Rate Relief Ahead
Get ready for Rate Relief Ahead! In this blog post, we delve into the latest developments shaping the global freight landscape across sea and air routes. From adjustments in transit slots at the Panama Canal to ongoing challenges in the Suez Canal, we uncover how these changes impact container shipping. Additionally, we analyze rate trends on key trade routes like Asia to North America and Europe to North America, offering insights into what to expect in the coming weeks. As carriers navigate post-Lunar New Year adjustments and blank sailings, we provide recommendations for shippers to navigate these fluctuations and ensure smooth operations. Join us as we explore the dynamics driving rate relief and forecast the road ahead for global trade.
Panama Canal
Panama Canal Authority (ACP) increased the number of transit slots up for auction to 24 a day, from 22. Before restrictions, there were around 34 to 38 daily transits. Containerships are finding it easier to reserve slots, as some other sectors, most obviously dry bulk, continue to vacate the route.
Suez Canal
We expect attacks in the Red Sea by Houthi forces to continue until there is further resolution to the conflict in Gaza.
Asia to North America
February rate visibility has been challenging to understand as carriers continue to drag their feet on providing rate levels following the post Lunar New Year rush. With demand still somewhat muted and enough carrier capacity to sustain the diversion around Cape of Good Hope we anticipate rate levels falling 20-30% in the weeks following Lunar New Year. Rates will however remain elevated as cost to run service loops will increase in terms of fuel and insurance costs. Carriers will do their best to remain opportunistic and use blank sailings to keep rates elevated ahead of contract negotiations starting in a few weeks.
Europe to North America
Carriers continue to blank and cut capacity. Carriers will continue to divert capacity to address the Red Sea situation. We will see these rates continue to rise as carriers move capacity to more profitable lanes.
Asia to North America
Air freight rates continue to increase ahead of Lunar New Year as some ocean freight shipments divert to air freight. We expect rates to normalize following Lunar New Year.
Post Lunary New Year
- Post Lunary New Year – Carriers and supply chains will have adjusted to new service loops and routines. We should see stability and reliability start to improve within 4-6 weeks as new schedules are adopted.
- Expect rate reductions in February post Lunar New Year.
- Expect significant blank sailings in February.
- For time sensitive East Coast cargo we recommend shipping to West Coast and either trans load or connect to rail option if available.
- Winter weather across the US may continue to impact cargo movement.
- Expect delays and book ahead if possible!
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Questions? All you have to do is contact us.
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