Rates Remain Elevated Ahead of Contract Season

Welcome to our latest Market Watch update, where we keep you informed about the latest developments in the sea and air freight industries. From ongoing delays at the Panama Canal to geopolitical risks in the Suez Canal, we delve into the challenges facing carriers. Additionally, we explore space constraints on the Asia to North America route and the stability of air freight rates. Stay tuned as we provide insights into what to expect in the coming weeks and offer recommendations for navigating potential disruptions in cargo movement.

Panama Canal

We continue to see delays for ships crossing the canal. The authority stated they will maintain 24 authorized transits per day until April. If rains arrive in May as expected, the canal plans to progressively increase daily slots, aiming to return to about 36 vessels per day, its normal number during the rainy season.

Suez Canal

With uncertainty around a potential for ceasefire in Gaza we see Houthi attacks as a continued risk to carriers.

Asia to North America

We are hearing that following post Lunar New Year blank sailing strategy coupled with canal issues may cause space issues in first half of March as factories restart. GRI will be pushed to second half of March. Expect more blank sailings for March if demand doesn’t improve.

Asia to North America

Air freight rates continue to maintain rate levels as e-commerce shipments from China are quite robust.

Expect delays into March however as new vessel deliveries come onto market we may see schedules start to stabilize.

For time sensitive cargo:

• East Coast: We recommend shipping to West Coast and either transload or connect to rail option if available.
• Use Premium Services offered by carriers to guarantee space and equipment and reduce delays.

MILLION

Projected container imports into major U.S. ports in February, in 20-foot equivalent units, up 2.8% from January’s estimated imports and 20.4% ahead of February 2023.
Source: Global Port Tracker.

Crew abandons ship after Red Sea missile attack, despite US fight-back
The crew abandoned ship after a missile attack on general cargo vessel Rubymar last night, some 35 miles from the Yemen coast, despite US naval strikes over the weekend which were claimed to have reduced Houthi capabilities.
– Read More

India renews open sky policy for foreign air cargo carriers
In a significant move, India has liberalised its aviation policy to permit foreign cargo airlines to operate out of all its international airports – a mandate lasting three years.
– Read More

West Coast leads latest surge in US container imports
The start of 2024 is bringing with it significant growth in volumes at top U.S. ports. January witnessed a 9.2% year-over-year increase in inbound containers. This rise represents the latest reading in four consecutive months of growth, a beacon of positive momentum after a challenging period dominated by the post-pandemic downturn.
– Read More

Praying for rain as record lows loom for Panama Canal and Amazon
Water levels in the Gatun Lake – the man-made reservoir which dictates the navigability of the Panama Canal – are again sinking below the 80ft (24.3 metre) threshold and looking set to pass the record low levels seen last year.
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The Inland Empire’s once-unstoppable warehousing industry falls into a slump
For years the growth of warehousing in the Inland Empire was relentless. At the confluence of port-bound freeways and rail spurs along the eastern edge of Los Angeles’ sprawl, box-like fulfillment centers popped up in business parks by the millions of square feet. They were an economic engine, a bringer of jobs, a shortener of commutes, and a workhorse during the pandemic.
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Rise of fast-fashion Shein, Temu roils global air cargo industry
NEW YORK/SHANGHAI, Feb 21 (Reuters) – The rapid rise of fast-fashion e-commerce retailers such as Shein and Temu is upending the global air cargo industry, as they increasingly vie for limited air-cargo space to woo consumers with rapid transit times, more than ten industry sources said.
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Asia gateways scramble as Gemini alliance plans big shift to feeder port network
Gemini Cooperation, the Maersk/Hapag-Lloyd alliance due to launch next February, is set to downgrade some of the carriers’ current key cargo gateways in Asia to feeder ports under its proposed “hub-and-spoke” network linking Asia with Europe, the Mediterranean and North America.
– Read More

Panama Canal revenues up 14.9% in 2023 despite transit restrictions
In 2023 the Panama Canal’s revenues increased by 14.9% to $4.97 billion despite handling less cargo due to draught and transits restrictions caused by drought.
– Read More

FMC rules for truckers in chassis dispute with ocean carriers
The US Federal Maritime Commission (FMC) has ordered ocean carriers to stop mandating that cargo owners and their truckers use specific chassis on merchant haulage business, a decision that could shake up how containers are transported in the US.
– Read More

Air Force runs trials with autonomous cargo planes
Autonomous electric cargo plane builder Pyka this week delivered the first unit in a fleet of three Pyka Pelican Cargo aircraft on lease to AFWERX, the innovation arm of the Department of Air Force (DAF) and a directorate within the Air Force Research Laboratory.
– Read More

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