In our July 9, 2024, market update, we examine the persistent challenges in the global shipping industry. Asia to North America routes face equipment shortages, space constraints, and increasing rates, with new General Rate Increases (GRIs) and stringent weight limits impacting shippers across the board. India to North America freight rates are surging due to space and equipment issues. The Panama Canal Authority has increased draft limits and daily transits. In Europe, container rates continue to rise amidst strong demand. Air freight tonnage is also increasing as shippers seek faster transit times amid ongoing ocean freight volatility.
These dynamics reflect a global shipping environment under significant strain — one that demands real-time intelligence and proactive planning. Understanding how these pressures interact across trade lanes is essential for any importer or exporter managing costs and delivery windows in the current environment. Our supply chain visibility software gives your team the live shipment data needed to make faster, better-informed routing and sourcing decisions when market conditions shift quickly.
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Asia to North America
The Asia to North America trade lane continues to be among the most stressed corridors in global ocean freight, with equipment availability, space constraints, and rising surcharges all converging to create significant headwinds for shippers. Here is a breakdown of current conditions and what they mean for your supply chain.
Equipment Shortages and GRI Implementation
Equipment shortages persist across North America. As of July 1, a new GRI (General Rate Increase) has been implemented, with the East Coast (EC) rate running at approximately double that of the West Coast (WC). Carriers strongly prefer running services to the US West Coast due to shorter transit times and higher spot market revenue. On the US East Coast, stringent weight limits set by carriers are exacerbating issues further — Maersk, for example, has imposed Heavy Weight Surcharge (HWS) fees of $400 per 20′ container and $800 per 40’/HC container for boxes over 20 metric tons. These limits reflect the physical constraints of fully loaded vessels where every cubic meter of capacity is committed.
- New GRI effective 07/01 — East Coast rate approximately 2x West Coast rate
- Carriers prioritizing USWC services for shorter transit and higher spot revenue
- Maersk HWS fees: $400/20′ and $800/40’/HC for containers over 20 metric tons
- Peak Season Surcharge (PSS) now applies to all fixed-rate contracts as of 07/01
- Many NAC (Named Account Contract) allocations have been reduced or not honored by carriers
Space Scarcity and Advanced Booking Requirements
Space is scarce across virtually all major Asia-North America trade lanes, requiring bookings several weeks in advance to secure reliable equipment and departure windows. Shipping lines are responding by offering additional services, including expedited options and space guarantees, but these come at a premium cost. Extra loader (XL) sailings are helping to reduce the backlog in Asia and improving conditions somewhat for the Pacific Southwest (PSW). However, the East Coast remains severely overbooked, with an average delay of 7 days at port. Shippers should anticipate continued difficulty securing first-choice vessel departures through the peak season.
The combination of space scarcity and rate pressure makes this an environment where your Control Tower platform becomes especially valuable — giving your team live visibility into vessel schedules, booking confirmations, and port congestion so you can respond before delays cascade downstream.
India to North America
The Indian Subcontinent trade lane is experiencing some of the sharpest rate increases in the current market cycle. Freight rates from India to East Coast North America have surged over the past week, driven by a combination of severe space constraints and equipment shortages that have no immediate relief in sight.
Due to the severity of the space constraint on India to US West Coast services, Hapag-Lloyd has introduced a new routing solution that sends containers to US East Coast ports first, then moves them by rail and road to their final West Coast destination. This hybrid intermodal approach adds transit time but provides a workable alternative for shippers who cannot secure direct West Coast bookings. Importers sourcing from India should plan for:
- Rate premiums above standard Asia-origin pricing for comparable lanes
- Extended lead times due to service diversions and equipment repositioning
- Reduced carrier flexibility on allocation commitments under existing contracts
- Potential need to evaluate alternative routing via East Coast + inland transload
US Exports
The US export market is also feeling the effects of global demand pressures. Ocean rates for the second half of 2024 are increasing, driven by a surge in demand across multiple trade lanes. US exporters are advised to book 3-4 weeks in advance, particularly when cargo originates from inland locations where equipment availability can be even more constrained than at coastal ports. Proactive planning and early booking are the most effective tools available to manage cost exposure in this environment.
Panama Canal Update
The Panama Canal Authority (ACP) has announced encouraging progress in restoring normal operations. The maximum authorized draft was raised by another 30 cm to 14.3 meters, with a further increase to 14.63 meters scheduled for July 11. In addition, a new booking slot for the neopanamax locks will be added beginning August 5, bringing the total number of transits to 35 ships per day. While this represents meaningful improvement from the severe drought restrictions that disrupted global shipping earlier in the year, full normalization will take additional time to filter through vessel schedules and routing patterns.
The Panama Canal’s recovery is broadly positive for global shipping capacity, as it allows vessels that had rerouted around the Cape of Good Hope to return to shorter, more fuel-efficient trans-isthmus transits. This should gradually ease some of the capacity pressure on Asia-North America routes as vessel availability improves. For a broader look at how these infrastructure dynamics affect your total logistics cost exposure, our supply chain risk management team can help you model alternative routing scenarios.
Asia to Europe
Container freight rates in Europe soared in the week ended June 28, as shippers maintained strong demand into North Europe amid ongoing supply-side challenges. Rates are expected to continue rising through the first half of July before potentially plateauing, though market participants remain cautious about predicting the peak. Despite bullish sentiment in the near term, there is an expectation that rate hikes will eventually curb, with most participants predicting August as the likely inflection point. Shippers with European origins or destinations should plan for continued elevated costs and reduced schedule reliability through at least Q3 2024.
Asia to North America/Europe — Air Freight
Global air freight tonnage continues to increase as shippers seek faster transit times to avoid the extended ocean voyages caused by Red Sea diversions and the ongoing Cape of Good Hope rerouting. E-commerce continues to support year-on-year volume growth across both the Asia-Europe and Asia-North America corridors, keeping belly capacity utilization high and pushing rates upward on key lanes. For shippers weighing air vs. ocean freight for time-sensitive cargo, the current premium on air is substantial but may be justified when ocean delays and surcharges are factored in.
In Other News
Several additional developments are worth noting for their potential impact on near-term freight costs and availability.
DOT Inspection Week: DOT inspection weeks occur a couple of times per year, with each cycle focusing on a different aspect of truck compliance — brake systems, engine condition, lighting, and so on. During these weeks, many truckers choose to stay off the road to avoid the risk of fines or out-of-service orders. Fewer drivers on the road translates directly to tighter capacity and higher rates in the domestic trucking market. Importers with time-sensitive inland moves should be aware of DOT inspection week calendars when planning drayage and final-mile delivery.
Red Sea Conflict Continues: Houthi rebel attacks on commercial shipping in the Red Sea remain an active risk factor for any vessel transiting the Bab-el-Mandeb Strait. A ship traveling through the Red Sea reported being hit in an attack by Yemen’s Houthi rebels, adding to the already substantial diversion of container capacity around the Cape of Good Hope. These diversions add 10-14 days to Asia-Europe voyages and contribute directly to the global capacity crunch that is driving rate increases across all major trade lanes.
Charter Rate Records: As liner operators become increasingly desperate for additional tonnage, charter rates have hit the $150,000 per day mark — a new record that reflects the extraordinary demand for vessel capacity in the current market. These elevated charter costs will inevitably be passed through to shippers via surcharges and elevated base rates in the coming months.
Canada Rail Negotiations: Final submissions to the Canada Industrial Relations Board (CIRB) indicate that neither rail companies nor unions believe “essential services” will be disrupted by a potential strike, which may clear the legal path for industrial action. A Canadian rail strike would significantly disrupt inland distribution across Canada and could push additional freight volumes onto already-strained US rail and trucking networks. Importers routing cargo through Canadian ports or relying on Canadian rail for inland delivery should develop contingency plans now. Learn how to navigate these types of supply chain challenges before they become emergencies.
Air Cargo Demand Rising: Economic growth and evolving global trade structures are introducing new volatility into the air cargo market. Demand for air freight is strengthening across multiple categories, putting upward pressure on capacity and rates. For importers considering a modal shift to manage ocean freight risk, early engagement with your trade advisory services team is essential to secure capacity at competitive rates before the Q4 peak season surge.
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