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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.

In Other News…

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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