Trends to Watch

[Ocean – TPEB]

• Ocean volumes have rebounded after Golden Week but overall demand in the market remains flat over the last month. The General Rate Increase (GRI) has been withdrawn, and ocean freight rates have been extended through the end of October, with some mitigation on specific lanes.
• Space is available to both the East Coast and West Coast, as the ILA strike impact has been mitigated. All related surcharges have been waived.
• Fixed rates remain in place, with Peak Season Surcharges (PSS) still applicable and expected to extend beyond Golden Week, subject to further changes.

[Ocean – FEWB]

• Carriers are preparing for a GRI in November. Recovery post-Golden Week has been slow, but bookings for weeks 43 and 44 are increasing as shippers look to avoid potential rate hikes. Space is filling up for the second half of October, following a 15% capacity cut due to blank sailings.
• Three alliances have already announced blank sailings for November, primarily due to vessel delays and efforts to balance supply and demand, preventing further market collapse.
• The Shanghai Containerized Freight Index (SCFI) fell by $210/TEU after the Golden Week holiday, but should the anticipated GRI be successfully implemented, it may stabilize and even increase in November.
• While the equipment shortage is improving overall, some ports of loading (POLs) that are less directly serviced still anticipate occasional equipment shortages due to rerouting and blank sailings.

[Ocean – TAWB]

• All carriers have postponed their disruption charges, given that the ILA strike has concluded. While carriers are still operating at full capacity on certain services, particularly to New York, delays and congestion are beginning to normalize. The backlog created during this period is currently estimated at 2-3 weeks.
• Some carriers have announced further rate increases for November, following increases in September and October. Equipment availability is generally not a challenge across Northern and Southern Europe, with the exception of Southern Germany and the Hinterlands.

[Air – Global] Mon 30 Sept. – Sun 06 Oct 2024 (Week 40):

• Spot rate increases: Global air cargo spot rates rose to US$2.84 per kilo, the highest in 2024, with a +1% week on week (WoW) increase from 30 September to 6 October. This was driven by rises in rates from the Asia-Pacific (+1% WoW), Africa (+2% WoW), and Central and South America (+5% WoW).
• Tonnage decline: Worldwide tonnages fell by -5% WoW, primarily due to a -7% drop in Asia-Pacific tonnages, linked to China’s Golden Week holidays. The Middle East and South Asia (MESA) (-9% WoW), Europe (-4% WoW), and North America (-3% WoW) also saw declines in origin tonnages.
• Intra-Asia-Pacific traffic impact: Intra-Asia-Pacific traffic fell by -14% WoW, mainly driven by a -21% drop in ex-China intra-Asia tonnages. This accounted for 68% of the Asia-Pacific’s -7% WoW decline, explaining 56% of the global tonnage decrease.
• MESA region performance: Despite a -9% WoW drop in MESA origin tonnages, the region’s air cargo volumes increased year on year (YoY) by +8%, and rates were up by +54% YoY. MESA was affected by regional ocean freight disruptions and flight diversions, with a -13% drop in volumes to North America being the biggest factor in the WoW decline.

Source: worldacd.com

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

North America Vessel Dwell Times

 

Trends to Watch

[Hurricane Milton Watch]

• The hurricane is expected to cause widespread flooding and destruction along the West Coast of Florida, particularly in the Tampa Bay area.
• While ports can generally withstand hurricane-force winds, there will likely be equipment damage, containers blown over, and destruction caused by storm surge and flooding.
• U.S. Gulf Coast ports will begin port assessments 24-48 hours after the storm passes. The Port of Tampa suspended all inbound and outbound vessel traffic on Tuesday, October 8.

[Customs]

• The Merchandise Processing Fee (MPF), imposed by U.S. Customs and Border Protection (CBP) on formal entries (goods whose monetary value exceeds $2,500, or commercial textile shipments (clothes/materials) regardless of value), increased on October 1. In particular, the minimum fee has increased from $31.67 to $32.71, the maximum fee has risen from $614.35 to $634.62, and the ad valorem rate remains unchanged at 0.3464%.
• Additionally, other fee increases can be found here.
• In Canada, the Canada Border Services Agency (CBSA)’s Assessment and Revenue Management (CARM) system will go live on Monday, October 21. There, importers can pay duties and other taxes to the CBSA.

[Ocean – TPEB]

• Demand remains flat following the resolution of the port strike. Market capacity continues to exceed demand, and a space crunch is not anticipated during the cleanup of backlog vessels at U.S. East and Gulf Coast ports.
• With the ILA strike suspended and container operations in motion again, ocean carriers have waived or canceled their East/Gulf Coast emergency congestion surcharges.
• Fixed rates and Peak Season Surcharges (PSS) will remain unchanged through the first half of October.

[Ocean – FEWB]

• Recovery has been slow since operations resumed after the Golden Week holiday, however, vessels are being reported as well-utilized by liners amid the announced blank sailings in the market.
• Floating rates have remained frozen for two weeks due to the Golden Week holidays, with expectations that liners will continue proactively reviewing rates to optimize vessel utilization.
• THE Alliance has already announced three void sailings for November, while 2M and Ocean Alliance are still evaluating their options. If recovery continues to lag and demand remains flat from the Far East to Europe, more void sailings may be introduced to better manage supply and demand and prevent further market collapse.
• Equipment shortages have largely been resolved, although some ports of loading (POLs) with fewer direct calls are still experiencing occasional shortages due to rerouting via the Cape of Good Hope (COGH).

[Ocean – TAWB]

• The ILA strike, which ended on October 4, is expected to have created a booking backlog of 2 to 3 weeks. The majority of carriers have canceled their disruption charges, since the strike has concluded. Additionally, the strike in Montreal has also ended, with operations returning to normal.
• Many clients have diverted their shipments to services via Canada or the U.S. West Coast to avoid delays and congestion that persist at U.S. East Coast and Gulf Coast ports.
• Carriers anticipate reduced capacity for October, but this is highly dependent on operations and delays at the main U.S. East Coast ports. There may also be a potential shortage of chassis and trucks. It’s advisable to review detention and demurrage (D&D) application rules by carrier.

[Ocean – U.S. Exports]

• Operations at ports and terminals affected by the ILA strike have resumed, leading to an anticipated surge in new bookings. This influx is likely to create a backlog that may persist through the end of October and into November.

[India Subcontinent and North America]

• The market continues to soften following the temporary resolution of labor disruptions on the U.S. East Coast. Ocean carriers had initially planned for rate increases to both the U.S. East Coast and U.S. West Coast during the latter half of October, but all these plans have now been canceled.
• As demand declines, capacity has opened up on both coasts, though the U.S. East Coast has significantly more available capacity than the U.S. West Coast.
• Additionally, ZIM has joined MSC in operating the INDUSA and INDUS EXPRESS services, which were previously standalone. These services focus on India to U.S. East Coast trades, where capacity is at an all-time high due to new vessel-sharing agreements and services launched since May.

[Air – Global] Mon 23 Sep – Sun 29 Sep 2024 (Week 39):

• Rates and demand surged in September as anticipation began to build for a strong peak season.
• Global demand rebounds (week-on-week, WoW): In the final week of September, global chargeable weight increased by +2% WoW, recovering from a -2% decline the previous week due to holidays. Tonnages in week 39 were approximately +10% higher than the same week last year, driven by significant recoveries in the Asia-Pacific (+6%), Central and South America (+4%), and the Middle East and South Asia (MESA, +2%).
• Rates increase (year-on-year, YoY): Average worldwide rates rose by +1% WoW to $2.61 per kilo, with a YoY increase of +10%. Global spot rates saw a +4% WoW rise, reaching $2.86 per kilo, which is +20% higher than last year’s levels. Notably, spot rates from the Asia-Pacific and MESA are up +26% and +86% YoY, respectively.
• Bangladesh market disruptions: Due to ongoing political and logistics challenges, Bangladesh-to-Europe tonnages dropped by -15% YoY in September, while spot rates remained high at $5.11 per kilo, marking a +138% YoY increase. Bangladesh to USA tonnages surged by +50% YoY, with spot rates consistently above $7 per kilo—more than three times last year’s levels.
• Third-quarter (Q3) growth: Q3 saw a +1% increase in worldwide chargeable weight compared to Q2, with an +11% YoY increase. Rates were also up by +1% QoQ, and +10% YoY, driven primarily by the Asia-Pacific and MESA markets, which are anticipated to remain pivotal as peak season demand rises in Q4.

Source: worldacd.com

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

North America Vessel Dwell Times

 

 

Webinars

North America Freight Market Update Live

(Today) Thursday, October 10 @ 9:00 am PT / 12:00 pm ET

Flexport Ocean Timeliness Indicator

OTIs from China to the U.S. West Coast, China to North Europe, and China to the U.S. East Coast have reached a plateau.

Week to October 7, 2024

This week, the Ocean Timeliness Indicator (OTIs) for China to the U.S. West Coast, China to North Europe, and China to the U.S. East Coast have not shown any movement. They remain at 37, 67, and 59.5 days, respectively, as U.S. port strikes have concluded for the time being.

 

 

Please direct questions about the Flexport OTI to press@flexport.com.

See the full report and read about our methodology here.

The contents of this report are made available for informational purposes only. Flexport does not guarantee, represent, or warrant any of the contents of this report because they are based on our current beliefs, expectations, and assumptions, about which there can be no assurance due to various anticipated and unanticipated events that may occur. Neither Flexport nor its advisors or affiliates shall be liable for any losses that arise in any way due to the reliance on the contents contained in this report.

 

Source from Flexport.com

Trends to Watch

[ILA Strike Watch]

• The International Longshoremen’s Association (ILA) has officially launched a coast-wide strike, shutting down major ports from Maine to Texas. Carriers have already started declaring force majeure for certain vessels.
• The ILA is seeking a $5-an-hour pay raise for each year of the new six-year contract, which would amount to a 77% pay increase over the new contract’s duration. The union is also firm in its opposition to automation.
• President Joe Biden released a statement on October 1, urging the USMX “to present a fair offer to the workers.”
• Get real-time updates on our live blog, and register for our upcoming webinar tomorrow (October 4) featuring CEO Ryan Petersen. He will discuss the latest developments on the ILA strike, its implications for global shipping and the U.S. economy, and strategies businesses can employ to swiftly adapt to this rapidly evolving situation.
• Flexport will continue to provide timely updates and work closely with our customers to minimize disruptions.

[Customs]

• U.S. Customs and Border Protection is continuing its normal operations.
• The CBP expects the trade community to comply with regulations despite the ongoing work stoppage and will process diversions as necessary due to cargo disruptions.
• To address issues related to the affected ports, CBP has also established an emergency operations command center in DC.
• For the latest alerts and updates, please refer to the CSMS page.
• CBP officials also recommend that trade members direct any specific inquiries to the Office of Trade Relations at tradeevents@cbp.dhs.gov.

[Ocean – TPEB]

• In response to the ILA strike, some beneficial cargo owners (BCOs) are shifting some of their volume to the U.S. West Coast (or via the U.S. West Coast) as a contingency plan. A few carriers are also considering implementing East Coast and Gulf Coast port surcharges for mid-October, should the ILA strike continue.
• Carriers have announced port congestion surcharges, detention and demurrage (D&D) indications, and terminal status updates post-Golden-Week. This could lead to further disruptions to operations, increased port congestion, and vessel deployment challenges for East Coast and Gulf Coast schedules. There may also be equipment shortages at origin, depending on the duration of the work stoppage.
• Floating rates have been extended to mid-October. Terminals have announced constraints on bookings to East Coast terminals via Los Angeles, leading to booking pauses by carriers.
• Fixed rates: Peak Season Surcharges (PSS) will remain unchanged through October, covering Golden Week.

[Ocean – FEWB]

• Demand is trending downward as China observes holidays, leading to increased vessel availability and carriers actively seeking cargo.
• Floating rates have continued to decrease in the first half of October. Spot pricing has remained steady for the past two weeks, influenced by the holiday slowdown. Carriers are now more proactive in adjusting rates to optimize vessel utilization.
• While equipment shortages are nearly resolved, some ports of loading (POLs) with fewer direct calls may still experience occasional shortages due to rerouting via the Cape of Good Hope.

[Ocean – TAWB]

• All carriers have announced disruption charges that will take effect if the work stoppage persists.
• Most carriers will implement these charges if the work stoppage continues through October 10, although Mediterranean Shipping Company (MSC) already implemented the charge on October 1st.
• Additionally, the Canadian Union of Public Employees (CUPE) Local 375 initiated a 72-hour strike at the Port of Montreal, which concluded on the morning of October 2nd. It impacted alternative routing through Canada.
• Meanwhile, U.S. West Coast services are continuing.

[Air – Global] Mon 16 Sep – Sun 22 Sep 2024 (Week 38):

• Global tonnage decline: In week 38 (16-22 September 2024), global air cargo tonnages dropped by -3% week on week (WoW), largely due to autumn festivals and national holidays in key markets such as China, South Korea, and Chile.
• The Asia-Pacific’s major impact: The Asia-Pacific region saw a -6% WoW decline in tonnages, responsible for 73% of the global drop. This was driven primarily by a -33% WoW decline from South Korea (50% of the region’s fall) and -6% WoW from China (30%), both impacted by mid-autumn festival holidays.
• Holidays in Central and South America: Central and South America (CSA) tonnages fell by -6% WoW, with Chile’s Independence Day holidays (18-20 September) driving a near -50% WoW drop in tonnages, contributing 12% to the global decline.
• Rates remain strong: Despite the tonnage drop, global rates stayed flat WoW, with notable increases from the Asia-Pacific (+1%) and the Middle East and South Asia (MESA, +4%). Spot rates from MESA surged +96% YoY, and Bangladesh-to-USA rates rose +213% YoY due to political and logistical challenges.

Source: worldacd.com

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

North America Vessel Dwell Times

 

Flexport Ocean Timeliness Indicator

OTIs from China to the U.S. West Coast and China to North Europe have dropped significantly, while China to the U.S. East Coast increased.

Week to September 30, 2024

This week, the Ocean Timeliness Indicator (OTI) for China to the U.S. West Coast and China to North Europe have dropped from 39 to 37 days and 70.5 to 67 days, respectively. Meanwhile, China to the U.S. East Coast has increased from 58 to 59.5 days, with port strikes possibly leading to further increases in the coming weeks.

 

 

Source from Flexport.com

 

 

Trends to Watch

[ILA Work Stoppage Watch]

• If the International Longshoremen’s Association (ILA), which represents 45,000 workers at U.S. East Coast and Gulf Coast container ports, and the United States Maritime Alliance (USMX), which represents the area’s longshore employers (including carriers, marine terminal operators, and port associations), fail to finalize a new master contract by the September 30 deadline, the union intends to proceed with a work stoppage on October 1.
• An ILA work stoppage could upend U.S. supply chains, and even lead to pandemic-level bottlenecks. Beyond strained U.S. West Coast ports (where many shipments will be rerouted), we could see chassis shortages, skyrocketing trucking and air freight rates, and a number of other dire outcomes.
• Please refer to our live blog for a comprehensive guide to the situation, including detailed guidance for Flexport customers. There, you’ll also find live updates from our experts. Flexport will continue to provide timely updates and work closely with our customers to take proactive action and plan ahead in the event of a potential ILA work stoppage.

[Ocean – TPEB]

• Ocean Network Express (ONE) recently announced a new Asia-Europe, Transpacific, and Asia-Middle East trade lane service line-up, slated to launch in February of 2025.
• Additionally, beginning in February 2025, ONE will cooperate closely with HMM and Yang Ming. Together, they will comprise the Premier Alliance.
• Floating rates continue to decrease, and will be extended until the end of September. The market is moving rates further, downtrending with promotional and bullet rates, which have been implemented by most carriers. Volume remains flat, as we did not see the typical pre-Golden-Week peak.
• In light of uncertainties surrounding the potential ILA work stoppage, some BCOs are shifting volumes from the East Coast to the West Coast where possible. We’re seeing East Coast rates decrease faster than West Coast rates.
• Blank sailings impact 22-28% of the capacity being pulled out for weeks 41 and 42 in October for Golden Week.

[Ocean – FEWB]

• Market trends have shifted, and spot rates are falling rapidly. The core challenge currently faced by carriers is the slowdown in demand. Although carriers have increased capacity through the Cape of Good Hope to address growing demand within Asia-Europe trade, it seems that demand has already reached its peak.
• Floating rates for 2H September dropped further, but remain on the higher side compared to early 2024. Carriers are being more proactive in adjusting rates to optimize vessel utilization. The Shanghai Containerized Freight Index (SCFI) dropped by almost $1000/TEU over the past 2 weeks.
• Long-term named account business continues to face carrier restrictions surrounding space and equipment priority. Depending on further market developments, carriers may be open again to negotiations.
• Equipment shortages are getting better, but some ports of loading (POLs) with fewer direct calls still foresee potential equipment shortages for certain container types, such as 20’GPs and 45’HCs. Weight restrictions, especially for overweight 20’GPs, are still pending acceptance per loading port policies and vessel size requirements.
• As part of its new product/service launch in February 2025, ONE—alongside fellow Premier Alliance members HMM and Yang Ming—will cooperate with MSC to improve service across Asia-Europe trade lanes.

[Ocean – TAWB]

• In the event of an ILA work stoppage, there is no guaranteed solution for maintaining 100% of volumes ex Europe to the U.S. East Coast. Carriers will try to offer services via Canada, but space/connections are limited and may not absorb all volume.
• Carriers are seeing good utilization for both Northern European and Mediterranean services. September increases have been implemented, and most carriers have already announced October increases.
• We’re expecting to see new networks from carriers on the TAWB in 2025. So far, MSC and the Gemini Cooperation have already made announcements regarding new ocean network options.
• Equipment deficits in certain areas of South/East Germany and the Hinterlands remain an issue. At German ports, there are no further work stoppages expected at the moment.
• To protect space/equipment, we recommend booking 2-3 weeks in advance.

[Air – Global] (Freight Update Mon 26 Aug – Sun 01 Sep 2024 (Week 35)

• Year-on-year growth: Worldwide air cargo demand in August 2024 exhibited a +10% increase in tonnage compared to the same period last year, with rates rising +12% year-on-year (YoY).
• August vs. July 2024 trends: Compared to July 2024, August saw a slight decline in chargeable weight (-2%), but a +1% rise in average yields to $2.49 per kilo. Prices from Asian-Pacific origins rose by +1%, reaching $3.26 per kilo, and Middle East & South Asia (MESA) rates increased by +3%, reaching $2.81 per kilo.
• Regional price increases: Rates from Asian-Pacific origins were +22% higher YoY at $3.26 per kilo, and MESA origins saw rates rise +58% YoY to $2.81 per kilo, despite a slight tonnage decline in August (-3% and -2%, respectively).
• Week-on-week trends (week 35): Overall tonnage in week 35 (26 August – 1 September) slipped by -1%, with a notable -4% WoW decrease from North America due to the Labor Day holiday. Rates in North America increased by +4%, while capacity fell by -5% WoW.
• Two-week-on-two-week (2Wo2W) changes: Combining weeks 34 and 35, tonnages and rates both rose +1%, driven largely by a +5% rebound in demand from the Asia-Pacific, with intra-Asian-Pacific volumes up +8%, primarily due to recovery from Japan, Hong Kong, and South Korea.

Source: worldacd.com

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

North America Vessel Dwell Times

 

 

Webinars

North America Freight Market Update Live

(Today) Thursday, September 12 @ 9:00 am PT / 12:00 pm ET

Navigating Peak Season: Essential Omnichannel & Fulfillment Strategies for Success

Tuesday, September 17 @ 9:00 am PT / 12:00 pm ET

Transforming Maritime Logistics: A Conversation Between Flexport CEO Ryan Petersen and Hapag-Lloyd CEO Rolf Habben Jansen

Thursday, September 19 @ 8:00 am PT / 11:00 am ET / 16:00 BST / 17:00 CEST

Navigating Peak Season: Expert Insights on Ocean and Air Shipping Trends

Wednesday, September 25 @ 10:00 am PT / 1:00 pm ET

Flexport Ocean Timeliness Indicator

The Ocean Timeliness Indicator has plateaued for China to the U.S. West Coast and China to Europe, and increased for China to the U.S. East Coast.

Week to September 9, 2024

This week, the Ocean Timeliness Indicator (OTI) for China to the U.S. West Coast and China to North Europe has plateaued at 38.5 and 69 days, respectively. Meanwhile, China to the U.S. East Coast has risen from 57.5 to 59 days.

 

 

Please direct questions about the Flexport OTI to press@flexport.com.

See the full report and read about our methodology here.

The contents of this report are made available for informational purposes only. Flexport does not guarantee, represent, or warrant any of the contents of this report because they are based on our current beliefs, expectations, and assumptions, about which there can be no assurance due to various anticipated and unanticipated events that may occur. Neither Flexport nor its advisors or affiliates shall be liable for any losses that arise in any way due to the reliance on the contents contained in this report.

 

Source from Flexport.com

Trends to Watch

[Customs]

• Last Friday, September 13, the Biden Administration issued an executive action that could deny de minimis treatment for all U.S. imports covered by Section 301, 201, and 232 tariffs (including a wide range of products originating from China).
• Businesses may see additional duty costs and increased documentation requirements for de minimis shipments as soon as (or even before) Black Friday.
• In the short term, businesses may be required to start providing HTS classifications down to the 10-digit level for all products. Check out our detailed guide to the de minimis executive action on our blog, where you’ll also find live updates.
• Additionally, last Friday, the U.S. Trade Representative (USTR) outlined final modifications to Section 301 tariffs imposed on certain products originating from China.
• Based on public comments on the agency’s preliminary announcement on May 14, there will be additional §301 duties on several categories of goods. See our blog update for a comprehensive breakdown of these tariffs—some of which will be implemented as soon as September 27, 2024.
• Flexport is committed to helping our clients stay on top of these changes. Please reach out to your customs rep at CustomsBD@flexport.com if you have any questions.

[ILA Work Stoppage Watch]

• The International Longshoremen’s Association (ILA)’s master contract with the United States Maritime Alliance (USMX) is set to expire on September 30. If they fail to finalize a new contract by then, the union intends to proceed with a work stoppage on October 1.
• An ILA work stoppage could upend U.S. supply chains, and even lead to pandemic-level bottlenecks. Beyond strained U.S. West Coast ports (where many shipments will be rerouted), we could see chassis shortages, skyrocketing trucking and air freight rates, and a number of other dire outcomes.
• See our live blog for a comprehensive guide to the situation, including detailed guidance for Flexport customers. There, you’ll also find live updates from our experts. Flexport will continue to provide timely updates and work closely with our customers to take proactive action and plan ahead in the event of a potential ILA work stoppage.

[Ocean – TPEB]

• As we approach Golden Week, we see no signs of an uptick in volume for the pre-Golden-Week rush.
• In response to a potential ILA work stoppage, we’re seeing some BCOs shift volume to the U.S. West Coast (or via the U.S. West Coast) as a contingency plan. A few carriers are looking at implementing East Coast / Gulf port surcharges for mid-October in the event of an ILA work stoppage.
• Should an ILA work stoppage occur, expect carrier-side surcharges, disruptions to operations, port congestion, and vessel deployment impacts for East Coast / Gulf Coast schedules and returns. Additionally, we may see potential equipment shortages at origin, depending on the duration of the potential work stoppage.
• Floating rates have been extended until the end of September, with some fine-tuning and further mitigation. East Coast / Gulf surcharges will possibly be implemented by carriers in October, depending on the potential ILA work stoppage post-Golden-Week.
• Fixed rates: Peak Season Surcharges (PSS) will remain unchanged until the end of September, and will extend into October (through Golden Week).

[Ocean – FEWB]

• Demand is trending downwards and becoming slack. Volume for the last week of September might pick up a bit, but we do not anticipate there to be any space issues.
• Floating rates for 2H September dropped further, but remain higher compared to early 2024. To optimize vessel utilization, carriers are being more proactive than before in adjusting rates. The SCFI dropped by another $618/TEU last week; over the last 3 weeks, the SCFI dropped from $4,400/TEU to $2,841/TEU.
• Long-term named account business still faces carrier restrictions on space and equipment priority. Carriers are gradually (but conservatively) becoming open to negotiations again.
• Equipment shortages are getting better, but some ports of loading (POLs) with fewer direct calls still foresee potential equipment shortages for certain container types, such as 20’GPs and 45’HCs. Weight restrictions, especially for overweight 20’GPs, are still pending acceptance per loading port policies and vessel size requirements.

[Ocean – TAWB]

• We’re approaching the 30th of September, when the ILA’s contract with the USMX is set to expire. In the absence of an agreement, a work stoppage may begin on October 1. Carriers have not announced a contingency plan.
• All carriers implemented increases in the first and second halves of September. They have announced similar increases for October.
• Carrier utilization looks good in all regions of Europe, plus the West Mediterranean and East Mediterranean.
• Equipment deficits in certain areas of South/East Germany and the Hinterlands remain an issue.
• We advise that you keep booking 2-3 weeks in advance to protect space/equipment.

[Ocean – U.S. Exports]

• Heading into October, rates are increasing on base port lanes involving the U.S. East Coast and U.S. Gulf Coast ports as POLs.
• Changing earliest return dates (ERDs) continue to result in operational challenges during the origin operations sequence.
• Service strings relying on feeder services to final ports of discharge (PODs) are losing capacity as appropriate vessels are being shifted to headhaul trades and congestion continues to deteriorate the repeat serviceability of the feeder lane.
• To ensure the smoothest loading experience, we recommend booking 2 weeks in advance for bookings loading at a coastal port, and 3-4+ weeks in advance for bookings loading at an inland rail point.

[Air – Global] Mon 02 Sep – Sun 08 Sep 2024 (Week 36):

• Q4 rates are creeping up amid NPIs, ILA negotiations, and the ongoing Red Sea crisis, adding to the anticipated seasonal spike in demand. eCommerce also remains a focal point, with the de minimis executive action expected to potentially impact the holiday season.
• Global air cargo rates: Average global spot rates rose +6% week-over-week (WoW) to $2.85 per kilo in week 36, with a +30% year-on-year (YoY) increase, driven by +41% from the Asia-Pacific and +101% from MESA.
• Global tonnage decline: Worldwide tonnages decreased -1% WoW, primarily due to a -12% drop in North American volumes linked to the Labor Day holidays in the U.S. and Canada.
• Asia-Pacific & Intra-Asia market: Intra-Asia-Pacific tonnages surged +11% (2Wo2W), with tonnages from the Asia-Pacific to Europe up +6%, contributing to a +9% rise in global chargeable weight and +15% higher average rates YoY.
• MESA spot rates: Spot rates from MESA to Europe rose +7% WoW (to $3.42 per kilo) and +116% YoY, including increases from Dubai (+8% WoW) and Bangladesh (+5% WoW).

Source: worldacd.com

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

North America Vessel Dwell Times

 

 

Webinars

Navigating the New Executive Action on De Minimis Imports

Click the link above to watch yesterday’s webinar on demand.

Navigating Peak Season: Expert Insights on Ocean and Air Shipping Trends

Wednesday, September 25 @ 10:00am PT / 1:00 pm ET

North America Freight Market Update Live

Thursday, October 10 @ 9:00 am PT / 12:00 pm ET

Flexport Ocean Timeliness Indicator

The Ocean Timeliness Indicator has shown some oscillations this week, with a slight uptick for China to the U.S. West Coast and China to Europe, and a small decrease for China to the U.S. East Coast.

Week to September 16, 2024

This week, the Ocean Timeliness Indicator (OTI) for China to the U.S. West Coast and China to North Europe demonstrated a slight uptick, rising from 38.5 to 39 days and 69 to 71 days, respectively. Meanwhile, China to the U.S. East Coast has fallen back to its earlier position from two weeks ago, dropping from 59 to 57.5 days.

 

 

Please direct questions about the Flexport OTI to press@flexport.com.

See the full report and read about our methodology here.

The contents of this report are made available for informational purposes only. Flexport does not guarantee, represent, or warrant any of the contents of this report because they are based on our current beliefs, expectations, and assumptions, about which there can be no assurance due to various anticipated and unanticipated events that may occur. Neither Flexport nor its advisors or affiliates shall be liable for any losses that arise in any way due to the reliance on the contents contained in this report.

 

Source from Flexport.com

Trends to Watch

[Customs]

• On September 13, the U.S. Trade Representative (USTR) outlined final modifications to Section 301 tariffs imposed on certain products originating from China.
• We have compiled a list of items subject to the new tariffs—some of which go into effect tomorrow (September 27, 2024). For a detailed breakdown of tariff updates, read our blog.
• Learn more about what’s changing, why it matters, and how these new rules could affect your holiday shipments and supply chain. Don’t miss our webinar for further insights.
• On September 13, the Biden administration issued an executive action introducing significant changes to the de minimis exemption for low-value shipments under $800. This shift could greatly impact U.S. businesses that rely on the $800 de minimis threshold for duty-free goods, particularly those benefiting from exemptions under Section 301, 201, and 232 tariffs.
• Businesses may see additional duty costs and increased documentation requirements for de minimis shipments before year-end.
• In the short term, businesses may be required to start providing HTS classifications down to the 10-digit level for all products. Check out our detailed guide to the de minimis executive action on our blog, where you’ll also find live updates.
• Reach out to our team of trade advisors at CustomsBD@flexport.com to understand how you can mitigate the risks.

[ILA Work Stoppage Watch]

• More U.S. East and Gulf Coast ports are extending their operating hours in anticipation of a potential ILA work stoppage on October 1 as part of their contingency plans.
• To help their customers navigate this looming supply chain disruptions caused by the impending work stoppage, more shipping companies have been actively advising their customers to implement contingency measures. For example, multiple carriers, including ONE, Hapag-Lloyd, and others have announced port omissions and cargo discharges at alternate ports along the U.S. East and Gulf coast. Additionally, bookings for export of Dangerous goods (DG) and Reefer cargo have also been restricted.
• Follow our live blog for real-time updates. Flexport will continue to provide timely updates and work closely with our customers to take proactive action and plan ahead in the event of a potential ILA work stoppage.

[Ocean – TPEB]

• Demand remains flat and continues its downtrend leading into and following Golden Week. Ocean freight rates are being extended until October 14 with further rate mitigations, particularly for the U.S. Southwest, East Coast, and Gulf Coast.
• In anticipation of a potential ILA work stoppage, some BCOs are shifting volumes to or through the U.S. West Coast as a contingency plan. A few carriers are considering implementing surcharges for East Coast and Gulf Coast ports by mid- to late October if the stoppage occurs.
• Should the ILA work stoppage materialize, expect carrier-imposed surcharges, operational disruptions, port congestion, and vessel deployment issues affecting East Coast and Gulf Coast schedules. There may also be equipment shortages at origin, depending on how long the stoppage lasts.
• Fixed rates: Peak Season Surcharges (PSS) will remain unchanged through September, and are expected to extend into October, covering the Golden Week period.

[Ocean – FEWB]

• Demand is trending downward, with vessels now open for bookings. Carriers are preparing roll pools ahead of China’s Golden Week.
• Floating rates have continued to decline in the second half of September, as easing demand takes hold. However, rates remain higher compared to early 2024 levels. Carriers are being more proactive in adjusting rates to optimize vessel utilization. The SCFI dropped by $591/TEU in August, and has fallen an additional $1,808/TEU so far in September.
• While carriers are cautiously reopening long-term named account business negotiations, they remain conservative in their approach.
• Equipment shortages are improving overall, though some ports of loading (POLs) with less frequent direct calls still face occasional shortages due to rerouting via the Cape of Good Hope (COGH).

[Ocean – TAWB]

• Carriers have announced General Rate Increases (GRIs), Rate Restoration Initiatives (RRIs), and Peak Season Surcharges (PSSs), effective October 1st.
• In response to the potential work stoppage on the U.S. East Coast, nearly all carriers have introduced disruption surcharges to cover the additional operational costs associated with the work stoppage. The estimated impact of a potential work stoppage:
• A 1-day strike could take 6 days to clear the backlog.
• A 1-week strike could require 1.5 to 2 months for recovery.
• A 2-week strike could result in a 4-month recovery period.
• No equipment shortages are reported in Southeast Europe (SEU).

[Air – Global] Mon 09 Sep – Sun 15 Sep 2024 (Week 37):

• Worldwide tonnage increase (week on week): Air cargo tonnages increased by +4% in week 37 (Sept. 9-15), driven by +5% growth from the Asia-Pacific, +6% from Central and South America, and a +10% rebound from North America, following Labor Day disruptions.
• Average worldwide rate increase (year on year): Average worldwide rates increased to $2.58 per kilo, up +14% YoY, and more than +50% above pre-Covid levels (September 2019). The Asia-Pacific and MESA regions saw increases of +24% and +56%, respectively, while North America and Europe experienced a decline of -7% YoY.
• Bangladesh to USA spot rates (4 weeks on 4 weeks): Spot rates from Bangladesh to the U.S. have soared to $7.49 per kilo in week 37, more than three times higher than the same period last year (+219%). Rates have remained above $7 per kilo for the past four weeks.
• Dubai to USA tonnage surge (4 weeks on 4 weeks): Tonnages from Dubai to the U.S. surged by around +50% over the past four weeks, with volumes now more than three times their levels last year (+275% in week 37).
• Japan to U.S. spot rate spike (3-month comparison): Spot rates from Japan to the U.S. reached $8.33 per kilo in week 37—their highest level this year—marking a +50% increase since mid-June levels, driven by disruptions from typhoons.

Source: worldacd.com

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

North America Vessel Dwell Times

 

 

Webinars

Flexport Customs: Duty Optimization Through Tariff Engineering and HTS Classification

Thursday, October 3 @ 9:00 am PT / 12:00 pm ET

North America Freight Market Update Live

Thursday, October 10 @ 9:00 am PT / 12:00 pm ET

Transforming Maritime Logistics: A Conversation Between Flexport CEO Ryan Petersen and Hapag-Lloyd CEO Rolf Habben Jansen

Available On Demand

Flexport Ocean Timeliness Indicator

Stabilization has been the key word for the past few weeks’ Ocean Timeliness Indicator, with minor to no oscillations across the board.

Week to September 23, 2024

This week, the Ocean Timeliness Indicator (OTI) for China to the U.S. West Coast has plateaued at 39 days. Meanwhile, China to North Europe showed a slight decrease, falling from 71 to 70.5 days. China to the U.S. East Coast also demonstrated a slight shift, rising from 57.5 to 58 days.

 

 

Please direct questions about the Flexport OTI to press@flexport.com.

See the full report and read about our methodology here.

The contents of this report are made available for informational purposes only. Flexport does not guarantee, represent, or warrant any of the contents of this report because they are based on our current beliefs, expectations, and assumptions, about which there can be no assurance due to various anticipated and unanticipated events that may occur. Neither Flexport nor its advisors or affiliates shall be liable for any losses that arise in any way due to the reliance on the contents contained in this report.

 

Source from Flexport.com

Trends to Watch

[Ocean – TPEB]

• Departures from Asia remain strong, largely supported by the addition of extra loader capacity to alleviate the backlog from the cargo rush between May and July. However, with clients reporting healthy inventory levels, demand may soften in the coming weeks. This is particularly likely as we observe structurally blank sailings due to Cape of Good Hope (COGH) routings and port congestion in Asia and North America. Adverse weather conditions around the COGH are expected to cause further delays and capacity challenges to the U.S. East Coast. On a positive note, water levels at Gatun Lake have recovered, allowing local authorities to ease weight restrictions for the Panama Canal.
• In preparation for the upcoming Golden Week holiday, carriers are implementing blank sailing plans that will impact Weeks 38 through 41 to adjust capacity on the TPEB route. This may lead to changes in sailing schedules or transit times, particularly for transshipment connections, as blank sailings could result in rollovers to the next available schedule.
• Floating rates: The September 1 General Rate Increase (GRI) was withdrawn by carriers Aug 31 As a result, rates from the end of August have been extended.
• Fixed rates: Discussions regarding the Peak Season Surcharge (PSS) remain unchanged at this time. However, if the floating market continues to soften, there may be movement in the fixed market.

[Ocean – FEWB]

• Demand is slowing, with more capacity available in September than in August. If demand remains steady, last-minute deployment adjustments may be necessary to balance demand and supply.
• Floating rates dropped further in the first half of September, but remain higher than in early 2024. Carriers are now being more proactive in adjusting rates to optimize vessel utilization, with the Shanghai Containerized Freight Index (SCFI) dropping by 12% in Week 36, marking the most significant change of 2024.
• Long-term named account business continues to face restrictions from carriers regarding space and equipment priority.
• While equipment shortages are improving, some ports of loading (POLs) with fewer direct calls still anticipate potential shortages for specific container types, such as 20’GPs and 45’HCs. Additionally, weight restrictions, especially for overweight 20’GP containers, are still pending acceptance based on the loading port’s policy and vessel size.

[Ocean – TAWB]

• Our main concern at this time is the potential work stoppage at U.S. East Coast and Gulf Coast ports. Although there has been no official announcement yet, the contracts are set to expire on September 30th.
• Carriers are maintaining high utilization rates for both Northern European and Mediterranean services, leading to rate increases in September, with a follow-up Peak Season Surcharge (PSS) expected in October.
• Schedule reliability has decreased due to delays at West Mediterranean ports.
• Equipment deficits continue to be an issue in certain areas of South and East Germany, as well as the Hinterlands. While no further work stoppages are anticipated at German ports, the equipment shortages remain a challenge.
• To ensure space and equipment availability, it remains advisable to book 2-3 weeks in advance.

[Air – Global]

• Week-on-week tonnage rebound: In week 34 (August 19-25, 2024), global air cargo tonnages increased by +5% compared to the previous week, with a notable +11% week-on-week (WoW) rise from the Asia-Pacific region, largely driven by a +91% WoW recovery in Japan following Typhoon Ampil.
• Regional tonnage contributions: The Asia-Pacific region’s recovery accounted for 40% of the global rebound, with major contributions from South Korea (+16% WoW), mainland China (+7% WoW), and Hong Kong (+3% WoW). Together, these regions contributed 30% to the global tonnage improvement.
• Year-on-year growth: Based on combined data from weeks 33 and 34, global air cargo tonnages increased by +9% year on year (YoY), with significant growth from the Asia-Pacific (+11%), the Middle East & South Asia (MESA, +10%), Europe (+8%), and Central and South America (+8%).
• Stable worldwide rates: Average worldwide air cargo rates remained stable at $2.51 per kilo, up +12% YoY. Rates saw significant increases from MESA (+59%) and the Asia-Pacific (+22%), while rates from Europe and North America decreased by -10% and -9% YoY, respectively.
• Bangladesh and MESA rate increases: Spot rates from MESA to Europe rose by +113% YoY, with rates from Bangladesh to Europe reaching $5.02 per kilo, a +161% YoY increase—the highest level this year. Spot rates from India and Sri Lanka to Europe also saw significant YoY increases of +145% and +106%, respectively.

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

North America Vessel Dwell Times

 

 

Flexport Ocean Timeliness Indicator

The Ocean Timeliness Indicator is on the rise for China to the U.S. West Coast, while China to the U.S. East Coast stabilizes and China to Europe decreases.

Week to September 2, 2024

This week, the Ocean Timeliness Indicator continues its ascent for China to the U.S. West Coast, rising from 37.5 to 39 days. Meanwhile, China to Northern Europe is on a downward trend, decreasing from 71.5 to 69.5 days. China to the U.S. East Coast has plateaued at 57.5 days, suggesting a potential increase in the coming weeks.

 

 

Source from Flexport.com

Trends to Watch

[Update on Canada Railroad Labor Negotiations]

• Canada’s two largest railways – Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) – have locked out more than 9,000 workers represented by the Teamsters labor union after contract negotiations broke down.
• This rail stoppage is the result of months of tense negotiations between the railways and 9,300 engineers, conductors, and yard workers. Despite last-minute efforts to reach a deal, talks broke down just before the midnight deadline, leading to the lockout.
• The consequences are huge. Canada’s railways move $1 billion worth of goods daily, and this stoppage could severely disrupt supply chains across North America. The ripple effects could hit industries ranging from agriculture to manufacturing, impacting both the U.S. and Canadian economies.

[Ocean – TPEB]

• Departed volumes remain strong, largely supported by additional extra loader capacity aimed at easing the backlog caused by the cargo rush from May to July. While clients currently report healthy inventory levels, we anticipate a potential softening in demand over the coming weeks. This could be impacted by structurally blank sailings resulting from Cape of Good Hope (COGH) routings and ongoing port congestion in Asia and North America. Adverse weather conditions around the COGH are expected to lead to further delays and capacity challenges for the U.S. East Coast (USEC).
• On a positive note, water levels at Gatun Lake have recovered, leading local authorities to ease weight restrictions for the Panama Canal.
• Floating rates: the General Rate Increase (GRI) announcement for the second half of August is facing downward pressure as some carriers begin to adjust FAK rates. Major shipping lines are holding off on immediate changes but are closely monitoring the situation, particularly in the face of looming work stoppages.
• Fixed rates: Peak Season Surcharge (PSS) discussions remain intense due to the rate gap between FAK and NAC, which currently does not support mitigations.

[Ocean – FEWB]

• Demand is stabilizing, with blank sailings and extra loaders at the same time for the end of August. Vessel utilization remains solid, while full capacity will return in September via THEA/2M. This may lead to vessel-filling challenges, should demand remain consistent with August levels.
• Floating rates have begun to decline in the second half of August—a pattern that will extend into early September—though they remain relatively high. Carriers are being more proactive in adjusting rates to better optimize capacity.
• For long-term named account business, carriers continue to restrict space and equipment availability as a priority measure.
• With the equipment shortage improving, some ports with fewer direct calls still anticipate potential shortages of specific container types, such as 20’GPs and 45’HCs.

[Ocean – TAWB]

• Some carriers have tried to increase rates from the Mediterranean for September. Ultimately, they’ve extended them due to the summer slack season, but will try again in October if demand strongly increases.
• Out of North Europe, carriers are pushing hard to increase FAK rates.
• Even though most factories are closed, demand remains stable due to last month’s capacity reduction.
• In general, there are no equipment shortages, except in some German inland depots.

[Ocean – U.S. Exports]

• Capacity from the U.S. to the Indian subcontinent and Middle Eastern ports has tightened, related to vessel omissions and blank sailings.
• Service strings relying on feeder services to final ports of discharge (PODs) are losing capacity as the appropriate vessels are being shifted to headhaul trades and congestion continues to deteriorate the repeat serviceability of the feeder lane.
• Challenges related to earliest return dates (ERDs) continue to persist for U.S. exporters.
• To ensure the smoothest loading experience, we recommend booking 2 weeks in advance for bookings loading at a coastal port, and 3-4+ weeks in advance for bookings loading at an inland rail point.

[Air – Global]

• Northern China’s market has started to pick up on both the FEWB and TPEB due to volume surges across ecommerce, Apple NPI, and other traditional air clients.
• Rates from Hong Kong / South China are stable so far, but we expect an increasingly constrained market in the weeks leading up to peak season.
  Volcanic activity in the Russian peninsula has led to cancellations and tightened capacity this week.
• Taiwan’s market remains congested. Direct space from Taiwan is expensive, but you can find cheaper options transiting via other Asia hubs (Korea, etc.).
• Vietnam’s market has temporarily declined due to heavy congestion associated with the summer holidays. Capacity will tighten again post-holidays (September).
• Capacity from the Indian subcontinent to North America and Europe remains constrained.
• Bangladesh’s operations have returned to normal. The local situation remains volatile, and there is a massive cargo backlog at origin.
• Capacity remains open and demand is stable from North American and European origins.
• Service was disrupted last week by natural disasters. Volcanic eruptions in Russia’s Kamchatka Peninsula have released ashes on flight routes, prompting a payload reduction for airlines from Asia to the U.S. and Europe. The situation is back to normal now. This is expected to occur again throughout Q4 2024, as the volcano is still active. A typhoon near Japan last week led to service failures and congestion for Japanese carriers. While more typhoons are anticipated in Asia during this peak season, their impacts are expected to remain localized.

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 plateaued for China to the U.S. West Coast, while China to the U.S. East Coast and China to Europe showed upticks.

Week to August 19, 2024

This week, the Ocean Timeliness Indicator showed a sudden uptick for both China to the U.S. East Coast and China to Northern Europe, increasing respectively from 58.5 to 60 days and 69.5 to 72.5 days. Meanwhile, China to the U.S. West Coast plateaued at 37.5 days.

Trends to Watch

[Canada Railroad Strikes]

• Nearly 10,000 Canadian rail workers represented by the Teamsters Union may strike early next week, pending a ruling by the Canada Industrial Relations Board (CIRB) on Friday, August 9.
• The dispute involved the Canadian National Railway Company (CN) and Canadian Pacific Kansas City Limited (CPKC), over issues related to working conditions, wages, and fatigue management.
• Canadian railways transported half of the country’s exports in 2022, totaling more than $276 billion dollars’ worth of goods, according to the Railway Association of Canada.
• A strike or lockout could greatly affect both imports and exports in Canada. Importers and exporters looking to get cargo moving will need to resort to other modes of transport to move their goods. The CIRB will determine what essential services, if any, will be required to move if a stoppage of work goes into effect.
• Significant impacts could be felt across many industries, including the agriculture sector, an industry that relies heavily on rail to transport goods.
• Moving goods within the country would be primarily supported by transloading, and trucking goods to final destinations. These solutions would be costly and time-consuming, however, and are not a long-term strategy for most importers. Both CN and CPKC are firmly committed to reaching a negotiated agreement that prevents any work stoppage.

[Ocean – TPEB]

• Volumes remain strong, exceeding last year’s numbers on the Transpacific route. We’re seeing structurally blank sailings due to Cape of Good Hope (COGH) routings and port congestion in Asia and North America. Due to weather conditions around the COGH, please expect further delays and capacity challenges en route to the U.S. East Coast (EC).
• Since extra loader (XL) space was injected into the Transpacific trade lane, we’ve seen less space pressure on the U.S. West Coast (WC), specifically the Pacific Southwest (PSW), from China’s main ports.
• A positive note: water levels at the Gatun Lake in Panama have recovered, and local authorities have softened the Panama Canal’s weight restrictions.
• Floating rates: Shipping lines have continued to decrease spot rates to the EC, WC, and the Gulf Coast to match supply and demand. A General Rate Increase (GRI) has been announced for the second half of August.
• Fixed rates: Peak Season Surcharge (PSS) discussions are very intense at the moment, as the gap between FAK and NAC rates do not support mitigations, specifically in light of a potential GRI in August.

[Ocean – FEWB]

• THE Alliance announced three more void plans for September due to vessel delays, continuously impacting available capacity in the market.
• Demand for the last week of August and early September has slowed down a bit, compared to the June and July market. Floating rates remain on the higher side, and with blank sailings in place, the outlook for space remains tight.
• Long-term named account business remains restricted by carriers for space and equipment priority.
• Equipment shortages have ceased a bit since May and June. For some port of loadings (POLs) with less direct calling, we still foresee potential equipment shortages for certain container types, such as 20’GPs.
• For urgent cargo with a target delivery date, we recommend selecting premium options as soon as possible for an earlier estimated time of departure (ETD) and space with higher equipment priority.

[Ocean – TAWB]

• The congestion in the Mediterranean and North Europe, along with schedule reliability issues and blank sailings, remains the same, leading to increased rates for September 1st.
• Equipment deficits in certain areas of South/East Germany and the Hinterlands remain an issue. At German ports, there are no further strikes expected so far.
• Of primary concern is the potential strike in the U.S.
• To ensure the smoothest loading experience, we recommend booking 1-2 weeks in advance for bookings ex North Europe, and 2-3 weeks in advance for bookings ex Mediterranean that are loading at a coastal port.

[Ocean – U.S. Exports]

• Capacity has tightened from the U.S. to the Indian subcontinent, Middle Eastern ports, and North European ports, related to vessel omissions and blank sailings. Service strings relying on feeder services to final ports of discharge (PODs) are losing capacity as the appropriate vessels are being shifted to headhaul trades and congestion continues to deteriorate the repeat serviceability of the feeder lanes.
• Continual changes to earliest return dates (ERDs) present ongoing challenges for U.S. exporters.
• To ensure the smoothest loading experience, we recommend booking 2 weeks in advance for bookings loading at a coastal port, and 3-4+ weeks in advance for bookings loading at an inland rail point.

[Air – Global] Air Freight Update Mon 22 July – Sun 28 July 2024 (Week 30)(Source: WorldACD)

• Worldwide tonnage stability and regional variations: Worldwide air cargo tonnages remained stable in the last week of July after a -2% decline the previous week, with an overall -5% decrease compared to the end of June. Tonnages from four of the six main world regions fell, with Central and South America seeing a -4% decline and the Asia-Pacific, North America, and Africa each experiencing a -1% drop. Meanwhile, Europe and MESA saw increases of +2% and +1%, respectively.
• Impact of Bangladesh disruptions: Between weeks 28 and 29, tonnages from Bangladesh to Europe fell by -29% due to political protests and internet blackouts. In week 30, they rebounded by +6%. Weeks 29 and 30 were both down by around -50% year-on-year (YoY).
• Year-on-year tonnage growth trends: Worldwide tonnages for week 30 exhibited a +6% YoY increase, which remains below the +12% average for the first half of 2024. Combined, weeks 29 and 30 demonstrated a +7% YoY increase, indicating a potential slowdown. Preliminary July estimates predict a YoY increase of +9% to +10%.
• Air cargo rates: Global rates fell slightly by -1% in week 30, but remained stable on a two-week basis (2Wo2W). Compared to last year, rates increased by +13% YoY, with significant rises from MESA (+55%) and the Asia-Pacific (+24%). Average worldwide rates are +45% higher than pre-COVID levels (July 2019).
• Significant regional rate increases: Spot rates from the Asia-Pacific to the U.S. decreased by -3% in week 30, but are still up +62% YoY. Rates from Singapore to the U.S. surpassed $9 per kilo—more than double last year’s levels. Rates from MESA to Europe have more than doubled YoY, with Bangladesh, Sri Lanka, India, and Dubai seeing some of the highest increases due to strong demand and limited capacity.

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 maintain downward trends for China to the U.S. West Coast and China to the U.S. East Coast, and remain stable for China to Europe.

Week to August 5, 2024

This week, the Ocean Timeliness Indicator for China to the U.S. East Coast and China to the U.S. West Coast have accelerated their downward trends for the third week in a row, falling from 60.5 to 58 days and 39.5 to 38 days, respectively, due to extended COGH transit times and existing port congestion across Asia and the U.S. Meanwhile, the OTI for China to Northern Europe has remained stable for the past two weeks, at 68 days.

 

 

Source from Flexport.com

 

Trends to Watch

[Ocean – TPEB]

• Volumes remain strong, exceeding last year’s numbers on Transpacific routes. We’re seeing structurally blank sailings due to Cape of Good Hope (COGH) routings and port congestion in Asia and North America. Due to bad weather conditions around the COGH, please expect further delays and capacity challenges en route to the U.S. East Coast (EC). Since extra loader (XL) space was injected into the Transpacific trade lane, we’ve seen less space pressure on the U.S. West Coast (WC), specifically the Pacific Southwest (PSW), from China’s main ports.
• Floating rates: Shipping lines have started to reduce rates for the EC and WC to match supply and demand. We’ve seen shipping lines try to stabilize rates for the second half of August by introducing an early General Rate Increase (GRI) announcement.
• Fixed rates: Peak Season Surcharge (PSS) discussions are very intense at the moment, as the gap between FAK rates and NAC rates do not support mitigations, specifically in light of a potential GRI in August.

[Ocean – FEWB]

• Port congestion in Asia is improving, but overall on-time performance for Asia-Europe trade remains suboptimal due to reroutings via the Cape of Good Hope. Blank sailings will continue in August. A few extra loaders have been injected into the FEWB to compensate for downsized vessels, and to maintain schedule reliability.
• Demand is strong, and floating rates remain on the higher end. The Shanghai Containerized Freight Index (SCFI) dropped slightly over the past two weeks. With blank sailings in place, we’re expecting the floating market to remain critical.
• Long-term named account space remains limited and restricted by carriers for space and equipment priority.
• Equipment shortages have improved a bit since May and June. For some Port of Loadings (POLs) with less direct calling, we still foresee potential equipment shortages for certain container types, such as 20’GPs.
• Port congestion in Netherlands/Belgium, coupled with on-and-off strikes in Germany and France, has impacted terminal operations and last-mile deliveries. We recommend closely monitoring container movements.
• For urgent cargo with a target delivery date, we recommend selecting premium options as early as possible for an earlier estimated time of departure (ETD) and space with higher equipment priority.

[Ocean – TAWB]

• North Europe: Carriers have begun noticing the effects of reduced capacity due to full vessels. Demand remains stable, and some factories on the Northwest of the continent are closed for the months of July and August.
• Congestion in the Mediterranean region remains, with an average wait time of 4-7 days outside of the main ports of Italy and Spain. Also, strikes at ports in Southern Italy have exerted more pressure on certain services. The effects are now being felt in the East Mediterranean, where rates are increasing.
• North Europe: Yang Ming Line announced a GRI for the 1st of September. Mediterranean Shipping Company and Ocean Network Express are considering applying for a PSS in September. The intention is to stop rate deterioration.
• Mediterranean: Carriers already increased their rates for August. No news about new increases in September.
• We expect to see signs of the usual slack season in August starting next week.

[Ocean U.S. Exports]

• Capacity from the Southeastern U.S. has tightened routes to the Indian subcontinent, Middle Eastern ports, and North European ports, amid vessel omissions and blank sailings.
• Service strings relying on feeder services to final Port of Discharge (POD) are losing capacity as appropriate vessels are being shifted to headhaul trades and congestion continues to deteriorate the repeat serviceability of the feeder lane.
• Challenges related to earliest return dates (ERDs) continue to persist for U.S. exporters.
• To ensure the smoothest loading experience, we recommend booking two weeks in advance for bookings loading at a coastal port, and 3-4+ weeks in advance for bookings loading at an inland rail point.

[Indian Subcontinent to North America Update]

• Rates continue to increase due to capacity constraints. Structural and unexpected blank sailings, increased transit time around the COGH, and rising demand have caused freight rates to surge into 2H July. Rates are expected to continue climbing into August, as yet-to-deploy capacity faces delays around the COGH.
• Large rollover pools have added further stress to upcoming sailings. Due to changing vessel sizes and an over-acceptance of bookings on each vessel, ocean carriers are being forced to roll cargo onto the next available sailing—not only delaying your shipments, but also taking away capacity for net-new bookings. As a result, some carriers have temporarily paused bookings to normalize loadings.
• These impacts are being felt differently across service providers, with many smaller providers being forced to use spot market booking platforms. (This means that their allotted space has been removed from the vessel plan in the short term.) These freight providers will now have to pay the market rate of over $10,000 per 40-foot container to obtain space.
• New India America Express (INDAMEX) services are expected to bring relief. Both HPL and CMA are launching their own standalone services to support Northwest India and Pakistan. These services will also temporarily support Colombo loadings on the first few sailings to clear accumulated backlogs in Sri Lanka. We can expect space to open up as these carriers, including their co-loaders OOCL and COSCO, will now have greater capacity than in 2023.
• India port issues: Two top ports, Nhava Sheva and Mundra, are facing terminal congestion issues due to heavy rainfall in Mundra, increased volume, and sliding/bunched sailing schedules. Carriers have resorted to early vessel gate closures to properly manage yard utilization and vessel loadings.
• Bangladesh backlog: Due to political protests in Bangladesh, there is a substantial backlog accumulating in the country. Vessels continue to work through this backlog, which is expected to further exacerbate ongoing congestion issues in Colombo, Sri Lanka. This is because over 50% of all cargo coming out of Bangladesh requires a transhipment in Colombo.

[Air – Global] (Source: WorldACD)

• Global rate increases amid declining tonnages: Average global air cargo rates rose by +2% in the third week of July 2024 to $2.56 per kilo, despite a third consecutive week of worldwide tonnage declines. This rate is +14% higher than the same week last year, and +47% higher than pre-COVID levels in July 2019.
• Asia-Pacific rate surge: Spot rates from Asian-Pacific origins increased by +2% to $3.34 per kilo in week 29 (July 15-21), marking a +25% increase compared to the same week last year. The rate hike was driven by a +2% rise in average prices, despite a -2% week-on-week tonnage drop.
• Demand and rate dynamics to the U.S.: Rates from the Asia-Pacific to the U.S. increased by +5% in week 29, with average spot prices exceeding $6 per kilo ($6.01), a +67% YoY rise. Chargeable weight from the Asia-Pacific to the U.S. rose by +2% WoW and +8% YoY, although tonnages from China to the U.S. fell by -8% YoY.
• MESA to Europe trends: Demand from MESA origins to Europe, while still +15% higher than the same period last year, has cooled from the +30% to +50% levels we saw earlier in the year. Average spot rates from MESA to Europe in week 29 were $3.30 per kilo—more than double (+126%) their levels last year, with significant increases from Bangladesh (+178%), India (+161%), and Sri Lanka (+78%).

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 exhibit a downward trend for China to the U.S. West Coast, China to Europe, and China to the U.S. East Coast.

Week to July 29, 2024

This week, the Ocean Timeliness Indicator for China to the U.S. East Coast and China to the U.S. West Coast have decreased, falling from 61 to 60.5 days and 40.5 to 39.5 days, respectively. The OTI for China to Northern Europe also decreased, dropping from 69.5 days to 68 days. The reason? Port congestion on all trade lanes is slightly improving.

 

Source from Flexport.com