The global freight market is keeping APAC supply chain managers on their toes, with the 2024 peak shipping season doing its best to break all the rules. Read on for expert insights into what to expect and how you can come out ahead of the competition.
Peaking Early in 2024.
Traditionally, the peak season for international freight runs from mid-August through to the end of the year. This period sees increased volumes as retailers ship more cargo to prepare for their busy season. This leads to higher rates, tightening space, and more frequent delays.
However, this year, the market peaked early. By June, the traditional hallmarks of peak season were already evident: rapid spikes in sea and air freight rates, limited space, rolling bookings, and more frequent delays.
Why Did It Peak Early?
Several factors led to peak season arriving early, fundamentally stemming from reduced capacity and increased congestion.
Blank Sailings: Carriers have reduced capacity on key trade lanes, paving the way for higher rates, General Rate Increases (GRIs), and Peak Season Surcharges (PSS).
Red Sea Crisis: Diversions and schedule changes caused by the crisis have triggered congestion in Southeast Asian ports, primarily Singapore, increasing demand for direct bookings to avoid delays on transshipments.
Looming China Tariffs: With impending tariffs on the US market, importers have rushed to get their goods shipped. Many carriers have redirected their largest vessels to the Trans-Pacific Eastbound (TPEB) and Far-East Westbound (FEWB) trade lanes for better returns.
Equipment Shortages: Equipment shortages, particularly 40'HC containers, have been a significant issue in Asia’s main loading ports, especially China. Almost all carriers face challenges in the supply of empty containers.
What should shippers expect.
The effects of peak shipping season are felt throughout the supply chain as demand surges and bottlenecks form:
Procurement: Expect longer lead times, higher costs for materials, and delays at the origin.
Quoting: Rates spike for Sea and Air freight cargo, and carriers successfully push through surcharges.
Booking: With carriers heavily booked, securing space becomes harder, and bookings are rolled.
Customs: Customs clearance slows down due to heightened security measures and increased shipment volumes.
Last Mile: Increased volume leads to congestion and delays in last-mile services, along with higher delivery costs.
Looking forward.
Given the early peak, here’s what our logistics experts predict for the remainder of the year:
Rates: Continue to climb in what has been described as a slow burning peak season. Expect carriers to push for more GRI increases.
Continued High Demand: Record shipment counts will continue, indicating sustained demand and steady rates.
Top Tips for Navigating the 2024 Peak Season
Leverage Your Freight Forwarder: Use their expertise to foresee requirements and plan effectively to reduce costs and delays.
Place bookings early: Book ASAP to lock in rates and available space.
Use Logistics Data: Use average rate and transit times to make the best call for your cargo
Plan for the Peak: Incorporate higher costs and longer lead times into your planning.
Utilise Real-Time Tracking: Predict shipment delays and resolve issues quickly.
Set Accurate Expectations: Communicate clearly with your team and customers.
Have Backup Plans: Monitor performance and adjust as needed.
Peak Season APAC Timeline and Shipping Checklist
2024 has brought significant challenges for supply chain leaders in APAC. With more volatility and unexpected developments likely, effective planning and real-time visibility into market benchmarks and shipment status will be critical to reducing the financial and operational burden for Australian shippers.
Need help planning your peak season or accessing the international freight market data you need? Contact our team of experienced logistics specialists to learn more about our freight forwarding services and how you can get a free trial of our supply chain management technology.
