Weekly Roundup – June 20, 2024

Welcome back to the weekly roundup, where we provide concise summaries of the most important supply chain and logistics stories of the week. Covering breaking news, emerging threats, and changing market dynamics, it contains all the news you need to maintain a competitive advantage.

The Port of Baltimore is reopened from the bridge collapse. How much cargo will return?

Following the Francis Scott Key Bridge collapse in March, which killed six workers and halted access to the Port of Baltimore, many shippers and carriers asked how they could help. Maryland Port Administration Executive Director Jonathan Daniels simply asked them to return when the channel reopens. The port fully reopened after eleven weeks, but vessel traffic is not expected to normalize until 2025. Despite initial fears, no customers plan to permanently divert their supply chains. Labor and trucking sectors are eager to resume, with enhanced capacity and visibility measures, such as joining the federal FLOW data-sharing program and expanding auto shipment space.

Specter of port strike looming over as-yet unscathed trans-Atlantic trade

Shippers and forwarders on the trans-Atlantic trade face potential disruptions this fall due to stalled contract talks and a possible strike at US East and Gulf coast ports. To avoid disruptions, cargo owners may adopt frontloading strategies similar to those used in Asian trades, potentially causing capacity shortages and rate hikes. With negotiations between the International Longshoremen’s Association and the United States Maritime Alliance halted, a strike could occur if no agreement is reached by September 30. This situation has led to concerns over delays, increased costs, and operational disruptions, prompting shippers to consider alternative routes and pre-strike planning. However, options for US importers are limited, and equipment shortages are affecting trans-Atlantic shipments due to prioritized Asian routes.

Airfreight maintains ‘remarkable’ volumes, as ecommerce soars

The US Customs and Border Protection’s new e-commerce rules and increased scrutiny have not affected airfreight rates, with volumes and rates remaining strong. Despite planned e-commerce services faltering, existing traffic holds steady, supporting a potential double-digit growth this year. Air cargo benefits from high sea freight rates and unreliable services, maintaining steady rates ex-China and strong bookings from Asia to the US. However, skepticism about e-commerce’s impact on airfreight capacity and its economic value persists. Some industry experts believe that commercial carriers may eventually exit the e-commerce sector due to low margins. For now, e-commerce volumes continue to dominate airfreight capacity.

Intra-Asia rates hit new heights as demand grows

Soaring demand has allowed container lines serving Indian trades to increase rates significantly, especially on intra-Asia services from China. Spot rates from North China to West India have exceeded $5,000 for a 40ft container, and similar rate hikes are seen from other Far East locations. Intra-Asia rates to India have risen by 200% to 250% over the past month. Tight vessel capacity, fewer sailings, and schedule disruptions are causing cargo rollovers and unpredictable transit times. This situation is expected to last until February, impacting Indian importers and exporters. Port congestion and equipment shortages are adding to the challenges.

Navigating the Changing Tides of the Container Shipping Industry in East Asia

East Asia’s container shipping industry is adapting to changing customer demands and geopolitical shifts, focusing on high-quality exports amid weak consumption in Europe. Ports in the region are investing in infrastructure to handle larger vessels and increased cargo volumes. To combat industry oversupply, Ocean Network Express (ONE) is enhancing service quality and optimizing space allocation. Customer demand is increasingly influenced by sustainable practices and green technologies, prompting companies to innovate and improve communication. Embracing digitalization and sustainability, the industry aims to boost efficiency, reduce costs, and foster long-term competitiveness and collaboration.

Spot rate growth slows but ocean container shipping market will remain extremely challenging

Ocean freight container shipping spot rates are expected to rise further, though the pace of increase is slowing. According to Xeneta, rates from the Far East to the US West Coast will rise by 4.8% on 15 June to $6,178 per 40ft container, less than the 20% increase on 1 June. Rates to the US East Coast will increase by 3.9% to $7,114 per FEU, compared to a 15% jump on 1 June. Far East to North Europe rates will rise by 10% to $6,357 per FEU, and rates to the Mediterranean will go up by 7.2% to $7,048 per FEU. Despite the slowing growth, shippers face challenges like port congestion, equipment shortages, and potential labor strikes, which maintain severe pressure on the shipping system.

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