In this market update, sea freight rates from Asia to North America’s west coast continue to decline, diverging from the east coast rates which remain high. The potential east coast strike on September 30 could shift more freight west. The Panama Canal has recovered from drought, while Cape of Good Hope transits decreased due to bad weather. Rates from India to North America surge with no new capacity until mid-August. US export ocean rates rise, and Asia-Europe rates soften due to increased capacity and port congestion. Air freight rates are stable, anticipating strong demand in Q4.
Asia to North America
West coast rates continue to decline and are diverging from East Coast rates, which remain near their peak. There is capacity on West Coast routes as extra loaders have entered the market. However, this could change quickly as we approach the possibility of an East Coast strike on 09/30. As soon as next week, we could see more freight being diverted to the West Coast. Many shippers are holding back cargo in hopes that rates will decline further. However, there are bullish predictions that we will have a traditional peak season, and the earlier peak may have been due to tariffs being implemented.
Panama Canal
Healthy rainfall in recent months has restored the Panama Canal to near-full operating depth, after a severe drought last year.
Cape of Good Hope
Transits around the Cape of Good Hope are lower than last week after bad weather battered the southern tip of the African continent for the second time this month. Total transits were down 14.8% in the week commencing July 22, with 597 compared to 701 during the week commencing July 15.
India to North America
Freight rates from the Indian Subcontinent continue to surge and outpace its Asian neighbors. Rates are expected to continue climbing into August, as no new capacity will be deployed until mid-month.
US Exports
Ocean rates for Q3 continue to increase, driven by a surge in global demand. It’s recommended to book 3-4 weeks in advance, especially if the origin is inland.
Asia to Europe
European container markets took a bearish turn in the week ended July 26, as a combination of increased capacity and slightly softening demand led to rate declines and a growing emphasis on container equipment. We’re seeing structurally blank sailings due to Cape of Good Hope (COGH) routings and port congestion in Asia. A few extra loaders were injected into the FEWB in the second half of July to compensate for downsized vessels and the extra transit time due to COGH routings.
Asia to North America/Europe
Global tonnage and rates seem to have stabilized last week. Expectations remain that increased demand for e-commerce shipments – already keeping rates elevated in the off-season – and other goods like electronics (new iPhone coming in September) in Q4 will mean a strong air cargo peak season.
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