Some Rate Relief as “Christmas in July” Demand Wanes
In this market update, Asia to North America rates are retreating, particularly to the West Coast, due to increased capacity and niche carriers entering the market. Severe weather around the Cape of Good Hope is causing delays, with some vessels temporarily diverting to the Panama Canal. Rates from the Indian Subcontinent to North America are surging due to scarce space, though new services from Hapag and CMA should help. US export rates are rising due to global demand, and Asia to Europe sees equipment shortages and port congestion easing slightly. Air freight tonnage and rates show continued growth.
Asia to North America
Rates continue to retreat especially to WC NA as capacity and niche carriers enter the market increasing capacity. Demand also showed some signs of waning. Rates to EC are easing but not as quickly as WC mostly due to continued capacity constraints and concerns over potential labor strikes. We will continue monitoring the measures that carriers take to offset any potential sharp drop off in rates. More blank sailings have been announced in August to proactively manage capacity and keep rates elevated.
Cape of Good Hope
Last week severe weather conditions around the Cape of Good Hope forced container lines to seek shelter from strong winds and high waves. CMA-CGM’s vessel lost 44 containers overboard when the vessel went around the Cape of Good Hope on July 9th. It’s reported that about 600 container ships routing around Africa could be impacted by the extreme weather. Vessel diversions from the Red Sea since last November have added 14 days or more to the voyage between the US and Asia. We expect some vessels may be temporarily diverted to route via the Panama Canal. Wave heights have reduced to 23-26 feet and are expected to continue decreasing. Estimated arrival times for vessels have been delayed by 24-48 hours, and some vessel bunching may occur at ports globally.
India to North America
Freight rates from the Indian Subcontinent continue to surge as space is scarce. New standalone services from Hapag and CMA beginning in August should provide some relief.
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
Equipment shortages and port congestion is improving, however, there are several blank sailings announced for the second half of July and August.
Asia to North America/Europe
Global tonnage and rates continue to show 9-10% year-on-year growth as some sea freight is converted to air to avoid longer transit times. E-commerce continues to support year-on-year volume growth across both markets Asia to Europe & North America.
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