Market Update: Rates Yo-Yo…All Eyes on ILA

As the global logistics landscape continued shifting through late August and early September 2024, several converging disruptions were reshaping freight markets simultaneously. Carrier General Rate Increase (GRI) attempts on Asia to North America routes were failing to hold, Canadian rail operations were recovering from a brief but disruptive lockout, the Panama Canal was easing drought-related restrictions, and the ILA contract deadline loomed over every East Coast routing decision. This update covers the key developments across sea and air freight that were defining shipper strategy heading into Q4 2024.

Market Watch: Ocean Freight

Ocean freight markets in this period were characterized by rate instability — a pattern of carrier attempts to raise rates followed by shipper resistance and rollback. Understanding the structural dynamics behind each trade lane helps importers anticipate the next move rather than simply react to the current rate sheet.

Asia to North America

Not content with the failure of August 15’s General Rate Increase attempt, carriers moved to implement a new GRI of $1,000 effective September 1. As with the August attempt, market conditions made sustaining the increase difficult. The fundamental challenge: with healthy U.S. inventory levels, shippers had the luxury of delaying bookings and monitoring the ILA contract negotiation rather than committing to space at elevated rates.

The U.S. East Coast and West Coast were experiencing diverging conditions:

• To USEC: Shippers could delay bookings given the ILA uncertainty. Urgent USEC shipments could be rerouted via USWC, but USEC volumes were likely to weaken through September. A resolution with the ILA could prompt a freight surge to East Coast ports after Golden Week in early October. Adverse weather near the Cape of Good Hope was adding further delays and capacity variability for USEC services.
• To USWC: A different dynamic. Labor disruptions at USEC and Gulf ports combined with Canadian rail issues were pushing volumes toward USWC, alongside cargo rushes before China’s Golden Week holiday (October 1–7). A GRI was still possible for September 15 on USWC services. Carriers were restricting space and equipment availability for long-term named accounts as a priority measure.

The supply chain challenges created by simultaneous GRI attempts and labor uncertainty required importers to assess each routing option independently rather than applying a single booking strategy across their entire freight portfolio. Transloading options — particularly through West Coast warehouse and intermodal partnerships — became worth exploring for importers seeking USEC delivery with USWC departure flexibility.

Canada Rail Disruptions

The two largest Canadian railroads — CN and CPKC — faced a brief lockout that halted train movements for under 24 hours. While the stoppage itself was short, its effects were not: both railroads had embargoed shipments for more than a week leading up to the lockout deadline, creating a backlog that took an additional week or more to clear after train movements resumed.

For importers routing through Canadian ports or using cross-border intermodal connections, the rail disruption added uncertainty on top of the ILA strike risk. The combination was exactly the kind of scenario where supply chain risk management planning — with pre-identified alternative routes and partner relationships — made a measurable difference in delivery performance.

Panama Canal

On a more positive note, water levels at Gatun Lake had recovered sufficiently that Panama Canal authorities eased weight restrictions that had been reducing vessel capacity and creating scheduling uncertainty since late 2023. The easing allowed more vessels at higher load levels to transit, which gradually improved capacity availability on routes that use the Canal.

Looking further ahead, the Panama Canal Authority proposed a $1.6 billion project to dam the Indio River and build a 5-mile tunnel connecting a new reservoir to Gatun Lake — an infrastructure investment that could enable 15 additional ship transits daily and reduce vulnerability to future droughts. The project has faced criticism from local farmers and communities whose land may be affected, meaning its timeline remains uncertain.

India to North America

Rates from the Indian Subcontinent to North America peaked and began declining as new capacity entered the lane. Carrier competition for volumes on this route, combined with softening demand ahead of the ILA uncertainty, created a buyer-favorable environment for importers booking India-origin cargo.

U.S. Exports

Ocean rates for Q3 U.S. exports continued increasing, driven by sustained global demand. Key guidance for export bookings:

• Book 3–4 weeks in advance, particularly for inland origin points
• Capacity from the U.S. to the Indian Subcontinent and Middle East ports had tightened due to vessel omissions and blank sailings
• Export rates were less volatile than import rates but equally dependent on carrier schedule reliability

Asia to Europe

European container markets faced bearish sentiment as liner companies added capacity that tipped supply-demand balance. Extra loaders from other trade loops entered the market, pushing rates down despite continued Red Sea diversion costs. The divergence between European import demand and carrier capacity additions was creating downward rate pressure that benefited European importers while squeezing carrier margins.

Market Watch: Air Freight

The traditional air freight peak season runs September through December, and 2024 was setting up to be an unusually strong one. Shippers who had not already locked peak season rates or capacity were facing a narrowing window.

Asia to North America and Europe

Peak season surcharges and rate increases were expected as the September-December cycle intensified. Two specific factors were amplifying demand above seasonal norms:

1. Apple iPhone 16 launch: Apple’s flagship product began shipping in September, consuming significant transpacific belly capacity as high-value electronics moved by air ahead of the retail launch
2. Bangladesh normalization: Operations in Bangladesh had returned to normal after a period of political instability, but a massive cargo backlog at origin was creating a surge of air freight demand as exporters cleared delayed shipments

For shippers with time-sensitive cargo on Asia-North America or Asia-Europe routes, the combination of iPhone launch volumes, Bangladesh surge demand, and traditional holiday peak created a high-competition capacity environment. Booking in advance and maintaining relationships with multiple air carriers were the most effective hedges.

Operational Guidance: Navigating Rate Volatility and Multi-Disruption Risk

The August–September 2024 freight environment illustrated a recurring pattern in modern logistics: disruptions rarely arrive in isolation. The ILA strike risk, Canadian rail lockout, Panama Canal recovery, and air freight peak all demanded attention simultaneously. Teams with consolidated visibility had a structural advantage in managing this complexity.

Booking Strategy

1. Separate USEC and USWC booking decisions — market conditions and strike risk differed materially between the two coasts; a single strategy missed the nuance
2. Pre-position Golden Week cargo with September 25–28 cutoffs for October arrival — missing those windows meant dealing with mid-October capacity uncertainty
3. Book air capacity for time-sensitive goods early — September was the last week of pre-peak rates on most transpacific lanes

Supply Chain Visibility

Being able to track ocean, air, and land freight from a single dashboard gave operations teams the exception management capability to respond to disruption as it occurred rather than discovering delays after expected delivery dates passed. In a multi-disruption environment, that visibility premium translates directly into customer service performance.

The supply chain visibility software that supported real-time carrier tracking, exception alerts, and alternative routing modeling was the difference between reactive scrambling and proactive management during the September disruption cycle.

Tariff Planning Alongside Logistics Planning

The convergence of election-year tariff uncertainty with operational disruptions made integrated planning more important than ever. The trade advisory services teams doing the most useful work in this period were those connecting logistics routing decisions (which port to use) with tariff classification decisions (which HS codes face which rates under different scenarios) and landed cost modeling. Shippers who evaluated tariff exposure as a separate exercise from logistics routing were leaving money on the table.

Understanding the interaction between retaliatory tariffs, Section 301 duties, and routing decisions helped importers avoid situations where a cost-saving routing change inadvertently triggered classification complications at a different port of entry.

The freight market continued its yo-yo pattern through September 2024 — rates rising on some lanes, falling on others, with carrier behavior and geopolitical risk simultaneously pushing in opposite directions. Shippers who built flexible operations infrastructure, diversified their routing options, and maintained strong carrier relationships were navigating it successfully. Those relying on static booking patterns and manual tracking were getting caught in the disruptions repeatedly.