Trends to Watch

[Ocean – TPEB]

• Volumes remain very strong and exceed last year’s numbers on the Transpacific route, despite structurally blank sailings due to Cape of Good Hope (COGH) routings and port congestion in Asia and North America. We’re seeing more premium offerings from shipping lines, featuring expedited services and guaranteed equipment and space, while other carriers attempt to reduce the backlog in Asia with extra loader space.
• Floating rates: All General Rate Increases (GRIs) for June have been maintained, with further rounds to be implemented on all Transpacific Eastbound gateways, based on the peak conditions anticipated for June and July. Carriers expect these rate hikes to persist and accelerate in the short term, as vessels departing Asia are expected to be full through June. The Pacific Southwest is at full capacity, while the Pacific Northwest will be near full capacity by the end of month and into July. The route from Vietnam and South/East China (Yantian/Shanghai/Ningbo) to the Pacific Southwest is particularly tight.
• Fixed rates: Carriers successfully raised the Peak Season Surcharge (PSS) on June 15, with additional increases already announced for July.

[Ocean – FEWB]

• Equipment shortages have become severe in most of Asia’s main loading ports. Liners are repositioning empty containers to improve the situation, but with the continued delays on vessels rerouting via the Cape of Good Hope, we foresee this issue persisting in the coming weeks.
• Port congestion in Asia remains high due to elevated yard utilization, unexpected bad weather, and vessel bunching, leading to low terminal operation efficiency and long wait times. This situation has led to last-minute port omissions by carriers trying to catch up with transit timing.
• The port strikes at Bremerhaven, Hamburg, and Le Havre have not affected schedules yet, but hinterland networks are at risk of delays. Clients importing cargo to Germany and France should closely monitor deliveries, as the strikes could extend into July if the unions do not receive a satisfactory response from the government to their demands.
• Demand continues to be stronger than usual, and rates rose again for the second half of June ($1,500-2000 increase per 40-foot container). With equipment shortages, customers are likely to keep pushing cargo out to avoid further delays. Liners are preparing for the next General Rate Increase in the first half of July by another $1000 per 40-foot container.
• Shippers are pushing cargo for earlier departures to avoid further freight cost increases. Unless space has already been secured, all vessels are full. To push cargo out at earlier estimated times of departure (ETD) and avoid delays, more carriers are open to premium options to get cargo loaded on the first available departure date with higher equipment priority.
• Flexport continues to monitor the situation and advises booking early, placing bookings in smaller slots, and picking up empty containers as soon as possible. For urgent cargo with a target delivery date, it is recommended to opt for the premium option as early as possible.

[Ocean – TAWB]

• In Northern Europe, demand remains stable, and carriers are responding by extending their rate levels until July.
• There are equipment issues in Southern and Eastern Germany and the Hinterlands (Austria, Hungary, Slovakia, Czech Republic, Switzerland).
• In the Western Mediterranean (WMED), congestion and equipment issues at key ports, along with reduced schedule reliability, are impacting the market. Carriers are planning to implement General Rate Increases from July, following the demand (250-350/TEU).
• The Eastern Mediterranean (EMED) is also experiencing the effects of congestion at Mediterranean ports. Some carriers have announced equipment imbalance and operational charges due to increased costs on routes from the Mediterranean to the US and equipment availability issues in specific areas of Turkey, Greece, and Egypt.
• To ensure the smoothest loading experience, it is recommended to book 2-3 weeks in advance.

[Ocean – Indian Subcontinent]

• Capacity is constrained due to blank sailings and increased demand from Indian Subcontinent (ISC) countries, as well as Southeast Asia and China. Rising demand from Southeast Asia and China has created a capacity crunch for the ISC region, since many services are shared.
• Rates continued to increase week over week, except for the Northwest India to US East Coast (USEC) lanes.
• Outlook continued blank sailings are expected from Northwest India to USEC. As a result, we can expect stabilized rates and potentially some upward momentum if the rate of blank sailings increases.
• News: CMA and HPL have announced that they will no longer cooperate on the INDAMEX and IN2 services. Instead, they will each launch their own services, both named the INDAMEX. This increase in services will not significantly impact available capacity, most of which already existed in the market and is merely being redistributed.

[Ocean – U.S. Exports]

• Extended transit times caused by routing around the Cape of Good Hope and growing congestion at key ports in Asia and Europe are further exacerbating the container equipment situation for US exporters, particularly for shippers loading at inland rail points.
• Congested key destination transhipment hubs for US exporters include Asia base ports and Strait of Gibraltar ports Tanger-Med and Algeciras.
• Due to operational constraints at the Port of Charleston, we are seeing vessel omissions for Transatlantic and Transpacific services, with some shifts to services calling at the Port of Savannah instead.
• With schedule reliability impacted by global disruptions, irregularities in managing earliest return dates (ERDs) for delivering laden containers to loading point are expected.
• To ensure the smoothest loading experience, it is recommended to book 3-4 weeks in advance for bookings loading at a coastal port and 4+ weeks in advance for bookings loading at an inland rail point.

[Air – Global] (Data Source: WorldACD)

• Asia Pacific air cargo surge: Air cargo demand and rates from Asia Pacific origins increased year-on-year (YoY) by 20% in tonnage and 16% in rates for the last two weeks (weeks 22 and 23) up to June 9, 2024. Spot rates from Vietnam to Europe rose by 143% YoY, reaching $4.47 per kilo, with tonnages up 28% YoY.
• Spot rate variations: Significant YoY increases in spot rates to Europe were observed from several Asia Pacific origin markets in week 23, including China (+32%), Hong Kong (+18%), Malaysia (+83%), Indonesia (+46%), and Thailand (+43%). The average spot rate from Asia Pacific to the USA stood at $5.23 per kilo (+51% YoY), and from China at $5.30 per kilo (+38% YoY).
• Middle East & South Asia (MESA) boom: MESA origin rates to Europe more than doubled YoY for the last ten weeks, driven by high prices from India and Bangladesh. Overall, rates from MESA origins worldwide increased by 50% YoY in weeks 22 and 23, while average worldwide rates remained firm at $2.52 per kilo, despite declines from Europe (-16%) and North America (-11%).
• Global air cargo trends: Despite a slight decline in worldwide chargeable weight flown (-1%) compared to the previous two weeks, worldwide tonnages rose by 12% YoY in weeks 22 and 23.
• Capacity shortages: Air and ocean freight capacity shortages, exacerbated by disrupted sea freight services due to Red Sea attacks, port congestion, and vessel capacity shortages, have driven more cargo owners to opt for air cargo solutions, significantly impacting spot rates and demand across various Asia Pacific origin markets.

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

 

 

Flexport Ocean Timeliness Indicator

Ocean Timeliness Indicators for China to U.S. East Coast and China to Northern Europe Increases for the Fifth Straight Week

Week to June 17, 2024

This week, the Ocean Timeliness Indicator for China to the U.S. East Coast and China to Northern Europe continued an increase seen throughout May and June. The China to the U.S. East Coast OTI increased to 61 Days, and the China to Northern Europe OTI increased to 67 days due to routing around the Cape of Good. However, the China to the U.S. West Coast OTI decreased to 38 days.

 

 

Source from Flexport.com

Trends to Watch

[Ocean – TPEB]

• Volumes continue to be very strong and above last year’s numbers on Transpacific while we see structurally blank sailings due to Cape of Good Hope (COGH) routings and port congestion in Asia and North America.
• Floating rates: All general rate increases for the month of June have stuck, with further rounds to be implemented on all Transpacific Eastbound gateways based on the peak conditions we are seeing in June and July. Carriers expect these rate hikes to stick and accelerate in the short term, since vessels leaving Asia are expected to be full through June: Pacific Southwest is full; Pacific Northwest is close to full into the end of month and into June. Particularly Vietnam + South/East China (Yantian/Shanghai/Ningbo) into the Pacific Southwest is especially tight.
• Fixed rates: Carriers successfully implemented a Peak Season Surcharge (PSS) on June 1, and the PSS will be increased again on June 15 while further adjustments are already announced for July.

[Ocean – FEWB]

• Equipment shortages became severe in most of Asia’s main loading ports and liners are repositioning empty containers to improve the situation, but with the continued delays on vessels rerouting via Cape of Good Hope, we foresee it may continue in coming weeks.
• Port congestion in Asia remains severe mainly due to high yard utilization, unexpected bad weather and vessel bunching, leading to low terminal operation efficiency and long waiting times, causing last-minute port omission by carriers to catch up with the transit time.
• Demand continues to be stronger than usual and rates rose again for the second half of June ($1,500-2000 increase per 40-foot container). We expect the increase in demand to be driven not only by consumer demand but also by companies building stock due to the longer than anticipated lead times and companies trying to secure space.
• Carriers are increasing the PSS quantum to $1000-1500/TEU, aiming for existing long-term fixed deals.
• Shippers continue to push cargo for earlier departure to avoid further freight cost increases. Unless space has already been secured, all vessels are full. To push cargo on sooner estimated time of departure (ETD) and avoid delays, more carriers are open to Premium options to get cargo loaded on the first available departure date with higher equipment priority.
• Flexport continues to monitor the situation and we advise to book early, place bookings in smaller slots and pick up empty containers as soon as possible. For urgent cargo with a target delivery date, it is recommended to move on the Premium option as early as possible.

[Ocean – TAWB]

• In North Europe, the demand is stable and carriers are following the trend by extending their rate levels until July.
• There are equipment issues in Southern and Eastern Germany and the Hinterlands (Austria, Hungary, Slovakia).
• In the Western Mediterranean, congestion and equipment issues in certain main ports, along with reduced schedule reliability, have impacted the market. Carriers are implementing GRI/PSS from July following the demand.
• In the Eastern Mediterranean, equipment availability is good and there is no severe congestion in the ports.
• To ensure the smoothest loading experience, we recommend booking 2 to 3 weeks in advance.

[Operations – Canada]

• Border-Agent Union Negotiations: At the time of publishing, a tentative agreement has been reached for 9,000 workers at Canada Border Services Agency (CBSA) and a strike has been avoided. Full details of the agreement are to be announced on June 13.

[Ocean – U.S. Exports]

• Extended transit times due to routing around Cape of Good Hope and growing congestion at key ports further devolves the container equipment situation for U.S. exporters, especially shippers loading at inland rail points.
• Congestion at key destination transhipment hubs for U.S. exporters include ports in Asia and Strait of Gibraltar ports Tanger-Med and Algeciras.
• Due to operational constraints at the Port of Charleston, we are seeing vessel omission for Transatlantic and Transpacific services.
• To ensure the smoothest loading experience, we recommend booking 3-4 weeks in advance for bookings loading at a coastal port and 4+ weeks in advance for bookings loading at an inland rail point.

[Air – Global] (Data Source: WorldACD)

• Air cargo rates from Middle East & South Asia (MESA) to Europe averaged over twice their level from May last year, with May’s average spot rate at $3.35 per kilo, up 128% YoY.
• Elevated spot prices from India to Europe ($3.78 per kilo, +160%) and Bangladesh to Europe ($4.38 per kilo, +189%) contributed to increases in overall average rates from MESA origins to Europe (up by 77% YoY).
• Asia Pacific origins saw a 21% rise in tonnages in May YoY, with air cargo rates rising nearly 12%, marking the first significant YoY full-month increase this year.
• Global average air cargo rates remained steady at $2.51 per kilo in week 22, up 1% WoW and 7% YoY, with overall rates in May up by 3% YoY and chargeable weight up by 13% YoY.
• Global average air cargo rates in week 22 were $2.51 per kilo, up 1% week on week and 7% year on year, and significantly above pre-COVID levels, up 42% compared to May 2019.

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

 

 

Source from Flexport.com

Trends to Watch

[Operations – Canada]

• Border-Agent Union Negotiations: The Canada Border Services Agency (CBSA) will be in a legal strike position as of June 6. The majority of the members are considered essential and can not legally perform “work to rule action” or intentionally slow down trade. A simple 5-10 min delay off the normal average crossing time could have a large cumulative effect. Importers should expect to experience delays with their imports if a strike is called.
• Canadian Rail Negotiations: The Canada Industrial Relations Board (CIRB) has directed the Teamsters National Rail Conference (TCRC), the Canadian National (CN) and Canadian Pacific Kansas City (CPKC) to provide final replies by June 14, which could mean a CIRB decision and possibly a strike, by the end of the month.The Teamsters National Rail Conference (TCRC) union has vowed to strike at the earliest opportunity after the CIRB ruling, and there have been no negotiations in the meantime. The CN, CPKC and the Canadian International Forwarders Association (CIFA) have requested a longer period than 72 hours from decision for strike to be able to occur.

[Ocean – TPEB]

• The early peak conditions for Transpacific Eastbound Ocean freight that we entered in the month of May continue through the first part of June with volumes expected to be +10% higher YoY.
• Floating rates: All general rate increases for the month of May have stuck with further rounds to be implemented on all Transpacific Eastbound gateways based on the peak conditions we are seeing in June. Carriers expect these rate hikes to stick and accelerate in the short term since vessels leaving Asia are expected to be full through June – Pacific Southwest is full, Pacific Northwest is close to full into the end of month and into June. Particularly Vietnam + South/East China (Yantian/Shanghai/Ningbo) into the Pacific Southwest is especially tight.
• Fixed rates: Carriers implemented a Peak Season Surcharge (PSS) on June 1, and it is likely that the PSS will be increased again on June 15. More updates to come shortly as plans are finalized.

[Ocean – FEWB]

• The market continues to tighten and space is constrained at least up until the end of June, trending to July. Multiple factors are at play including port congestion, equipment shortages, and the continued delays on vessels rerouting via Cape of Good Hope resulting in low reliability and blank sailings reported out of Asia intensifying the situation.
• Port congestion in Asia remains severe mainly due to high yard utilization, unexpected bad weather and vessel bunching, leading to low terminal operation efficiency and long waiting times, causing last-minute port omission by carriers to catch up with the transit time.
• Demand continues to be stronger than usual and rates rose again for the first half of June followed by another increase for the second half of June ($1,000 – $2,000 increase per 40-foot container). We expect the increase in demand to be driven not only by consumer demand but also by companies building stock due to the longer than anticipated lead times and companies trying to secure space.
• Carriers are increasing the Peak Season Surcharge (PSS) quantum to $1000-1500/TEU aiming for existing long term fixed deals.
• Shippers continue to push cargo for earlier departure to avoid further freight cost increases. Unless space has already been secured, all vessels are full. To push cargo on sooner ETD (estimated time of departure) and avoid delays, more carriers are open to Premium options to get cargo loaded on the first available departure date with higher equipment priority.
• Flexport continues to monitor the situation and we advise to book early, place bookings in smaller lots, and pick up empty containers as soon as possible. For urgent cargo with a target delivery date, it is recommended to move on the Premium option as early as possible.
• Read more about the situation in Why Ocean Freight Rates are Surging: A Look at the Supply Shock after the Red Sea Disruptions.

[Ocean – U.S. Exports]

• Container availability for inland U.S. exporters has become much more challenging. This is a result of the global disruptions in container shipping and their subsequent impact to the flow of laden and empty containers.
• The extended transit times seen due to routing around Cape of Good Hope, growing port congestion at key ports, further devolves the container equipment situation for U.S. exporters, especially shippers loading at inland rail points.
• Congestion at key destination transhipment hubs for U.S. exporters include Asia Base Ports and Strait of Gibraltar ports Tanger-Med and Algeciras.
• To ensure the smoothest loading experience, Flexport recommends booking 3-4 weeks in advance for bookings loading at a coastal port, and 4+ weeks in advance for bookings loading at an inland rail point.

[Air – Global] (Data Source: WorldACD)

• Rates: Global air cargo rates have surpassed 2023 levels for the first time this year, with an average increase of 4%. However, this is partly due to strong demand from Asia Pacific with higher rates. Notably, rates are significantly higher than pre-pandemic levels, sitting at 41% above May 2019.
• Tonnages: Global tonnages are up 9% YoY, primarily driven by Asia Pacific (+16%) and Middle East & South Asia (+14%). However, there was a slight decrease of 2% last week.
• Capacity: Capacity remains stable globally but has grown 7% compared to the same period last year. Central & South America saw a substantial decrease (-17%) due to airlines removing capacity used for Mother’s Day flower shipments.
• Regional Highlights: Dubai to Europe shows significant YoY tonnage growth (+26%) driven by sea-air cargo demand. Both Asia Pacific and Middle East & South Asia continue double-digit YoY growth (+16% and +14% respectively).
• Post-holiday impact: The recent tonnages reflect a recovery from China’s Labor Day and Golden Week holidays. While Asia Pacific shows an 8% increase, half can be attributed to Golden Week.

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

 

 

 

Trends to Watch

[Ocean – TPEB]

• We have entered peak conditions for Transpacific Eastbound Ocean freight in the month of May. May imports are up +6.8% YoY and we do not expect this increase in demand to subside through the traditional peak season (expect June imports to be 10.7% higher YoY).
• Floating rates: The 1H May $1000 GRI stuck, and we expect another $1000 GRI to be implemented on all Transpacific Eastbound gateways based on the peak conditions we are seeing in May. Carriers expect these rate hikes to stick and accelerate in the short term since vessels leaving Asia are expected to be full through May/June – Pacific Southwest is full, Pacific Northwest is close to full into EOM and into June. Particularly Vietnam + South/East China (Yantian/Shanghai/Ningbo) into the Pacific Southwest is especially tight.
• Fixed rates: Starting June 1, carriers will implement a Peak Season Surcharge (PSS), and it is likely that the PSS will be increased again on June 15th. More updates to come later this month as plans are finalized.
• Importers expect a tough peak season, and are trying to head ahead of uncertainties. For more insights, read this thread by Ryan Petersen, CEO of Flexport on X.

[Ocean – FEWB]

• The market continues to tighten and space is constrained at least up until mid-June. Multiple factors are at play including port congestion, equipment shortages and the continued delays on vessels rerouting via Cape of Good Hope resulting in low reliability and blank sailings reported out of Asia intensifying the situation.
• Demand continues to be stronger than usual and rates rose again for the first half of June followed by another increase for the second half of June ($1,000 increase per 40-foot container). We expect the increase in demand to be driven not only by consumer demand but also by companies building stock due to the longer than anticipated lead times and companies trying to secure space.
• Shippers continue to push cargo for earlier departure to avoid further freight cost increases. Unless space has already been secured, all vessels are full. To push cargo on sooner ETD (estimated time of departure) and avoid delays, more carriers are open to Premium options to get cargo loaded on the first available departure date with higher equipment priority.
• Flexport continues to monitor the situation and we advise to book early, place bookings in smaller slots and pick up empty containers as soon as possible. For urgent cargo with a target delivery date, it is recommended to move on the Premium option as early as possible.
• Read more about the situation in Why Ocean Freight Rates are Surging: A Look at the Supply Shock after the Red Sea Disruptions.

[Ocean – U.S. Exports]

• Container availability for inland U.S. exporters has become much more challenging. This is a result of the global disruptions in container shipping and their subsequent impact to the flow of laden and empty containers.
• The extended transit times seen due to routing around Cape of Good Hope, growing port congestion at key ports, further devolves the container equipment situation for U.S. exporters, especially shippers loading at inland rail points.
• Congestion at key destination transhipment hubs for U.S. exporters include Asia Base Ports and Strait of Gibraltar ports Tanger-Med and Algeciras.
• To ensure the smoothest loading experience, Flexport recommends booking 3-4 weeks in advance for bookings loading at a coastal port, and 4+ weeks in advance for bookings loading at an inland rail point.

[Air – Global] (Data Source: WorldACD)

• Tonnage and Rate Increases: Worldwide air cargo tonnages rebounded by +2% in week 20, following a similar increase the previous week. Average global rates slightly rose to $2.48 per kilo in week 20, up +2% YoY and +40% from May 2019 levels. Tonnages from Middle East & South Asia to Europe increased by +31% YoY in the last two weeks, with Dubai leading at +148%.
• Regional Rate Variations: Middle East & South Asia to Europe rates remain more than double (+119%) YoY. Rates from Bangladesh to Europe reached $4.66 per kilo in week 20, nearly triple (+186%) YoY. India to Europe rates, though slightly eased, are still up +163% YoY at $3.72 per kilo.
• Asia Pacific Dynamics: Tonnages from Asia Pacific origins are up +15% YoY with rates up +10%. China to Europe tonnages increased by +19% and +10% in weeks 19 and 20, while Hong Kong to Europe tonnages rose +31% YoY.
• Market-Specific Developments: Vietnam to Europe rates doubled (+120%) YoY, exceeding $4 per kilo over the last eight weeks. Japan saw the largest 2Wo2W tonnage increase among top destination markets (+16%) post-Golden Week holiday.

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

 

 

Flexport Ocean Timeliness Indicator

Ocean Timeliness Indicator Across All Major Trade Lanes Increases Again

Week to May 27, 2024
This week, the Ocean Timeliness Indicator for all major trade lanes continued the increasing trend seen throughout May. The China to the U.S. East Coast OTI increased to 55 Days, the China to Northern Europe OTI increased to 64 days due to routing around the Cape of Good, and the China to the U.S. West Coast OTI increased to 36 days

 

Source from Flexport.com

Trends to Watch

[Ocean – TPEB]

• We have entered peak conditions for Transpacific Eastbound Ocean freight in the month of May. May imports are up +6.8% YoY and we do not expect this increase in demand to subside through the traditional peak season (expect June imports to be 10.7% higher YoY).
• Floating rates: The 1H May $1000 GRI stuck, and we expect another $1000 GRI is being implemented on all Transpacific Eastbound gateways based on the peak conditions we are seeing in May. Carriers expect these rate hikes to stick and accelerate in the short term since vessels leaving Asia are expected to be full through May/June – Pacific Southwest is full, Pacific Northwest is close to full into EOM and into June. Particularly Vietnam + South/East China (Yantian/Shanghai/Ningbo) into the Pacific Southwest is especially tight
• Fixed rates: Starting June 1, carriers will implement a Peak Season Surcharge (PSS), and it is likely that the PSS will be increased again on June 15th. More updates to come later this month as plans are finalized.
• Importers expect a tough peak season, and are trying to head ahead of uncertainties. For more insights, read this thread by Ryan Petersen, CEO of Flexport on X.

[Ocean – FEWB]

• The market continues to tighten and space is constrained at least up until mid-June. Multiple factors are at play including port congestion, equipment shortages and the continued delays on vessels rerouting via Cape of Good Hope resulting in low reliability and blank sailings reported out of Asia intensifying the situation (three from Ocean Alliance as voided and one from MSC as slide-down).
• Demand continues to be stronger than usual and rates rose again as the 2nd half May rate increases stuck. We expect the increase in demand to be driven not only by consumer demand but also by companies building stock due to the longer than anticipated lead times and companies trying to secure space. Further rate increases are announced for the first half of June ($1,000 per 40-foot container), which considering the situation, are expected to hold.
• Shippers continue to push cargo for earlier departure to avoid further freight cost increase. Unless space has already been secured, all vessels are full. To push cargo on sooner ETD (estimated time of departure) and avoid delays, more carriers are open to Premium options to get cargo loaded on the first available departure date with higher equipment priority.
• Flexport continues to monitor the situation and we advise to book early, place bookings in smaller slots and pick up empty containers as soon as possible.
• Read more about the situation in Why Ocean Freight Rates are Surging: A Look at the Supply Shock after the Red Sea Disruptions.

[Ocean – U.S. Exports]

• Container availability for inland U.S. exporters is becoming much more challenging. This is a result of the global disruptions in container shipping and their subsequent impact to the flow of laden and empty containers.
• The extended transit times seen due to routing around Cape of Good Hope, growing port congestion at key ports, further devolves the container equipment situation for U.S. exporters, especially shippers loading at inland rail points.
• To ensure the smoothest loading experience, recommend booking 3-4 weeks in advance.

[Operations – Canada]

• The Teamsters Canada Rail Conference initiated industrial action against Canadian National Railway and Canadian Pacific Kansas City following five months of failed negotiations, prompting Minister of Labour Seamus O’Regan to seek clarity from the Canadian Industrial Relations Board on essential rail services, with a decision expected by May 31, thereby preventing a strike on May 22.
• The BC Maritime Employers Association and International Longshore and Warehouse Union Ship and Dock Foreman Local 514 engaged in negotiations last week with the support of the Federal Mediation and Conciliation Service. The 21-day cooling-off period ended on May 10 and now both sides are free to initiate a strike or lockout with 72-hour notice. As of May 23, neither party has issued a 72-hour notice for strike or lockout, ensuring uninterrupted cargo and passenger operations at British Columbia’s ports.

[Air – Global] (Data Source: WorldACD)

• Tonnage and Demand Volatility: Air cargo demand from Asia Pacific partially rebounded in week 19, but the rebound was weaker compared to last year. Global tonnages remained higher YoY, despite the volatility caused by holidays such as China’s Labor Day, Easter, and Eid.
• Weekly Tonnage Analysis: Worldwide tonnages were flat in week 19, following a -9% drop in week 18 due to public holidays. This contrasts with last year’s +9% rebound in week 19 after a -9% decline in week 18.
• Regional Tonnage Trends: Asia Pacific tonnages showed an +8% recovery in week 19 after a -13% decline in week 18, with significant YoY growth (+14% in week 19). North America and MESA (Middle East & South Asia) saw minor week-on-week recoveries (+1%), while Africa, Europe, and CSA (Central & South America) experienced further declines.
• Pricing Trends: Average worldwide rates remained stable at $2.49/kg in week 19, a +2% increase YoY and +41% above May 2019 levels. Combined global rates for weeks 18 and 19 were up slightly on both a 2Wo2W (+1%) and YoY (+3%) basis, with significant YoY increases from MESA (+44%) and Asia Pacific (+12%).

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

 

 

Flexport Ocean Timeliness Indicator

Ocean Timeliness Indicators for China to US East Coast Increases While Other Major Trade Lanes Remain Stagnant

Week to May 20, 2024
This week, the OTI for China to the US East Coast increased to 54 Days while China to Northern Europe remained stagnant at 62 days due to routing around the Cape of Good, and the OTI for China to the U.S. West Coast remained at 35 days.

Source from Flexport.com

Trends to Watch

[Ocean – FEWB]

• The Red Sea situation continues to be chaotic with vessels rerouting via the Cape of Good Hope, impacting on-time performance and schedule reliability.
• Bookings remain strong after the Chinese Labor Holiday. Another round of GRI (General Rate Increase) for the second half of May is confirmed for $1000 per 40-foot container. Shippers are pushing cargo for earlier departure to avoid further freight cost increase. Unless space has already been secured, all vessels are full. To push cargo on sooner ETD (estimated time of departure) and avoid delays, more carriers are open to Premium options to get cargo loaded on the first available departure date with higher equipment priority.
• Carriers announced more blank sailings coming in June (three from Ocean Alliance as voided and one from MSC as slide-down).
• Carriers are also trying to push for another GRI for the first half of June, considering the current over-demand. Flexport will continue to monitor the market developments.
• More equipment shortages were reported by CMA/Evergreen/Hapag Lloyd/Yangming/HMM. Foreseeing the situation will be tough through May until empty containers are fully recovered. It is highly recommended to pick up containers right after the container yard opens, or as soon as EIR (Equipment Interchange Receipt) is available to print per carrier local practice. Don’t wait till the last minute!

[Air – Global] (Data Source: WorldACD)

• Global Tonnage Decline: Worldwide air cargo tonnages decreased by 12% WoW in the week starting April 29, primarily impacted by China’s Labor Day holiday and Japan’s Golden Week, with significant WoW declines in Asia Pacific (-16%) and moderate falls in other regions, including Europe and Central & South America.
• Rate and Demand Variances: Despite overall tonnage declines, demand and rates from the Middle East & South Asia (MESA) to Europe remain high, with average global rates rising slightly by 1% from the previous week to $2.51 per kilogram.
• Public Holiday Impact: The week’s tonnage fall was largely due to public holidays like China’s Labor Day, which affected multiple regions including Europe, Asia, and Africa. Adjusting for Japan’s Golden Week and post-peak flower shipments, the global decline would moderate from -12% to -9%.
• Regional Rate and Tonnage Trends: Year-on-year analysis shows substantial growth in tonnages and rates, particularly from the MESA region to Europe, with significant rate increases also seen from India and Dubai to Europe, reflecting continued strong demand and regional supply chain disruptions.

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

 

 

Flexport Ocean Timeliness Indicator

Ocean Timeliness Indicators Increase Across All Major Trade Lanes

Week to May 13, 2024
This week, the OTI for all major trade lanes increased with China to Northern Europe increasing to 62 days due to routing around the Cape of Good Hope, the OTI for China to the U.S. West Coast increasing to 36 days, and the OTI for China to the U.S. East Coast increasing to 52 days.

Trends to Watch

[Ocean – TPEB]

• The shipping year began on May 1 with a strong General Rate Increase. This increase in the spot shipping rates was due to strong U.S. import demand and the renewal of long-term fixed contracts, resulting in vessels sailing at or near capacity.
• The Panama Canal Authority announced another increase in daily transits. Shipping lines, however, remain cautious about re-deploying capacity through the canal as demand for ships on westbound (via Cape of Good Hope) transits remain high and vessel weight restrictions remain in place.
• We are keeping an eye on the Canadian railroad contract negotiations. The railway union has announced a possible strike beginning on May 22. A strike would impact all rail services within Canada on both Canadian National and CPKCS railways.

[Ocean – FEWB]

• The Red Sea situation continues to be chaotic with vessels rerouting via the Cape of Good Hope, impacting on-time performance and schedule reliability. Vessels on the water are still at risk of drone attacks. Vessels routed via the Mediterranean Sea might be impacted. We’re closely working with liners for any further deployment updates.
• Bookings remain strong after the Chinese Labor Holiday. Another round of GRI (General Rate Increase) for the second half of May is scheduled for $1000 per 40-foot container. Shippers are pushing cargo for earlier departure to avoid further freight cost increases. For now, vessels are projected full through Week 21 (the last week of May). Week 22 is also filling up. It is highly recommended to place bookings four weeks in advance if possible.
• More equipment shortages were reported by CMA/Evergreen/Hapag Lloyd/Yangming/HMM. Foreseeing the situation will be tough through May until empty containers are fully recovered. It is highly recommended to pick up containers right after the container yard opens, or as soon as EIR (Equipment Interchange Receipt) is available to print per carrier local practice. Don’t wait till the last minute!

[Ocean – FCL U.S. Exports]

• Capacity is available for base-port to base-port moves to Asia, North Europe and Mediterranean ports of discharge.
• Some inland rail locations are spotty on equipment related to global disruption of container flows. When booking to load at an inland rail point, shippers are encouraged to submit bookings 3-4 weeks in advance of CRD (cargo ready date).

[Air – Global] (Data Source: WorldACD)

• Air cargo tonnages from Central & South America (CSA) surged in the final week of April, primarily driven by the upcoming Mother’s Day in North America and other regions. This surge was notably fueled by flower growers, retailers, and logistics providers shipping in flowers ahead of the celebrations.
• According to the latest weekly figures from WorldACD Market Data, total worldwide tonnages rose by a further 5% in week 17 (22-28 April), following a 4% increase in week 16. This growth trend helped offset previous declines experienced in the preceding weeks due to various holiday periods like Easter and Eid.
• Average worldwide air cargo rates slightly dropped by 1% to US$2.47 per kilo in week 17, dipping fractionally below the level observed in the equivalent week last year (US$2.52). However, rates still remain notably higher compared to pre-COVID levels, showing a 37% increase compared to April 2019.
• Analysis by WorldACD indicates that outbound tonnages from CSA to North America rose by 48% on a 2-week comparison basis, primarily driven by the demand for flowers ahead of Mother’s Day. This surge in export traffic from CSA accounted for around 30% of the worldwide growth recorded in week 17.
• Pricing patterns also saw significant shifts, with rates from CSA to North America experiencing a 12% rise, contributing to a 6% overall increase in total air export rates from CSA. Additionally, Asia Pacific outbound rates increased by 7% year-on-year, while rates from MESA to Europe soared by 42%, attributed to strong demand and supply disruptions in container shipping.
• Certain Asia-Europe sea-air hubs, notably Dubai, have been experiencing exceptionally high air cargo demand to Europe since the beginning of the year, largely due to disruptions in Asia-Europe container shipping. Despite slight fluctuations due to holiday periods and other disruptions, demand for air cargo from these hubs remains robust, indicating ongoing challenges in sea freight reliability.

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

 

 

 

Flexport Ocean Timeliness Indicator

Ocean Timeliness Indicators Decrease for China to Europe but increase for China to U.S. West and East Coasts

Week to May 9, 2024
This week, the OTI for China to Northern Europe increased to 61 days, due to routing around the Cape of Good Hope and the OTI for China to the U.S. West Coast increased to 35 days. The OTI for China to the U.S. East Coast remained stagnant at 51 days.

Trends to Watch

[Ocean – FEWB]

• Asia-Europe: The Red Sea situation continues to impact freight market development. Vessels continue to reroute via the Cape of Good Hope and vessel schedules continue to fluctuate, impacting on-time performance & reliability.
• After the Day 8 product reshuffle of Ocean Alliance and THE Alliance blank sailings, market capacity dropped by 10-13% and spaces are getting tight for 2H April. Vessel utilization is good and claimed at more than 95%, with roll pool being built up for the Labor Day Holiday.
• Carriers are still implementing GRIs (General Rate Increases) to keep rates from dropping further. Some carriers recently announced rates at a $4000/40’ level for 2H April. Per the current market, demand is not overwhelming and vessels are mostly full due to blank sailings, so GRIs may not hold.
• For historical updates on the Red Sea situation, read more in Global Ocean Carriers Halt Red Sea Transits – What to Expect.

[Air – Global] (Data Source: WorldACD/Accenture)

• Global air cargo rates increased throughout March, reaching within -7% of the previous year’s levels and recovering to Q4 peak levels, driven by strong demand from Asia and the Middle East.
• Average global rates rose to $2.48 per kilo in week 13, following consistent weekly increases, with the gap from the previous year narrowing from -19% in early 2023 to -7% by the end of March.
• The recovery to Q4 peak levels is attributed to rate increases from Asia Pacific and Middle East & South Asia (MESA), fueled by cross-border e-commerce demand and disruptions in container shipping.
• Global air cargo tonnages in March were up +6% year on year, with a slowdown in growth compared to the January-February period, and tonnages for weeks 12 and 13 were down -3% compared to the preceding two weeks.
• Tonnages from key Asia-Europe sea-air hubs like Dubai and Colombo remain elevated due to disruptions in container shipping, with Dubai-Europe and Colombo-Europe tonnages up significantly year on year.

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

 

 

Flexport Ocean Timeliness Indicator

Ocean Timeliness Indicators for China to US West Coast Decreases, While China to US East Coast and China to Europe Increase

Week to April 8, 2024
This week, the OTI for China to Northern Europe increased slightly to 67 days due to continued re-routings from the Suez Canal around the Cape of Good Hope. The OTI for China to the US East Coast also increased significantly to 69 days as some carriers route westward around Cape of Good Hope. Most have decided to use the Panama Canal despite continued slot restrictions. We do not expect the Baltimore situation to impact the China to East Coast OTI overall. The OTI for China to the US West Coast continued to decrease this week to 32 days.

 

 

Source from Flexport.com

Trends to Watch

[Ocean – FEWB]

• Asia-Europe: The Red Sea situation continues to impact freight market development. Vessels continue rerouting via the Cape of Good Hope and vessel schedules continue fluctuating.
• Demand remains flat but is picking up. The Economic Sentiment Indicator for the Eurozone in March stood at 96.3, surpassing both the previous value and market expectations. With Labor Day approaching, there will be a long holiday in Mainland China. Production may be impacted, so expect bookings to increase in late April and slow down in the first week of May.
• General Rate Increases (GRI) were implemented by carriers to keep rates from dropping further. After a 9-week continuous drop, the latest Shanghai Containerized Freight Index (SCFI) increased by $51/TEU for week 14. Most of the carriers successfully pushed for a GRI in the 1st half of April. With most vessels projected to be full, expect another round of GRI for the 2nd half of April, as there are around 2 million TEU of new capacity for delivery in the coming months. Most of the capacities are mega ships where Asia-Europe trade will be the primary option. Expect GRI to be on and off in the coming months until all new ships are available.

[Air – Global] (Data Source: WorldACD/Accenture)

• Air cargo rates have increased globally, particularly from Asia Pacific and Middle East & South Asia (MESA), driven by disruptions in container shipping and a high demand for cross-border e-commerce shipments, with average global rates up by around +3% in week 12 to $2.45.
• Despite a slight decrease in global tonnages (-2%) in week 12 compared to the previous week, there was a +1% increase in tonnages and a +6% increase in average rates over the last two weeks compared to the prior period, with notable rate increases from MESA (+10%) and Asia Pacific (+7%).
• Year-on-year data shows significant improvements in demand, with global tonnages up by +8%, led by rises from MESA (+15%) and Asia Pacific (+12%), amid continued disruptions in Asia-Europe container shipping and strong e-commerce demand.
• Air cargo capacity has significantly increased over the last year (+9% globally), especially from Asia Pacific (+19%) and Central & South America (+12%), while average rates remain above pre-COVID levels, despite a year-on-year decrease.
• Notable regional highlights include a surge in demand and rates from MESA, with YoY tonnage up +15% and rates up +29% in weeks 11 and 12, and significant increases in air freight traffic from the Eastern Mediterranean to MESA due to container shipping disruptions, with Athens and Istanbul experiencing notable growth in tonnages to Dubai.

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

 

 

Flexport Ocean Timeliness Indicator

Ocean Timeliness Indicators for China to U.S. West Coast Decrease, While China to U.S. East Coast Increases.

Week to April 1, 2024

This week, the OTI for China to Northern Europe remained steady at 65 days due to carrier re-routings from the Suez Canal around the Cape of Good Hope. The OTI for China to the U.S. East Coast also remains elevated significantly to 62 days as some carriers route westward around Cape of Good Hope. Most have decided to use the Panama Canal despite continued slot restrictions. The OTI for China to the U.S. West Coast decreased to 36 days after a previous increase.

 

Trends to Watch

[Ocean – FEWB]

• For Asia-Europe trade, re-routing via Cape of Good Hope continues. Over the weekend, a Chinese-owned oil tanker called Huang Pu was attacked. Carriers are investigating the Indian Ocean status as well to determine if it’s safe for transport.
• Ocean Alliance (CMA CGM Group, COSCO Shipping, Evergreen, and OOCL) Day 8 Product Update effective April 2024:
  • Restructure of all Asia to North Europe loops via Good Hope.
  • Offering 6 loops from Asia to North Europe with the widest coverage and largest capacity on the trade.
  • Suspension of FAL7 loop and Pusan call on FAL1. Pusan, Nansha, Hong Kong, and Ho Chi Minh will continue to be served with a dedicated mainliner/feeder to connect with our 6 loops sailing to North Europe with improved frequency and reliability.
  • The Tangier call will be switched from FAL3 to FAL1. Dunkirk will become the first call on FAL3, offering the French customers best-in-class service with two direct fast services: FAL1 into Le Havre and FAL3 into Dunkirk.
  • New FAL1 rotation: Ningbo, Shanghai, Yantian, Singapore, Tangier, Le Havre, Hamburg, Gdansk, Rotterdam, Port Kelang, Ningbo.
  • New FAL3 rotation: Qingdao, Shanghai, Ningbo, Yantian, Singapore, Dunkirk, Rotterdam, Southampton, Antwerp, Le Havre, Algeciras, Singapore, Qingdao.
• Carriers are preparing to implement General Rate Increases (GRI) for April by $400-600 per FEU. While demand remains flat at the moment, more discussion is ongoing about current offerings and long-term deal finalizations, especially if the current Red Sea surcharges are upheld by carriers.
• For historical updates on the Red Sea situation, read more in Global Ocean Carriers Halt Red Sea Transits – What to Expect.

[Ocean – FEWB]

• Receiving for laden Exports at POL USBAL is closed until further notice.
• Contingency options for U.S. Exporters who would traditionally use USBAL:
  • If moving cargo to North Europe, use POLs NYC, PHL, and Norfolk.
  • If moving to the MED, Middle East, ISC, or Africa, use POLs NYC and Norfolk.
  • If moving to Asia and you want to route all water service, use POLs NYC and Norfolk.
  • If moving to Asia and you want to avoid USEC altogether, FTL and transload to a USWC port or CHI.

Please reach out to your account representative for details on any impacts to your shipments.

Francis Scott Key Bridge Collision and Collapse – What to Expect

At about 1:30 am ET on Tuesday, March 26, the Francis Scott Key Bridge in Baltimore, MD collapsed after being struck by a container ship. The ship, named DALI, is about 300-meters long and 94,000 tonnes. The vessel is operated on charter by Maersk on the 2M Alliance service between Asia and the US East Coast.

The DALI was traveling from Baltimore to Colombo, Sri Lanka when, according to local reports and videos, the ship lost power prior to hitting a structural pillar of the bridge. The bridge collapsed instantaneously. Local authorities are treating the situation as a mass casualty incident; our thoughts are with those impacted.

While it’s still early, we anticipate considerable downstream impacts to the Port of Baltimore, US East Coast ports, and regional rail and trucking networks.

Immediate Impact of Bridge Collision and Collapse
As of March 26, there were more than 40 ships, including cargo ships, currently inside the Port of Baltimore or on the Patapsco River west of the Francis Scott Key Bridge that were unable to leave the area. The impact to cargo depends on exactly where it is and the approach the Port of Baltimore takes in the evolving situation. Cargo already discharged from vessels should be able to be picked up from port. Cargo not yet discharged from vessels will likely experience discharge delays based on port operations. And cargo on trapped vessels that are planned to be unloaded at other East Coast ports will be subject to the direction taken by the vessel operator. There’s potential to redistribute the cargo to other ports via truck or rail, but this would require a coordinated effort from the vessel operators and the Port of Baltimore.

Container vessels with Baltimore in their rotation – 107, as of the incident – will likely head to surrounding ports like Norfolk or New York/New Jersey and discharge cargo there. Norfolk and New York/New Jersey are typical port calls for vessels that head to Baltimore, so while the direct vessel schedules should be able to adapt to the situation, the positioning of cargo on the vessels will likely cause discharge delays and importers will have to navigate different options such as long distance drayage or transloading to deliver the cargo to the final destination.

The collapse of the bridge implies that water access to the container terminals, along with various other terminals at the port in Baltimore, will be temporarily blocked.

Downstream Effects to Neighboring Ports
While the Port of Baltimore is one of the smaller ports by containerized freight volume on the US East Coast, handling roughly 800k TEUs in 2023, compared to neighboring ports like the Port of New York and New Jersey at 5.1 million TEUs in 2023 and the Port of Norfolk at 2.4 million TEUs in 2023, it’s an essential port with specialized infrastructure to handle bulk commodities in a major manufacturing corridor.

To put it into context, if the cargo originally destined for the Port of Baltimore is redistributed exclusively among the Ports of NY/NJ and Norfolk, throughput at these ports would increase by just under 10%. The moderate volume increase is less of a concern, as the bigger question is whether the truck and rail systems can quickly adapt to handle this sudden 10% surge in cargo volume.

A major unknown as of now is how long it will take for the waterway to be cleared and Port of Baltimore operations to return to normal. The resolution timeline will determine the magnitude of downstream impacts to port and inland operations on the East Coast.

The Takeaway
This is an evolving situation. It’s too early to tell how rates to the US East Coast could be impacted, if ocean carriers will establish temporary booking stops to Baltimore, or if shippers will elect to re-route to alternate US East Coast ports or even the US West Coast as point of entry. Flexport is in contact with all ocean carriers that call Baltimore and will continue to provide updates.

Before making changes to your shipments, such as electing to re-route cargo, reach out to your dedicated Flexport account manager to discuss all your options. Flexport can help you design a routing to balance cost and speed, based on the current advice for your trade lane.

North America Vessel Dwell Times

 

Source from Flexport.com