U.S. will crack down on an import method, favored by e-commerce giants such as Temu and Shein, that has allowed cheap clothes from China to flow stateside with no duties and little scrutiny.
– Read More

Rerouting trucks and ships away from Baltimore: What early data shows
As the days add up after the March 26 collapse of the Francis Scott Key Bridge, companies that gather data from trucks and supply chains are beginning to get an idea of where trucks are rerouting in the catastrophe’s wake. Data on ship rerouting is less conclusive.
– Read More

Questions? All you have to do is contact us.

#makingtheworldsmaller