MARKET UPDATE: NOVEMBER 22ND, 2024
CT MarketWatch: Tariffs, Labor Disruptions, and Early Lunar New Year Fuel Market Uncertainty
The global logistics market continues to experience dynamic shifts, influenced by regional disruptions and seasonal demand patterns. Transpacific trade routes are seeing elevated rates, with shippers accelerating activity ahead of potential East Coast port strikes and tariff changes. In North America, labor unrest has highlighted vulnerabilities, as Canadian port disputes have temporarily subsided but remain a point of concern, while East Coast ports face looming uncertainties. Meanwhile, European trans-Atlantic demand is softening despite strong capacity utilization, and Asia-Europe lanes are grappling with rate hikes fueled by General Rate Increases (GRIs) and Lunar New Year preparations. Across air freight markets, peak season surges are visible, particularly on Middle East-North America routes, reflecting heightened sea-air transport demand and holiday-driven activity.
MARKET WATCH
Ocean Freight
Asia to North America
- Elevated rates compared to April suggest shippers are frontloading ahead of potential tariff increases and the anticipated East Coast port strike.
- With Lunar New Year starting earlier (end of January), rate pressure may begin in late December.
- Market participants have mentioned that the initial slight price increase is attributed to “serious blank sailings” and “USEC rate remain at high side.”
- Conversely, ECNA saw a different initial sentiment, with more blank sailings booked than normal, causing rates to plateau then climb modestly higher early in the week.
- On the WCNA route, sources said that volume is very low, with fewer blank sailings occurring despite the Canadian dockworker lockout this week.
Canada’s Port Labor Disputes Resolved (For Now):
Last week, Canada’s Labor Minister intervened in separate labor disputes on both coasts, resulting in lockouts at major container ports. The Industrial Relations Board ordered operations to resume at Vancouver, Prince Rupert, and Montreal, with binding arbitration mandated.
- ILWU Local 514 in British Columbia plans to file legal challenges, indicating potential further disruptions in the future.
- Ports reopened late last week.
Potential US East Coast Port Strike Looming:
Negotiations between the ILA and USMX broke down again last week. Key sticking points include automation at ports, heightening concerns about a possible strike after the current contract expires on January 15.
Europe to North America
Trans-Atlantic Demand weakening ab it. Utilization levels are strong, with blank sailings in place to manage capacity. Rates have risen 45% since mid-October, driven by reduced capacity (winter passenger schedules) and shifts of freighter capacity to ex-Asia routes.
Indian Subcontinent
Demand is muted. Rates continue to decline.
Asia to Europe
Rates have climbed 30% this month due to general rate increases (GRIs) and preparations for the Lunar New Year rush.
Carriers are entering tendering season with Asia-Europe BCOs and adjusting port call rotations in preparation for February’s alliance reshuffles.
Air Freight
Asia to North America/Europe
Middle East to North America:
- Rates climbed 22% in the past three weeks, likely reflecting a peak season bump ahead of Thanksgiving and increased sea-air transport demand.
China to North America & Europe:
- China-North America rates are at yearly highs, driven by e-commerce volume increases.
- Rates to Europe have seen modest increases, as peak conditions remain elusive due to pre-planned adjustments by shippers.
Transatlantic Air Freight:
- Rates have risen sharply. Reflecting capacity reductions and seasonal demand shifts.
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