While we have seen a steady climb in pricing ex NEA to Oceania since May, the market has largely stabilised. With demand softening, we are now seeing rates reduce with some carriers, although only marginally.
From 15th July we are seeing rates of USD1200-1600 per TEU. MSC is leading the charge with FAK rates double the market average at levels exceeding USD2100 per TEU.
SEA remains slightly lower in comparison, with rates in the vicinity of USD1000-1500 per TEU
West Coast pricing is now in line with the East Coast with most carriers.
General Rate Increases (GRIs) / Peak Season Surcharges (PSS):
Gold Star Line: GRI of USD150.00 per TEU ex SEA to Oceania, effective 1st July 2024
Cosco: GRI of USD500.00 per TEU ex SEA to Oceania, effective 1st July 2024
Maersk: PSS of USD500.00 per TEU ex SEA to Oceania, effective 1st July 2024
ANL: PSS of USD300.00 per TEU ex SEA & NEA to Oceania, effective 15th July 2024
1st August will see another round of carrier GRIs.
OOCL - USD300.00 per TEU ex SEA & NEA to NZ
Cosco - USD300.00 per TEU ex NEA to AU
Cosco - USD500.00 per TEU ex NEA to NZ
ANL - USD300.00 per TEU ex NEA to AU/NZ
MSC - USD300.00 per TEU ex NEA & SEA to AU/NZ
Capacity:
We have seen an early start to traditional peak season this year - largely driven by retailers stockpiling ahead of the standard busy months of July-September.
The FOMO (fear of missing out) mindset curated during the pandemic has played into earlier than usual orders and with looming CN tariffs for the US market, importers have scrambled to get their goods on the water.
This has also led many carriers to redirect their largest vessels to the Trans-Pacific Eastbound (TPEB) and Far-East Westbound (FEWB) trade lanes, where they are getting the biggest bang for their buck.
Schedule Reliability:
In May 2024, global schedule reliability improved by 3.8 percentage points MoM to 55.8%. This is now the highest schedule reliability figure for 2024, and 1.2 percentage points higher than the previous highest figure of 54.6%. On a YoY level however, schedule reliability in May 2024 was -11.0 percentage points lower.
CMA CGM was the most reliable top-13 carrier in May 2024 with schedule reliability of 57.1%. There were another 7 carriers above the 50% mark, with the remaining 5 carriers in the 40%-50% range. PIL was the least reliable carrier with schedule reliability of 44.5%.
10 of these carriers were able to record a MoM improvement in schedule reliability in May 2024, with Maersk and CMA CGM recording the highest improvement of 6.0 percentage points. Wan Hai recorded the largest decline of -4.5 percentage points. On a YoY level, none of the 13 carriers recorded an increase in schedule reliability, with 8 carriers recording double-digit YoY declines. Source: https://www.sea-intelligence.com/press-room/272-global-schedule-reliability-increases-to-highest-ytd-level
Sea Intelligence: Global Schedule Reliability and Average Delays data
Sea Intelligence: Carrier On Time performance scores
Equipment Shortages:
Equipment shortages remain a major problem in Asia. 40'HC are particularly scarce, with the biggest shortage in China. Almost all carriers are experiencing a challenge in the supply of empties.
While FCL shipping remains mostly unstable with uncertainty of costs, LCL is a good option to consider.
LCL pricing has not been as heavily impacted by the rising costs rolled out by the shipping lines. This is a great option for customers who are shipping smaller quantities, more regularly.
We partner with the most competitive wholesale co-loaders to provide our customers with efficient, affordable LCL solutions from both an import and export perspective. If you would like to run some costings for an LCL solution for your business, contact us today.
Port Congestion:
The congestion at the world's largest transshipment hub, Singapore, has now spread to Port Klang in Malaysia.
Singapore connects more than 600 ports from 123 countries and has an annual capacity of 50M 20ft equivalent units - congestion is now at its worst since the pandemic. 90% of vessels are arriving later than scheduled due to extended transits around Africa.
Approximately 20 vessels are currently anchored outside of Port Klang, with Tanjung Pelepas also showing signs of congestion. This is extending to other hubs in Asia such as Shanghai, Ningbo, and Busan.
In an effort to expand Singapore's port capacity, the first of three additional berths commenced operations on 1st July. The $20 billion Tuas Port Terminal will open the additional berths in October and December, as part of a plan to alleviate congestion and scale up capacity.
USA Market:
Volumes remain strong on the TPEB trade. Blank sailings and congestion are a byproduct of extended transits around the Cape of Good Hope.
Carriers are offering expedited transits (at a cost of course!) with guaranteed space and premium options.
There has been a surge in demand ex China ahead of new tariffs being imposed. Namely - electric vehicles, semiconductors, and solar panels. This is inciting somewhat of a trade war between the two nations.
Baltimore is now fully operational and unrestricted.
Rates ex China to USWC are now sitting at USD7100.00 per 40'. An increase of 18%.
Rates ex China to USEC are USD8300.00 per 40'. An increase of 9%.
Union tensions at East Coast ports - strike action may be on the cards. The International Longshoremen Association (ILA), which represents some 85,000 port workers on the US East Coast and US Gulf, suspended talks with the US Maritime Alliance in June, due to a disagreement on automation. The current labour agreement expires on 30 September, and the ILA is also seeking salary increments of around 40%, citing liner operators’ huge profits. Source: https://container-news.com/us-east-coast-strike-risk-could-mean-more-spikes-in-freight-rates/
With volumes set to peak in August, it is estimated that rates could creep as high as pandemic levels - upwards of USD10,000 per 40'
Europe Market:
Northern Europe demand has not been affected. Rates remain stable and validity is extended for Q3.
The Panama Canal Authority has marked the eighth anniversary of its expansion program by reporting an increase in draft and daily transits.
The authority raised the maximum authorised draft from 46 to 47 feet (14.33 metres) on 27 June, increasing to 48 feet (14.063 metres) on 11 July. In addition, a new booking slot for the Neopanamax locks will be introduced on 5 August, increasing the total number of transits to 35 each day. Source: https://www.porttechnology.org/news/panama-canal-increases-draft-and-daily-transits-2/
Data released this week for last month shows that revenues of the Suez Canal dropped by 64.3 percent to approximately $337.8 million, compared to $648 million recorded in May 2023. In an effort to bolster revenue, the Suez Canal is now offering extended fee discounts for a range of vessels on selected long-distance trades. Volumes have dropped significantly due to the ongoing conflict in the Red Sea. Source: https://maritime-executive.com/article/suez-canal-authority-extends-discounts-as-traffic-and-revenues-plummet
Germany’s powerful union Ver.di is continuing to stage a series of “warning strikes” rolling across the main German commercial ports as the union says they are “still far apart” on contract negotiations. Warning strikes have ranged from Hamburg on June 7, to Bremen (June 11), Bremerhaven (June 12), and Emden (June 14). Coordinated to the third round, Ver.di called for the broadest strike which hit Hamburg, Bremen, Bremerhaven, Brake, and Emden along with a coordinated rally in Hamburg where they said 1,500 to 2,000 members were expected. The strike brought container movements to a standstill and caused backups of trucks on major roads around the Hamburg port. Source: https://maritime-executive.com/article/disruptions-grow-at-german-ports-as-labor-talks-drag-on
Airfreight Update:
Air cargo demand rose 14.7% in May, with a 5.3% increase MoM. This continues on from 6 months of double-digit growth.
Airfreight demand remains strong, and it is expected to roll into a challenging Q4, with higher spot rates expected.
Challenging ocean freight conditions have contributed to higher demand in airfreight throughout May and June, but the market has stabilised in early July, with pricing and space leveling out in the APAC market.
Growing e-commerce demand due to Red Sea conflicts caused spot rates to spike 17% YoY to over USD$2.62/kg according to Xeneta.
SEA to the US saw the largest jump in rates, up 14% YoY to USD$5.23/kg according to Xeneta.
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