Tag Archive for: ocean freight

Introducing CO2 Emissions Tracking

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On behalf of CargoTrans, we’re excited to announce the launch of our new CO2 Emissions Tracking solution, available today for all of our clients. Designed with environmental accountability at its core, our CO2 emissions tracking platform gives importers and exporters full visibility into the carbon footprint of every shipment — regardless of mode. As global regulators, investors, and customers raise the bar on environmental, social, and governance (ESG) reporting, having accurate emissions data is no longer optional. It is a business imperative.

Whether you move cargo by ocean, air, or truck, understanding the carbon impact of your supply chain starts with measurement. Our new tool integrates directly with our supply chain visibility software so that emissions data flows alongside your shipment milestones — giving your logistics and sustainability teams a single source of truth.

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Why CO2 Emissions Tracking Matters for Modern Supply Chains

Global freight is responsible for a significant share of worldwide greenhouse gas emissions. Ocean shipping alone accounts for roughly 2.5% of global CO2 output, according to the International Maritime Organization (IMO), while air freight carries a substantially higher emissions intensity per ton-mile. As supply chains have grown more complex and extended across multiple continents, the cumulative carbon impact has grown with them.

For companies facing regulatory pressure, investor scrutiny, or customer sustainability requirements, reliable emissions data is the foundation of any credible decarbonization strategy. Here is why tracking CO2 at the shipment level is essential:

  • Regulatory compliance: The European Union’s Carbon Border Adjustment Mechanism (CBAM) and SEC climate disclosure rules in the US are driving demand for granular, auditable emissions data.
  • Customer requirements: Large retailers and manufacturers increasingly require suppliers to report Scope 3 emissions, which include logistics and transportation.
  • Operational efficiency: Identifying the highest-emitting lanes and modes reveals opportunities to consolidate shipments, shift modes, or optimize routing.
  • Brand differentiation: Companies that can demonstrate measurable emissions reductions gain a genuine competitive edge with ESG-focused buyers and partners.
  • Risk management: Carbon-intensive supply chains face increasing exposure to carbon taxes, fuel surcharges, and port emissions fees as environmental regulation tightens globally.

Capabilities of Our CO2 Emissions Tracking Software

Our emissions tracking solution was built to integrate seamlessly into your existing logistics workflow. Rather than requiring a separate platform or manual data entry, it draws on real shipment data — actual routes, vessel types, aircraft types, and load factors — to produce accurate, methodology-aligned emission estimates. Below is an overview of what the platform delivers.

Shipment-Level Carbon Measurement

Every shipment processed through CargoTrans is now assigned a calculated CO2 equivalent (CO2e) figure based on the actual mode of transport, origin and destination, carrier, and cargo weight. Our methodology aligns with IATA carbon accounting standards for air freight and the IMO’s CII framework for ocean freight, giving you defensible, internationally recognized figures.

Key measurement capabilities include:

  1. Ocean freight emissions: Calculated per TEU-mile using vessel type, engine class, and voyage route data.
  2. Air freight emissions: Computed per kilogram using aircraft type, belly vs. freighter capacity, and actual flight routing.
  3. Ground transport emissions: Estimated per mile based on truck type and payload, covering drayage and inland delivery legs.
  4. Multimodal shipments: Combined CO2e for full door-to-door moves covering multiple transport modes in sequence.

Analytics Dashboard and Reporting

Raw emissions data is only useful when it can be analyzed, aggregated, and shared. Our emissions analytics dashboard — built into the same Control Tower platform you already use to manage your shipments — provides actionable insights at multiple levels of your organization.

  • Aggregate CO2e by lane, carrier, time period, or business unit
  • Year-over-year and month-over-month emissions trend charts
  • Mode-by-mode breakdown showing where emissions intensity is highest
  • Exportable reports in CSV and PDF formats for ESG disclosures
  • Custom dashboards for sustainability teams, procurement, and executive leadership

Emissions Impact Analysis and Benchmarking

Understanding your carbon footprint is the first step — understanding how to reduce it is where the real value lies. Our emissions impact analysis tools allow you to model alternative scenarios before you book, so your team can make smarter decisions from the outset. For example, you can compare the CO2e cost of air freight versus expedited ocean freight for a given lane, or evaluate the emissions impact of freight consolidation versus multiple partial shipments.

Benchmarking features let you compare your emissions performance against industry averages by trade lane, helping you identify which routes and carriers offer the best combination of cost, transit time, and environmental performance. This directly supports your supply chain risk management framework by surfacing both financial and environmental exposure across your network.

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How CO2 Tracking Integrates With Your Broader Supply Chain Strategy

Emissions tracking does not exist in isolation. The most effective sustainability programs connect carbon data directly to procurement, routing, and carrier selection decisions. CargoTrans has built this integration into the core of our platform so that your sustainability goals are embedded in your daily operational workflows — not siloed in a separate reporting tool that gets updated quarterly.

Connecting Emissions Data to Carrier Selection

Not all carriers and routes carry the same emissions profile. Modern vessels built to IMO Tier III standards emit substantially less CO2 per TEU than older tonnage. Similarly, some airlines operate newer-generation aircraft with significantly better fuel efficiency. Our platform surfaces this data at the point of booking, enabling your team to factor environmental performance into carrier selection decisions alongside cost and transit time.

For shippers who want to track ocean, air, and land freight across a unified dashboard, this capability means your emissions data stays current and complete across all modes without any additional manual work.

Supporting Scope 3 ESG Reporting

Logistics and transportation are typically categorized under Scope 3 Category 4 (upstream transportation and distribution) in the GHG Protocol framework. For many manufacturers and retailers, Scope 3 emissions can account for 70% or more of their total carbon footprint — and freight is often the largest single contributor within that category.

Our CO2 tracking platform generates the auditable, shipment-level records that your sustainability, finance, and legal teams need to complete annual ESG disclosures. Data can be exported in formats aligned with common reporting frameworks, and our trade advisory services team can assist with the interpretation and contextualization of your emissions data within specific regulatory frameworks.

Setting and Tracking Reduction Targets

Once you have a baseline, you can set meaningful reduction targets. Our platform supports goal-setting workflows that allow your team to:

  1. Establish a baseline year and total CO2e for your freight operations
  2. Set annual reduction targets as a percentage of baseline
  3. Monitor progress toward targets in real time as shipment data flows in
  4. Identify specific lanes or modes where reductions are ahead of or behind target
  5. Generate interim progress reports for internal stakeholders and external auditors

Practical Steps to Reduce Your Freight Carbon Footprint

Understanding your emissions baseline is only the beginning. The data our platform provides should translate into concrete operational changes that reduce CO2 output over time. Here are the most impactful levers that importers and exporters can pull:

  • Shift from air to ocean: Air vs. ocean freight comparison shows that ocean shipping produces roughly 30 to 50 times less CO2 per kilogram of cargo than air transport for equivalent lanes. Where lead time allows, mode shifting is the single highest-impact change most companies can make.
  • Consolidate shipments: Partial loads and frequent small shipments dramatically increase emissions intensity per unit. Our freight consolidation guide details how LCL and FCL strategies affect both cost and carbon.
  • Optimize routing: Longer routings via Cape of Good Hope or transoceanic transshipment hubs add both transit time and emissions. Our platform can identify when direct services reduce your CO2 footprint alongside transit time.
  • Select lower-emission carriers: Within any given mode, significant variation exists in emissions intensity between carriers. Prioritizing vessels and aircraft with modern, fuel-efficient engines reduces your Scope 3 footprint without changing your operational model.
  • Address supply chain challenges proactively: Reactive logistics — expedited air shipments, rush transloading, emergency re-routing — carries both a cost and carbon premium. Addressing supply chain challenges upstream reduces both financial and environmental waste.

Getting Started With CO2 Emissions Tracking

Our CO2 Emissions Tracking feature is available to all CargoTrans clients effective immediately. Existing users of our supply chain visibility software will find emissions data automatically populated for new shipments without any additional configuration required. Historical emissions estimates for previous shipments can be generated on request for clients who need to establish a baseline for prior reporting periods.

We believe that every step toward sustainability matters — and that the freight industry has both the tools and the responsibility to make measurable progress. This launch underscores our ongoing commitment to environmental stewardship, and it is the first in a series of sustainability-focused features we will be releasing throughout the year.

To learn more about our CO2 Emissions Tracking capabilities, or to discuss how your organization can incorporate emissions data into your ESG reporting and logistics strategy, contact CargoTrans today. Our team is ready to walk you through the platform and help you establish your first emissions baseline.

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Rates Edge Closer to Pandemic Highs

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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:

  1. Rate premiums above standard Asia-origin pricing for comparable lanes
  2. Extended lead times due to service diversions and equipment repositioning
  3. Reduced carrier flexibility on allocation commitments under existing contracts
  4. 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.

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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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West Coast, Best Coast? For now…

Sea freight rates from Asia to North America’s West Coast continued to decline in late July 2024, diverging sharply from East Coast rates that remained near their peak. A potential East Coast longshoremen’s strike, then scheduled for September 30, threatened to accelerate westward freight diversion. Meanwhile, the Panama Canal recovered from severe drought conditions, while Cape of Good Hope transits fell due to severe weather. Rates from India to North America surged on scarce space, and US export ocean rates continued to climb on global demand.

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Ocean Freight Market Overview

The mid-2024 freight market was defined by the divergence between West Coast and East Coast dynamics — a pattern driven by strike uncertainty and carrier capacity management. Understanding which routes are under pressure helps importers make proactive booking and routing decisions.

Asia to North America

West Coast rates continued to decline as extra loader vessels entered the market, expanding available capacity. East Coast rates, by contrast, remained near their peak due to continued capacity constraints and concerns over labor action. Key dynamics shaping the market at this time:

  • Additional capacity entering West Coast lanes through extra loaders
  • Shippers holding cargo in anticipation of further West Coast rate declines
  • Strike risk on the East Coast (09/30 deadline) creating diversion pressure toward the West
  • Bullish peak season predictions linked to tariff-front-loading activity

India to North America

Freight rates from the Indian Subcontinent continued to surge, outpacing rate movements from other Asian origins. No new capacity was expected to be deployed until mid-August, leaving the market tight with limited relief near-term. Shippers with India origin cargo were advised to book as far forward as schedules allowed.

US Exports

Ocean rates for Q3 US export cargo continued to increase, driven by a surge in global demand. Recommended booking lead time: 3-4 weeks in advance, with particular attention required for inland origin shipments where inland transport coordination adds time to the booking cycle.

Alternative Routing Conditions

With the Red Sea disruption continuing to affect capacity and transit times on major east-west trades, the condition of alternative routing corridors — the Panama Canal and the Cape of Good Hope — remained critical for shipper planning throughout this period.

Panama Canal

Healthy rainfall in recent months restored the Panama Canal to near-full operating depth following the severe drought that had restricted transits the previous year. Improved water levels allowed the Panama Canal Authority to increase draft allowances and daily vessel transits — a meaningful improvement for transpacific trade flows that depend on this route.

Cape of Good Hope

Transits around the Cape of Good Hope declined after severe weather battered the southern tip of Africa for the second consecutive time that month. The week commencing July 22 saw 597 transits versus 701 the previous week — a 14.8% reduction. Vessel bunching and schedule delays followed. Shippers routing cargo via this corridor should monitor ETAs closely during weather events, as delays can propagate across the global schedule for weeks.

Air Freight and Europe Update

Air freight and European container markets provided a counterpoint to the volatility in transpacific ocean lanes. Understanding both modes and all major trade corridors is essential for importers managing multi-modal supply chains.

Asia to Europe

European container markets took a bearish turn in the week ending July 26. Increased capacity and slightly softening demand led to rate declines and a growing emphasis on container equipment availability. Structural blank sailings from Cape of Good Hope routings and port congestion in Asia continued to shape the market. Extra loaders were injected into Far East-West Bound services in the second half of July to compensate for downsized vessels and extended transit times from COGH routings.

Air Freight

Global air freight tonnage and rates stabilized through late July. Q4 expectations remained strong, driven by anticipated e-commerce demand and electronics releases. Some shippers converted sea freight to air to avoid longer ocean transit times — a pattern that sustained air cargo demand even during the traditional off-season. The air market was positioning for what was expected to be a robust traditional peak season.

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What This Means for Your Supply Chain

Markets in mid-2024 rewarded importers who maintained visibility across all active lanes and tracked carrier capacity signals in real time. The strike risk, rate divergence, and routing disruptions highlighted above created execution risks that reactive supply chains struggled to absorb. Proactive teams used real-time data to identify risk ahead of the event — not after the damage was done.

  1. Monitor West Coast vs. East Coast rate divergence and adjust routing accordingly
  2. Book India-origin cargo with maximum lead time during constrained periods
  3. Track Panama Canal and Cape of Good Hope conditions when planning ocean transit ETAs
  4. Evaluate air freight conversion when ocean delays threaten delivery commitments
  5. Use supply chain visibility software to track live vessel positions and ETA changes across all active lanes

CargoTrans’s Control Tower platform aggregates carrier data, route conditions, and shipment milestones in a single dashboard — giving your team the lead time needed to respond before delivery commitments are missed. For current market intelligence and routing guidance, our trade advisory services team monitors all major trade lanes in real time.

Questions? Contact us to speak with a logistics specialist about your specific trade lanes.

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Some Rate Relief as “Christmas in July” Demand Wanes

Asia to North America rates retreated in late July 2024, particularly to the West Coast, as increased capacity and niche carriers entered the market. Severe weather around the Cape of Good Hope caused vessel delays, with some ships temporarily diverting to the Panama Canal. Rates from the Indian Subcontinent surged on scarce space, though new carrier services were expected to provide relief in August. US export rates continued to rise on global demand, and the air freight market showed continued growth driven by e-commerce volume.

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Ocean Freight Market Overview

The rate environment in late July 2024 was characterized by diverging trends across trade lanes — retreat on West Coast transpacific routes, sustained pressure on East Coast lanes, and continued tightness on India-origin freight. Here is how each major trade corridor performed during this period.

Asia to North America

Rates continued to retreat, particularly to West Coast North America, as additional capacity and niche carriers entered the market. Key dynamics shaping the West Coast market:

  • Increased capacity from niche carriers putting downward pressure on West Coast rates
  • Demand showing early signs of waning after the front-loading peak
  • East Coast rates easing more slowly due to continued capacity constraints and labor uncertainty
  • Carriers announcing additional August blank sailings to proactively manage capacity and sustain rate levels

Shippers monitoring potential rate trajectories needed to weigh the risk of blank sailing disruptions against the potential for further rate declines before locking in future bookings.

India to North America

Freight rates from the Indian Subcontinent continued to surge as space remained scarce. New standalone services from Hapag-Lloyd and CMA CGM scheduled to begin in August were expected to provide some relief — though the immediate near-term market remained tight. Shippers with India origin cargo were advised to secure bookings as far in advance as possible.

US Exports

Ocean rates for Q3 US exports continued to increase, driven by a surge in global demand. Recommended booking lead time: 3-4 weeks in advance, particularly for inland origin shipments where drayage and rail connections add complexity to the booking timeline.

Alternative Routing and Weather Disruptions

Vessel diversions from the Red Sea since late 2023 continued adding 14 or more days to Asia-US voyages. The condition of alternative routing corridors — particularly the Cape of Good Hope — had a direct impact on transit time reliability and vessel schedule integrity across the global fleet.

Cape of Good Hope

Severe weather conditions around the Cape of Good Hope forced multiple container lines to seek shelter from strong winds and high waves. One CMA CGM vessel lost 44 containers overboard when rounding the Cape on July 9th. Approximately 600 container ships routing around Africa were reported to be affected by the extreme weather. Conditions at the time:

  1. Wave heights initially reached dangerous levels, then reduced to 23-26 feet and were expected to continue decreasing
  2. Some vessels temporarily diverted to route via the Panama Canal to avoid the worst weather
  3. Estimated arrival times were delayed by 24-48 hours for affected vessels
  4. Vessel bunching at global ports was anticipated as schedules compressed

Vessel diversions from the Red Sea since last November continued to add 14 days or more to voyages between the US and Asia — compounding the Cape weather disruption for carriers on round-trip schedules.

Europe and Air Freight

European container markets and the global air freight network provided context for importers managing multi-modal supply chains. Both the Asia-Europe ocean lane and the air market were subject to distinct pressures during this period.

Asia to Europe

Equipment shortages and port congestion improved slightly through late July 2024. However, several blank sailings were announced for the second half of July and into August. These planned capacity reductions were a deliberate carrier strategy to sustain rate levels by limiting available space — even as underlying demand remained relatively stable.

Air Freight

Global air freight tonnage and rates continued to show 9-10% year-on-year growth. Some importers converted sea freight shipments to air to avoid the longer ocean transit times created by Red Sea diversions and Cape weather disruptions. E-commerce continued to support volume growth on both the Asia-to-Europe and Asia-to-North America air lanes — a structural demand driver that kept rates elevated into the off-season.

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Operational Guidance for Importers

The supply chain conditions in mid-2024 underscored the importance of real-time data and proactive booking management. Importers who maintained visibility across all active lanes could identify which routes offered capacity and which were at risk of delay before the disruption reached their shipments.

  • Book West Coast transpacific cargo with 3-4 weeks lead time even as rates retreated — blank sailing risk remained
  • Secure India-origin bookings immediately as space remained scarce until new services came online
  • Monitor Cape of Good Hope vessel schedules for bunching-related port delays that cascade globally
  • Evaluate air conversion where critical shipments face unacceptable ocean transit delay risk

CargoTrans’s supply chain visibility software tracks live vessel ETAs, carrier schedule reliability, and exception events across all active trade lanes. The Control Tower platform surfaces these signals before delays escalate into delivery failures. For guidance on routing strategy and carrier selection for your specific lanes, our supply chain risk management team is available to review your active programs.

Questions? Contact us to speak with a specialist about your freight program.

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Rates Edge Closer to Pandemic Highs

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 GRIs and stringent weight limits. 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.

Asia to North America

Equipment shortages persist in North America. As of 07/01, a new GRI has been implemented, with the East Coast (EC) rate double that of the West Coast (WC). Carriers prefer running services to the USWC due to shorter transit times and higher spot market revenue. On the USEC, stringent weight limits set by carriers exacerbate issues, with Maersk imposing HWS fees of $400/20’ and $800/40’/HC for containers over 20 metric tons. These limits reflect limited space due to full vessels.

Space is scarce, requiring bookings weeks in advance. Shipping lines offer more services, including expedited options and guarantees for equipment and space. Extra loader (XL) space helps reduce the backlog in Asia, improving conditions for the Pacific Southwest (PSW), but the EC remains overbooked with an average delay of 7 days. As of 07/01, PSS applies to all fixed-rate contracts, and many NAC contract allocations have been reduced or not honored.

India to North America

Freight rates from the Indian Subcontinent to East Coast North America have surged in the past week on space shortage and equipment issues. Due to severe space constraint from India to US West Coast – Hapag Lloyd has introduced a new service to US East Coast Ports & then move the containers by land (Rail Road) to US West Coast.

US Exports

Ocean rates for second half of the year are increasing driven by surge in global demand. It’s recommended to book 3-4 weeks in advance especially if origin is inland.

Panama Canal Update

The Panama Canal Authority (ACP) has announced another increase in draft and daily transits. The maximum authorized draft was raised by another 30 cm yesterday to 14.3 m, and will increase to 14.63 m on July 11. Additionally, a new booking slot for the neopanamax locks will be added beginning on August 5, bringing the total number of transits to 35 ships per day.

Asia to Europe

Container freight rates in Europe soared in the week ended June 28, as shippers maintained strong demand into North Europe amid supply-side challenges. Rates will continue to rise in the first half of July. Despite sources remaining bullish in the near term, there was an expectation that rate hikes will curb eventually, with participants predicting August as a likely time for the slowdown.

Asia to North America/Europe

Tonnage continues to increase as some sea freight is converted to air to avoid longer transit times. Ecommerce continues to support year on year volume growth across both markets Asia to Europe & North America.

DOT week happens a couple times a year and each time there is a different inspection that truckers must go through that are on the road during that week. This can vary from brake checks, engine checks, headlight checks, etc. A lot of truckers won’t be on the road to avoid any potential fines/fees which means the less drivers on the road, the harder it is to find a truck and the higher the rates will be.

Further draft and transit improvements at the Panama Canal The Panama Canal Authority (ACP) has announced another increase in draft and daily transits. Read More

Ship attacked in Red Sea in latest maritime assault carried out by Yemen’s Houthi rebels A ship traveling through the Red Sea on Thursday reported being hit in an attack carried out by Yemen’s Houthi rebels. Read More

Maersk sets new chartering record with deal for $150,000 a day As liner operators become desperate for ships, charter rates have hit the $150,000/day mark. Read More

Rail strike in Canada likely as ‘essential services’ hurdle seems to have tumbled  Final submissions to the Canada Industrial Relations Board (CIRB) reveal neither rail companies nor union believe “essential services” will be disrupted by a strike, which could pave the way for action. Read More

Demand for air freight ‘perking up’, but this puts pressure on capacity Economic growth and changing global trade structures introduce uncertain and volatile factors to the air cargo market. Read More

Freighter aircraft: ‘we are on the cusp of major change in large widebodies’ Even with 21% of the fleet parked, freighters will continue hauling a large share of global airfreight as the growth in bellyhold capacity slows. Read More

Airfreight maintains ‘remarkable’ volumes, as ecommerce soars Existing traffic has held steady as have rates – in fact, air cargo continues to have a surprisingly good summer. Read More

Questions? All you have to do is contact us.

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Here we go again… Rate Increases and Premium Services

In this CargoTrans Market Watch, we cover the global logistics developments from May 2024. The ongoing Red Sea conflict continued to strain capacity and schedule reliability on the Asia to North America route. Strike threats loomed in Canada and on the US East and Gulf Coast as ILA-USMX contract negotiations approached a September deadline. Meanwhile, the Panama Canal recorded improved transits in April as water conditions recovered, and India-origin freight saw softening rates with new service introductions. Air freight remained robust, fueled by e-commerce growth.

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Ocean Freight Market Overview

May 2024 saw tightening conditions on Asia-North America lanes driven by the Red Sea crisis — now in its sixth month — compounded by the first signs of labor uncertainty on major US port gateways. Understanding how these pressures interacted helps importers make more informed booking and routing decisions.

Asia to North America

The Red Sea conflict continued to impact capacity and schedule reliability on the transpacific. Space was tightening at major origin ports in Asia, and equipment shortages at origin were being reported across multiple carriers. Key risk factors shaping the market:

  • Ongoing Red Sea diversions reducing effective vessel capacity on Asia-North America lanes
  • Premium surcharge options available for guaranteed space and more reliable transit times
  • Additional blank sailings announced for June to manage capacity and sustain rate levels
  • GRI announcements expected for June as carrier revenue management responded to demand signals
  • Strike risk in Canada and on the US East and Gulf Coast creating potential for further rate pressure

India to North America

The India-North America lane saw a notable shift in mid-2024. With several new standalone carrier services introduced on this trade lane, available capacity increased and rates continued to soften. Importers with India-origin freight were in a favorable position relative to the prior quarter’s tight market — booking lead times normalized and space availability improved.

US Exports

Strong US consumer spending drove continued import upgrades from US retailers, with monthly import volumes on track to remain consistently above 2 million TEUs well into the traditional peak shipping season. Export demand was supported by global purchasing activity, though the primary market focus remained on import lane management given the Red Sea impact on inbound schedules.

Canal and Alternative Routing Updates

With Red Sea disruptions now well into their sixth month, the condition of the Panama Canal and Cape of Good Hope routing corridors remained critical variables in global schedule management. The improvement of one routing option had direct implications for the carrier community’s capacity deployment decisions.

Panama Canal

Oceangoing transits in April 2024 totaled 789 vessels — 42 higher than March, reflecting the continued recovery from the severe drought that had restricted operations the prior year. However, April 2024 transits were still 289 below April 2023 levels, confirming that full normalization remained in progress. The improving water conditions were welcome news for shippers who depend on the Canal route for transpacific and US Gulf Coast services.

  1. April 2024: 789 oceangoing transits (vs. 747 in March, vs. 1,078 in April 2023)
  2. Draft restrictions progressively eased as the Gatun Lake water level recovered
  3. Full normalization of daily transits was expected to take additional months

Europe and Asia-Pacific Freight Conditions

The Asia-Europe trade and the broader Asia-Pacific market presented a distinct set of dynamics in May 2024, shaped by both structural carrier capacity management and macro demand signals from European importers.

Asia to Europe

Container space availability on Far East to North Europe services was constricted for weeks ahead due to the combined effect of Red Sea diversions reducing effective capacity and restocking demand from European importers. Multiple carriers released premium rate tiers to manage remaining allocation — a pattern that signaled continued rate pressure on the lane through Q2. Blank sailings continued as carriers structured their schedules around the longer COGH routing.

Air Freight

Air freight remained robust through this period, with e-commerce demand the primary structural driver supporting year-on-year volume growth on both the Asia-Europe and Asia-North America lanes. Some shippers converted ocean freight to air to avoid the extended transit times caused by Red Sea and Cape routing. The expected Q4 peak season was adding to shipper interest in locking forward air capacity.

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Trade Policy Context: De Minimis and Port Labor

Two significant regulatory developments shaped the trade compliance landscape during this period — developments that had direct implications for importers managing customs workflows and port scheduling.

The US Customs and Border Protection agency postponed a mandate for advance submission of shipment data on de minimis imports — providing a temporary reprieve for merchants and customs brokers handling low-value e-commerce inbound shipments. This postponement signaled that the regulatory framework around de minimis thresholds was continuing to evolve.

On the labor front, the ILA-USMX contract negotiations — covering port workers across the US East and Gulf Coast — were progressing toward a September 30 deadline. Both sides stated that local port negotiations were near completion, with coastwide talks expected to follow. The outcome of these negotiations had direct implications for East Coast port reliability through Q3 and Q4 2024.

Managing Market Volatility with Real-Time Data

The May 2024 freight environment — Red Sea disruptions, labor risk, canal recovery, and rate volatility across trade lanes — illustrated the value of centralized, real-time supply chain data. Importers who could monitor carrier capacity signals, track vessel ETAs, and evaluate alternative routing options in one platform were better positioned to protect delivery commitments.

CargoTrans’s supply chain visibility software provides live shipment tracking across ocean, air, and land from a single interface. The Control Tower platform surfaces exception alerts and carrier performance data so your logistics team can act on risks before they become delivery failures. For tariff impact analysis and sourcing guidance in a changing trade environment, our trade advisory services team is available to help.

Questions? Contact us to speak with a specialist about your current freight program.

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May Blank Sailings and Early Peak Season Drives Rate Increases

Welcome to our latest Market Watch update, where we dive into the dynamic world of sea and air freight. As we entered May 2024, the landscape shifted quickly with the implementation of blank sailings and early signs of peak season activity. From potential rate increases driven by surging demand to updates on Panama Canal transit, we cover the key developments shaping the industry. Join us as we explore the impact of blank sailings, potential strike actions, and port operations on both coasts — and what it all means for your supply chain strategy.

Managing these volatility cycles requires the right tools and visibility. Our supply chain visibility software and Control Tower platform help importers and exporters stay ahead of shifting market conditions in real time.

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Ocean Freight: Asia to North America

The Asia-to-North America trade lane experienced significant pressure in May, driven by a convergence of holiday-related blank sailings, early peak season demand, and ongoing capacity constraints from Red Sea rerouting.

Blank Sailings and Rate Pressure

May Day celebrations across Asia and most of the world prompted carriers to implement blank sailings, tightening already constrained capacity. New contracts taking effect May 1st, combined with what many were calling a restocking cycle for retailers — an early peak — created demand and potential overbookings for the first half of May. There was potential for another General Rate Increase (GRI) of $1,000 as of May 14th.

Rerouting around the Cape of Good Hope continued to absorb most of the new build capacity entering the market, with overall market capacity down approximately 4% year-over-year.

  • 26 blank sailings were scheduled for May, reducing available space on key trade lanes.
  • A Peak Season Surcharge (PSS) was anticipated to apply to new fixed-rate contracts, narrowing the wide gap between spot and fixed-rate markets.
  • Carriers were expected to prioritize higher-paying cargo, putting contract shippers at risk of being rolled in favor of spot market freight.
  • A potential strike on the Canadian West Coast was causing significant rerouting and elevated demand for U.S. West Coast sailings.

These dynamics are a strong reminder of why proactive supply chain risk management is essential — not optional — for importers relying on Asia-origin shipments.

Contract Market Outlook

Beneficial cargo owners (BCOs) and freight forwarders negotiating 2024-2025 annual contracts faced a complex environment. The wide spread between spot and fixed rates made contract negotiations particularly challenging, with carriers attempting to lock in higher base rates before peak season further inflated spot pricing. Shippers who delayed contract decisions risked exposure to sharply higher spot rates by Q3.

Panama Canal: Expanding Capacity

After months of severe drought-related restrictions, the Panama Canal Authority (ACP) announced meaningful progress toward restoring normal operations.

Transit Allowances Increasing

Starting in the second half of May, the ACP announced it would allow 31 ships to transit the canal daily, up from 24 ships during the first half of May. The number was set to increase further to 32 ships per day by the start of June. While the canal remained restricted to ships with a 44-foot draft, the increase in daily slots meant more large vessels could transit — a meaningful relief for trans-Pacific trade lanes that had been increasingly reliant on Cape of Good Hope rerouting.

For shippers evaluating route options, our trade advisory services team monitors canal restrictions and rerouting cost implications continuously.

U.S. Port Updates

Domestic port conditions in May varied significantly by location, creating both opportunity and congestion challenges for cargo owners.

Port of Baltimore

Following the Francis Scott Key Bridge collapse in late March, the Port of Baltimore was working toward resuming normal operations by the end of May. The phased restoration of temporary channels was progressing ahead of schedule, and the first container ship had already arrived at the port — described as “another milestone” in the recovery effort. Full capacity restoration remained the goal heading into summer.

LA/Long Beach Ports

Rail container dwell times at the Los Angeles-Long Beach terminals increased steadily through the first quarter of 2024:

  1. January: 4.2 days average dwell time
  2. February: 6.26 days average dwell time
  3. March: 7.02 days average dwell time

According to the Pacific Merchant Shipping Association (PMSA), the steady rise reflected the import surge from Asia putting pressure on intermodal rail infrastructure. Shippers with time-sensitive cargo were advised to explore chassis availability and pre-plan inland moves well in advance.

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Asia to Europe: Tight Market Conditions

Vessel utilization into Europe remained high heading into May. Markets anticipated further bullishness as inventory restocking began, container equipment shortages persisted, and diversions around Southern Africa continued. Adverse weather conditions added further complexity to an already strained trade lane.

Carriers were rolling NAC (Named Account Contract) containers in favor of higher spot market freight — no surprise given the carrier focus on maximizing revenue per TEU. A second GRI attempt was anticipated for May 14th on Asia-Europe routes as well.

Air Freight: E-Commerce Keeps Volume Elevated

The air cargo market in May reflected a continuation of trends that had defined 2024: strong volume growth, elevated rates, and structural demand driven by e-commerce.

E-Commerce as the Structural Driver

E-commerce continued to support year-on-year volume growth across both the Asia-to-Europe and Asia-to-North America markets. Chinese platforms driving demand for fast, direct-to-consumer delivery created sustained pressure on available belly and freighter capacity from key Asian origin points.

For cargo that cannot wait on slower ocean lanes, the comparison between air vs. ocean freight becomes more nuanced during periods of ocean disruption — when elevated air rates may be offset by the cost of delays, lost sales, or inventory shortfalls.

Key Air Freight Developments in the Period

  • China export surge: A weak Chinese yuan and domestic deflation accelerated export volume from Chinese manufacturers, amplifying demand across both ocean and air freight.
  • Alternative fuel shipping: Methanol-powered tanker orders rose sharply, with alternative fuel newbuilding contracts up 48% in the first four months of 2024 per data from DNV.
  • Electric container shipping: China’s COSCO launched the world’s largest fully electric container ship, the Greenwater 01, operating between Shanghai and Nanjing — a signal of long-term decarbonization ambitions in the shipping industry.
  • Red Sea security: Houthi attacks continued against commercial vessels in the Indian Ocean and Red Sea, with the MSC Orion among targeted ships. The ongoing disruption maintained pressure on sea freight capacity and costs, keeping cargo diverting to air freight alternatives.

Strategic Takeaways for Shippers

The May market environment underscored several enduring principles for importers and exporters managing global supply chains:

  1. Secure capacity early: Blank sailing seasons reward shippers who book ahead and maintain strong carrier relationships.
  2. Evaluate fixed vs. spot strategically: With a wide spread between contract and spot rates, the right answer depends on volume predictability and risk tolerance.
  3. Diversify port options: The LA/LB congestion and Baltimore recovery highlight the value of having contingency port and routing plans.
  4. Monitor canal conditions: Panama Canal slot availability directly affects transit times and routing economics on key trades.
  5. Use a freight consolidation strategy: For smaller shippers, a solid freight consolidation guide can help optimize costs during high-rate periods.

Questions? All you have to do is contact us.

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April Showers Brings Brighter Days for Panama Canal Transit

Welcome to our latest Market Watch update, where we bring you the latest insights and developments in the sea and air freight industries. As we transitioned into April 2024, promising signs emerged for Panama Canal transit, with increased daily allowances set to alleviate congestion and improve transit times. We also cover the stabilization of spot rates on the Asia-to-North America route, the impact of dense fog in key Asian ports, and the complexities of securing fixed-rate contracts for 2024-2025. Don’t miss the opportunity to optimize your logistics strategy — reach out to us today for more information.

In a volatile rate environment, having a partner with a robust Control Tower platform and end-to-end supply chain visibility software makes all the difference between reacting to disruption and staying ahead of it.

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Ocean Freight: Asia to North America

After a turbulent start to 2024, the Asia-to-North America trade lane showed signs of stabilization heading into April — though the environment remained far from calm, with new pressures already building on the horizon.

Spot Rate Stabilization — With Caveats

Spot rates stabilized to approximately half of their late-January highs, offering some relief to importers who had faced a sharp spike in costs during the first quarter. However, a May 1 General Rate Increase (GRI) was already on the table, signaling that carriers were not prepared to let rates settle at current levels heading into peak season.

The pattern reflected a recurring dynamic in the ocean freight market: a brief period of rate moderation followed by aggressive carrier attempts to recapture revenue through surcharges and GRIs. Shippers who used the April window to lock in fixed-rate contracts for the 2024-2025 period were in a better position than those waiting for further declines that ultimately did not materialize.

Asian Port Disruptions: Dense Fog

Dense fog at key origin ports — including Shanghai, Ningbo, and Busan — contributed to closures, congestion, and departure delays during the April period. These weather-related disruptions compounded existing schedule reliability issues, pushing vessel arrivals further off published schedules and creating ripple effects through supply chain challenges for importers with time-sensitive cargo.

For shipments caught in port delays, leveraging a supply chain risk management framework helps teams identify alternative departure windows and manage downstream inventory impacts before they become critical.

Panama Canal: Brighter Days Ahead

One of the most consequential developments in April was the Panama Canal Authority’s announcement of a phased return toward normal operations — a development that had wide-ranging implications for trans-Pacific and Atlantic trade routes.

Expanded Daily Transit Allowances

The Panama Canal Authority (ACP) announced that starting in the second half of May, it would allow 31 ships to transit the canal daily, up from 24 ships per day during the first half of May. By the start of June, the number was expected to rise to 32 ships per day. The canal remained restricted to ships with a 44-foot draft, but the expanded slot availability meant more large vessels could resume canal transits rather than taking the costly Cape of Good Hope detour.

The return to higher capacity was contingent on improved rainfall in the Gatun Lake watershed. Forecasts at the time were cautiously optimistic, and the canal’s recovery proved to be an important factor in capacity normalization across several key trade lanes heading into summer.

Fixed-Rate Contract Terms for 2024-2025

For shippers evaluating annual contract commitments with ocean carriers for the 2024-2025 contract year, the following terms were widely applicable to new NAC (Named Account Contract) agreements:

  • MQC (Minimum Quantity Commitment): At least 300 TEU for each NAC
  • Weekly MQC: At least 4 TEU per week on a single port pair
  • Validity: Rates valid from May 1, 2024 through April 30, 2025
  • Bunker surcharges: Inclusive of Q2 bunker costs, backed out at time of filing and floating quarterly per tariff
  • Included surcharges: GRI, DTHC, ACC, Panama Canal surcharge, and Suez Canal surcharge
  • Subject to: ISPS, TSC, Carbon Tax if applicable
  • PSS: Subject to Peak Season Surcharge under mutual agreement
  • Cargo eligibility: General cargo of legal weight only
  • Final approval: Rates subject to carrier’s final approval and contract filing

If you need help evaluating whether a fixed-rate contract or spot market approach is right for your cargo volume profile, our trade advisory services team can model both scenarios. You can also use our tariff calculator to estimate landed costs under different routing assumptions.

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Air Freight: Elevated Rates Persist

The air freight market in April continued to reflect the structural pressures that had kept rates elevated throughout the first quarter of 2024 — well above pre-COVID baselines on most international lanes.

Asia to North America Air Cargo

Air freight rates on Asia-to-North America lanes remained significantly above pre-COVID levels, driven by a combination of factors:

  1. Continued diversion of ocean cargo to air due to Red Sea disruptions adding transit time and cost to sea routes.
  2. Sustained e-commerce demand, particularly from Chinese platforms shipping directly to U.S. consumers.
  3. Tight freighter capacity as belly capacity on passenger routes was insufficient to absorb the volume surge.

For shippers evaluating mode decisions, the calculus between air vs. ocean freight grew more complex in this environment — higher air rates versus longer and less predictable ocean transit times meant total landed cost comparisons required careful, shipment-by-shipment analysis.

Jet Fuel and Middle East Risk Premium

Ongoing conflict in the Middle East posed a direct threat to jet fuel prices, with market participants expecting upward pressure on fuel costs as summer travel season approached. Increased passenger travel in summer typically draws available aviation fuel toward passenger routes, adding further cost pressure to cargo operations.

The disruption to sea freight — particularly in the Red Sea corridor — was simultaneously driving cargo to airlines as shippers sought reliable alternatives. This dual demand pressure (diverted ocean cargo plus structural e-commerce growth) kept air rates elevated even as some analysts had expected seasonal softening.

Geopolitical and Security Developments

April 2024 was marked by significant geopolitical events that had direct implications for global freight markets and route security.

Iran-Israel Escalation

Iran launched a large-scale drone and missile attack against Israel in April, deploying more than 300 drones, cruise missiles, and ballistic missiles in a direct military confrontation. The escalation raised the risk of wider regional conflict, adding to the geopolitical risk premium already embedded in Middle East routing decisions for both sea and air freight. Shippers with cargo moving through or near the Persian Gulf corridor were advised to consult with their forwarders on contingency routing.

MSC Aries Seizure

The MSC Aries container vessel was seized and bound for Iran during this period, a development that rattled container shipping markets. Analysis from Linerlytica noted that less than 2% of containerships active in the Persian Gulf were Israeli-owned, and redeploying those vessels was unlikely to significantly disrupt trade flows on its own — but the signaling effect on insurance premiums and route risk assessments was substantial.

Baltimore Key Bridge Recovery

Recovery at the Port of Baltimore continued following the March 26 Francis Scott Key Bridge collapse. A third temporary channel opened at the collapse site during April, with the Fort Carroll Temporary Alternate Channel providing a controlling depth of 20 feet, 300-foot horizontal clearance, and 135-foot vertical clearance. The progressive reopening of channels allowed increasing volumes to resume at the port ahead of full recovery.

Strategic Outlook: Planning Ahead

The April market environment reinforced several key planning principles for global shippers:

  1. Evaluate fixed contracts now: Rate stabilization windows don’t last long. Locking in annual contracts during softer spot markets provides budget predictability for the year ahead.
  2. Build in route flexibility: The combination of Panama Canal restrictions, Red Sea security threats, and port congestion makes multi-routing contingency planning essential.
  3. Understand your tariff exposure: Geopolitical escalation often precedes trade policy changes. Knowing your Section 232 tariffs and broader tariff exposure positions you to respond quickly.
  4. Monitor de minimis changes: E-commerce shipping dynamics are shifting with proposed changes to the de minimis rule — understanding how these affect your import strategy is increasingly important.
  5. Consolidate where possible: During periods of capacity tightness, a sound freight consolidation guide approach can help smaller volume shippers maintain access to vessel space.

Questions? All you have to do is contact us.

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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 the 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.

In a market driven by rapid rate swings and geopolitical volatility, having a Control Tower platform with real-time data is no longer a luxury — it is the foundation of a resilient supply chain strategy.

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Ocean Freight: Asia to North America

The first quarter of 2024 set the stage for a complex contract season, with market conditions heavily influenced by the ongoing Red Sea crisis, Panama Canal restrictions, and evolving carrier capacity strategies.

Capacity vs. Demand: A Shifting Balance

Supply and demand economics prevailed through the early months of 2024, as capacity continued to outpace demand while simultaneously accounting for the longer distances and transit times required by Red Sea and Panama Canal detours. The U.S. East Coast showed significantly more available capacity than the West Coast, with some WC voyages reaching full utilization.

Carrier capacity was expected to increase in May to its highest point in 17 months, driven largely by the tonnage impact of vessels rerouting around the Cape of Good Hope — a counterintuitive result where longer voyages effectively removed ships from the available capacity pool, even as new builds entered the market.

These dynamics are a textbook example of the supply chain challenges that global logistics professionals navigate — where headline capacity numbers tell only part of the story, and effective routing and booking strategies determine which shippers get their cargo moved on schedule.

Red Sea Crisis and Routing Implications

The Red Sea disruption continued to be the dominant structural force reshaping global ocean freight in early 2024. Vessels avoiding the Suez Canal and rerouting via the Cape of Good Hope added approximately 10-14 days to transit times on Asia-to-Europe and some Asia-to-U.S. East Coast routes. The capacity absorption effect of these longer voyages was one of the key reasons spot rates remained elevated even as new vessel capacity technically continued to enter the market.

For importers evaluating their supply chain risk management strategies, the Red Sea situation reinforced the value of maintaining multiple carrier relationships and flexible port options rather than relying on a single routing plan.

Contract Season 2024-2025: BCOs Sign at Higher Rates

One of the defining stories of the Q1-Q2 2024 period was the behavior of Beneficial Cargo Owners (BCOs) in the annual contract market — and the terms that defined the 2024-2025 fixed-rate agreements.

BCO Signing Activity and Rate Levels

BCOs began signing carrier contracts at rates 12-17% above the prior year, reflecting the sustained elevation of ocean freight costs relative to the historically low rates of 2023. For many importers, the decision to lock in annual contracts offered budget predictability in exchange for potentially missing out on further spot market softening — a trade-off that made more sense as geopolitical risks kept downside limited.

Use our tariff calculator to model the landed cost impact of rate changes across different trade lanes and product categories.

2024-2025 Fixed-Rate Contract Terms

The following terms were widely applicable to new Named Account Contract (NAC) agreements signed during this period:

  • MQC requirement: At least 300 TEU for each NAC
  • Weekly MQC: At least 4 TEU per week on a single port pair
  • Validity: May 1, 2024 through April 30, 2025
  • Bunker surcharges: Inclusive of Q2 costs, backed out at time of filing, floating quarterly per tariff
  • Included surcharges: GRI, DTHC, ACC, Panama Canal surcharge, and Suez Canal surcharge
  • Conditional surcharges: ISPS, TSC, Carbon Tax if applicable
  • PSS: Subject to mutual agreement
  • Cargo: General cargo of legal weight only
  • Approval: Subject to carrier’s final approval and contract filing

Our trade advisory services team works directly with importers to evaluate contract terms against their volume profiles, commodity mix, and risk tolerance before signing.

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Air Freight: Volume Growth and Elevated Rates

Air cargo markets in early 2024 were characterized by strong year-on-year demand growth and rates that remained well above historical norms — a combination driven by structural e-commerce demand and ocean freight disruptions pushing cargo toward air alternatives.

Strong Volume Growth Continues

Year-on-year global tonnage data showed air cargo volumes up by +8%, with February marking the third consecutive month of double-digit year-on-year demand growth according to data from the International Air Transport Association (IATA). The sustained momentum was driven by:

  1. E-commerce demand: Chinese platforms continuing to ship high volumes of direct-to-consumer goods via air to meet delivery time commitments.
  2. Ocean freight diversion: Shippers unable to secure reliable ocean capacity — or unwilling to absorb the added transit time of Cape of Good Hope rerouting — shifted cargo to air lanes.
  3. Post-pandemic restocking: Retailers accelerating inventory replenishment ahead of peak season added incremental volume across both ocean and air channels.

For shippers evaluating when air makes sense versus ocean, the comparison is never purely about rate — transit time, inventory carrying cost, and product perishability all factor in. Our guide to air vs. ocean freight breaks down the key decision criteria.

Key Industry Developments in the Period

Several significant events shaped freight markets in this period:

  • Trans-Pacific blank sailings reduced: Carriers began blanking fewer trans-Pacific sailings than in the prior two years, as longer Red Sea rerouting voyages continued to absorb capacity that would otherwise be surplus. Capacity on Asia-U.S. trades was set to reach its highest level in 17 months in May.
  • Chinese import restrictions expanding: U.S. Customs and Border Protection was expected to add more Chinese companies to the forced labor import ban list, with compliance implications for importers of affected goods. Understanding Section 301 tariffs and related trade restrictions is essential for affected supply chains.
  • Air cargo volumes surge: IATA’s February data confirmed an 11.9% jump in air cargo volumes year-on-year, reinforcing the structural demand story across the air freight market.
  • USPS air cargo contract awarded: UPS won the dominant air cargo contract for the U.S. Postal Service, replacing FedEx for the first time in more than 20 years — a significant shift in domestic air logistics infrastructure that would influence capacity allocation across the broader market.
  • De minimis crackdown: The U.S. government announced plans to crack down on e-commerce import methods favored by Chinese platforms like Temu and Shein, which had previously allowed low-value shipments to flow into the U.S. with minimal duties and scrutiny. Understanding changes to the de minimis rule is increasingly important for e-commerce shippers and 3PLs managing direct-to-consumer volumes.
  • Baltimore rerouting data: Early data from the Francis Scott Key Bridge collapse showed trucks and ships actively rerouting through alternative ports and corridors, with supply chain data providers beginning to map the real-world impact on freight flows and transit times.

Strategic Takeaways for Shippers

The early 2024 market environment contained important lessons for importers, exporters, and logistics managers navigating a structurally more complex supply chain landscape:

  1. Carrier relationships matter: In a market where carriers prioritize higher-paying cargo and BCOs are locking in annual rates, having strong relationships with your forwarder and carrier contacts is a competitive advantage.
  2. Fixed vs. spot requires scenario modeling: The 12-17% premium BCOs paid over prior-year rates sounds high — but against a spot market that could spike significantly higher during peak, fixed rates offered real risk protection.
  3. Understand your trade compliance exposure: The expanding forced labor import ban list and de minimis changes add compliance complexity that goes well beyond freight booking. Consult trade advisory services before issues reach your port of entry.
  4. Use real-time visibility tools: In a market with this much disruption — from Red Sea security threats to port congestion to canal restrictions — the ability to track ocean, air, and land freight in a single dashboard is a genuine operational advantage.
  5. Plan for consolidation opportunities: For shippers without BCO-level volumes, a smart freight consolidation guide strategy can help access better rates and carrier prioritization during tight capacity periods.

Questions? All you have to do is contact us.

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Rates Continue to Slide

Welcome to our latest Market Watch update, where we dive into the ever-evolving landscape of sea and air freight. From shifts in market dynamics on the Asia to North America route to ongoing challenges at West Coast ports, we analyze the key trends impacting the industry. We also explore the implications of recent alliance renewals and offer insights into what to expect in the coming weeks. Join us as we navigate the complexities of global trade and share recommendations for optimizing your cargo movements.

For shippers managing multi-modal freight, real-time data is not a luxury — it is a competitive necessity. The ability to track ocean, air, and land freight in one unified dashboard gives operations teams the situational awareness needed to make fast, informed decisions when market conditions shift.

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Alliance Developments

The carrier alliance landscape saw a significant confirmation this period, with long-term implications for service reliability and routing options across major trade lanes.

Ocean Alliance Renewal Through 2032

The Ocean Alliance — comprising CMA CGM Group, COSCO Shipping, Evergreen, and OOCL — confirmed the renewal of their partnership through 2032. The alliance is positioning itself as the stable and reliable option for shippers seeking predictable service on key East-West trade lanes. Following the renewal, effective April 2024, shippers should be aware of upcoming service adjustments across several routes as the partners optimize their combined network.

Understanding how alliance restructuring affects your available services and transit times is part of effective supply chain risk management. When alliances reconfigure, equipment availability, port calls, and transit times can all shift — sometimes with limited advance notice.

West Coast Port Conditions

West Coast port performance continues to create planning challenges for importers routing cargo through the Los Angeles and Long Beach gateway.

LA/LB Port Delays and Rail Backlogs

Consistent 2–3 day delays persist at the Ports of Los Angeles and Long Beach. Rail connectivity from the Southern California gateway is also under pressure:

  • Loading rail to the U.S. East Coast: 4–5 day delays
  • Loading rail to the Midwest: 6–7 day delays
  • Terminal operators at both ports are actively working to reduce rail container backlogs that have accumulated during two consecutive months of strong import volumes
  • Both BNSF and UP are being urged to increase railcar supply to the ports to help clear the backlog

New vessel deliveries coming onto the market may help schedules begin to stabilize over the near term as capacity supply catches up with demand. In the meantime, shippers routing cargo through Southern California should build buffer time into their inland delivery planning.

Asia to North America Ocean Freight

The trans-Pacific trade lane remains dynamic, with rate softening underway even as carriers attempt to defend their revenue through General Rate Increases.

Floating Market and GRI Activity

The floating market continues to soften on the Asia–North America route. Carriers are implementing General Rate Increases (GRIs), though market observers question whether these GRIs are warranted given the direction of underlying demand. Whether Red Sea surcharges will be upheld in the current environment remains uncertain as market conditions evolve.

Southeast Asian and Indian subcontinent origin markets continue to gain traction as an increasing number of buyers look to diversify their sourcing away from China. This geographic shift in sourcing — driven in part by Section 301 tariffs and broader trade policy considerations — is reshaping freight flows across the Pacific.

Recommendations for Time-Sensitive Cargo

Given current West Coast port delays and rail backlogs, shippers with time-sensitive shipments should consider the following strategies:

  1. East Coast routing via West Coast transload: Ship to the West Coast and use transload services or rail connections to reach East Coast destinations — this can be faster than waiting for East Coast vessel services under current market conditions
  2. Premium carrier services: Utilize premium services offered by carriers to guarantee space and equipment, reducing the risk of rollovers and unexpected delays
  3. Freight consolidation: Review our freight consolidation guide to determine whether consolidating shipments can improve cost efficiency and reduce your exposure to per-unit delays

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Asia to North America Air Freight

The air freight market is performing strongly, driven by a combination of robust e-commerce volumes out of China and the spillover demand from ocean shippers rerouting around the Red Sea conflict zone.

E-Commerce Demand and Rate Dynamics

Air freight rates are maintaining elevated levels as e-commerce shipments from China remain robust. The sustained demand from cross-border e-commerce — combined with extended ocean transit times due to Red Sea diversions — has created a supportive environment for air cargo yields. Whether this growth is sustainable or partially a product of favorable year-over-year comparisons remains an open question as the market develops.

Cargo backlogs are building at major international airports in India, including Delhi and Mumbai, as export volumes spike. Airlines operating through these hubs are working through considerable backlogs, which may affect transit times for South Asian origin freight.

Red Sea and Geopolitical Freight Considerations

The Red Sea situation continues to influence global ocean freight routing and capacity. CMA CGM has resumed transit of some vessels through the Red Sea on a case-by-case basis, despite continued Houthi activity in the region. This selective resumption reflects the carrier’s attempt to balance operational risk against the significant cost and time premium of routing around the Cape of Good Hope.

Reports of a potential Houthi truce with Chinese and Russian shipping interests have not materialized into meaningful operational reality — a Chinese tanker was attacked by missiles fired from Yemen in the same period these reports circulated. Shippers should treat any narrative of normalized Red Sea transit with appropriate caution and continue to plan for extended ocean transit times on Europe-Asia and Red Sea-dependent trade lanes.

Understanding the air vs. ocean freight trade-off on lanes affected by Red Sea rerouting is particularly important for shippers with time-sensitive cargo. The cost differential between the two modes has narrowed on some lanes as ocean transit times have extended significantly.

Baltimore Bridge Collapse: Supply Chain Impact

The collapse of the Francis Scott Key Bridge in Baltimore is adding a regional supply chain disruption on top of the broader market volatility covered in this update. Rescue efforts have transitioned to recovery operations in the Patapsco River, with significant implications for Port of Baltimore cargo operations. Carriers are rerouting Baltimore-bound containers through New York/New Jersey and Norfolk. Shippers with freight routed through Baltimore should confirm the status of their containers and review any force majeure notices from their ocean carriers.

Port of Los Angeles: February Volume Surge

The Port of Los Angeles processed 781,434 Twenty-Foot Equivalent Units (TEUs) in February 2024, a 60% increase over the same period in the prior year. This marked the seventh consecutive month of year-over-year growth at the nation’s busiest container port. According to Port of Los Angeles official data, this sustained volume growth reflects the continued strength of U.S. import demand in early 2024 and validates the rail congestion pressures described above.

What This Means for Your Freight Strategy

The current market environment combines softening trans-Pacific rates with persistent West Coast port and rail delays, elevated air freight rates driven by e-commerce demand, Red Sea routing uncertainty, and a new regional disruption at Baltimore. This is precisely the kind of multi-variable environment where supply chain visibility software and proactive logistics partnership deliver measurable value.

Shippers who rely on reactive information — waiting for a delay notification before investigating alternatives — are consistently disadvantaged in volatile markets. The ability to monitor all active freight across all modes and carriers, and to respond to market intelligence before it becomes a supply chain crisis, is the core value proposition of the Control Tower platform.

For personalized guidance on optimizing your freight strategy in the current environment, contact us. Our team is ready to help you navigate complexity and keep your supply chain moving.

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