Trends to Watch

[Ocean – TPEB]

• Space tightness: Space availability on the West Coast, particularly in the Pacific Southwest, has improved due to additional loader capacity expected by the end of November. However, East and Gulf Coast rates remain stable as most service strings stay fully utilized through November.
• Rate trends: Floating rates on the West Coast remain manageable, while East Coast rates are holding steady. Carriers are beginning to focus on the upcoming General Rate Increase (GRI) for East Coast routes, with rates expected to adjust around December 1, pending final confirmation.
• Negotiation pressures: ILA negotiations and potential tariff actions remain the key sources of pressure on rates and capacity.
• Fixed rates and Peak Season Surcharges (PSSs): Fixed rates and PSSs are stable for the remainder of November.

[Ocean – FEWB]

• Space tightness: Space remains constrained in the second half of November due to blank sailings and a growing roll pool. Carriers have announced another GRI for December, with rates projected at $6,000–$6,200.
• Shanghai Containerized Freight Index (SCFI) trends: The SCFI dropped slightly by $29/TEU in Week 47, reflecting the extended FAK rates for 2H November. Another slight decline is expected before an increase aligned with December’s GRI.
• Equipment availability: While occasional equipment shortages persist at China’s main ports, the situation remains manageable. For shippers who need firm space on earlier estimated times of departure (ETDs) or specific service/transit times, premium options are available.

[Ocean – TAWB]

• Space constraints: Space remains tight in November and December across most carriers for both North and South Europe. New York remains the port in highest demand.
• Blank sailings: Planned blank sailings are expected in Weeks 47–52, primarily targeting the US Gulf and the US East Coast (USEC), with departures from both North Europe and the East Mediterranean.
• Equipment availability: Overall equipment availability looks good, with some shortages reported in Southern Germany.
• Rate trends: December rates are tracking in line with November trends.

[Air – Global]

• Capacity: Global air cargo capacity remained stable compared to the previous week, with no significant changes reported.
• Chargeable weight/tonnage: Worldwide chargeable weight flown in Week 45 was stable week-on-week (WoW), with small increases from Europe, Africa, and Central and South America (CSA) origins offset by decreases from North America and Middle East and South Asia (MESA) (both -4% WoW). Compared to last year, worldwide tonnages were up year-on-year (YoY) by just +2% in Week 45.
• Rates: Average global spot rates recorded a further +5% WoW rise in Week 45, taking them +24% above their levels at this time last year. Spot prices from the Asia-Pacific rose by +6% WoW to US$4.43 per kilo, Europe also exhibited a +6% WoW increase to $2.49 per kilo, and CSA rates rose by +10% to $2.04 per kilo. North America recorded a +5% increase to $1.83 per kilo, while Africa and MESA saw WoW falls of -4% and -2%, respectively.
• Year-on-year rate changes: Compared to the equivalent week last year, spot prices this year remain significantly elevated, notably from the Asia-Pacific (+25%), MESA (+70%), Europe (+14%), and CSA (+14%), with Africa also +10% higher and North America recording a +5% increase YoY.

Source: worldacd.com

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North America Vessel Dwell Times

 

 

 

This Week in News

American Companies Are Stocking Up to Get Ahead of Trump’s China Tariffs

Businesses are preparing for potential sweeping tariffs on Chinese goods under Donald Trump’s proposed trade policies, with some rushing to stockpile inventory and others seeking long-term alternatives to Chinese suppliers. This mirrors the response to the 2018 U.S.-China trade war, when companies front-loaded imports, leading to a temporary surge in Chinese exports. Despite some efforts to diversify supply chains to countries like Vietnam and Cambodia, China’s established infrastructure and competitive pricing remain unmatched, making full replacement challenging.

NVOs eager to get past carriers’ tight grip on unexpectedly favorable market

In 2024, ocean carriers tightened control over NVO contracts, demanding more spot cargo/freight-all-kinds (FAK) and closely monitoring compliance with named account contracts (NAC). This forced NVOs to secure more FAK cargo and adhere strictly to NAC terms. Looking ahead, increased vessel capacity in 2025 could ease pressure on NVOs as carriers compete to fill space. However, carriers are expected to maintain strict monitoring of contract compliance, leveraging technology to enforce terms regardless of market shifts.

How shippers can navigate West Coast rail congestion

A surge in container volumes on the U.S. West Coast, driven by peak season, strike mitigation efforts, and tariff concerns, is straining rail operations. Dwell times at the Port of Los Angeles have reached eight days, while Long Beach remains more fluid at four days. Rail operators like BNSF and Union Pacific are addressing congestion through staging yards and capacity expansion, but disruptions persist. Shippers are turning to costly alternatives like cross-docking, air freight, and trucking to bypass delays. Diversions to ports in Mexico, Canada, and the U.S. East Coast are also on the rise. Experts predict rail congestion may ease by Q1 2025, barring additional disruptions such as labor disputes.

Flexport Ocean Timeliness Indicator

This week, the Flexport OTI has decreased from China to the U.S. West Coast and China to Northern Europe, and remained stable from China to the U.S. East Coast.

Week to November 18, 2024

This week, the Ocean Timeliness Indicator (OTI) has decreased from China to the U.S. West Coast and from China to Northern Europe, moving from 40 to 38 days and 71 to 70.5 days, respectively. Meanwhile, the OTI from China to the U.S. East Coast has plateaued at 63 days.

 

Source from Flexport.com

Trends to Watch

[Labor Disputes Update]

• Canadian ports in Montreal and Vancouver are set to reopen after Canadian Labour Minister Steven MacKinnon took decisive action to end lockouts on November 12.
• Meanwhile, the British Columbia port workers union announced plans to challenge both the Canada Industrial Relations Board’s order to end the job action and the Minister’s forced arbitration. Read our blog to learn more.
• In the U.S., the ILA announced on Wednesday (November 13) that it broke off talks with USMX after Tuesday’s negotiations in New Jersey stalled over proposals concerning automation and semi-automation at ports. The two sides had aimed to reach an agreement on a new six-year master contract. Read more here.

[Ocean – TPEB]

• Volumes from Asia have remained strong through the first two weeks of November, driven partly by anticipated tariff increases and the potential ILA strike expected in early January, along with the early Lunar New Year in 2025. Rates continue to vary across routes between China and Southeast Asia, though we’re seeing increased pressure on routes to the U.S. West Coast.
• East Coast volumes are normalizing, but certain carriers and service routes are already fully booked or facing capacity constraints through November.
• Fixed rates and Peak Season Surcharges (PSS) have been steady in the first half of the month, though some PSS adjustments may occur given the highly volatile short-term market.

[Ocean – FEWB]

• Space will remain tight in the second half of November due to ongoing blank sailings and a continuously growing roll pool. With bookings being deferred to avoid arrivals during the Christmas and New Year holidays in Europe, the November GRI may not materialize, and carriers are instead preparing for a December GRI, projected at $3,900/$6,000/$6,000.
• In tandem with the anticipated rate increase, the SCFI rose by $100/TEU to $2,541/TEU for week 46. Another slight increase is expected in the coming week, with rates likely stabilizing or decreasing based on December GRI developments.
• Equipment shortages are occurring sporadically at major ports in China but remain manageable. For those needing firm space with earlier estimated times of departure (ETDs) or specific service and transit times, premium options are available.

[Ocean – TAWB]

• In Northern Europe, demand remains stable and strong. Most services to New York are fully booked, while there is more available capacity in the main Southeast ports. Rates have held steady through the second half of November.
• In the Western Mediterranean, carriers are overbooked, with utilization exceeding 100%. Most carriers successfully implemented rate increases in November and are now assessing the market for December adjustments.
• In the Eastern Mediterranean, capacity is tight due to high demand in recent months. However, the market remains highly competitive, with carriers reviewing rate increases to ensure alignment with market conditions.

[Air – Global] _Mon 28 Oct – Sun 03 Nov 2024 (Week 44)___:

• Global rate rise: In week 44 (28 Oct – 3 Nov), worldwide air cargo rates increased by +2% WoW to $2.71 per kilo, up +12% YoY. Asia-Pacific and Europe rates rose +2% WoW to $3.56 and $2.13 per kilo, respectively, with Africa rates up +3% to $1.98 per kilo. Rates in North America, CSA, and MESA stayed stable.
• Regional rate jumps: Spot rates from China to Europe increased +12% WoW to $4.68 per kilo, and Japan to Europe by +8% to $4.58 per kilo (+26% and +42% YoY). China to the USA reached $5.90 per kilo (+3% WoW), and MESA to Europe rose +4% to $3.29 per kilo—nearly double YoY.
• Capacity cuts drive rates: A -6% WoW capacity reduction from Europe raised load factors and westbound transatlantic rates, responding to reduced bellyhold capacity. Last year’s rates didn’t see this spike.
• Tonnage dips despite YoY growth: Week 44 tonnages were down WoW due to holidays, though up +5% YoY, with significant growth from the Asia-Pacific (+6%), North America (+6%), and MESA/CSA regions (+8%).

Source: worldacd.com

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North America Vessel Dwell Times

 

 

This Week in News

Flexport CEO Ryan Petersen Discusses Possible Tariffs Impact on Global Trade

Flexport CEO Ryan Petersen appeared on Bloomberg Surveillance to discuss the potential impact of President-Elect Trump’s win, including possible new tariffs, ongoing ILA-USMX negotiations, a potential port strike, global manufacturing shifts, and other key issues. Petersen commented, “We’ve seen this movie before,” as Trump reiterated his plan to raise tariffs in his next term.

U.S. retailers ramping up year-end imports ahead of strike, tariff threats

To prepare for a potential East and Gulf Coast dockworkers’ strike in January and high tariffs from President-Elect Trump, U.S. retailers plan to import 350,000 more TEUs than expected in November and December. Revised projections from the Global Port Tracker show November imports up 13.6% year-over-year, with December up 6.1%. Concerns over supply chain disruptions are prompting retailers to frontload merchandise before January.

The U.S. Air Force Strategy That Flexport Uses to Move Billions in Merchandise

When Ryan Petersen launched Flexport in 2013, he approached the problem from a customer’s perspective. Early in his career, he had worked at his brother’s import-export business, sourcing and selling ATVs, scooters, and dirt bikes from Asia to markets around the world. Today, Flexport’s technology moved over $32 billion’s worth of merchandise. Listen to the story here.

Flexport Ocean Timeliness Indicator

This week, the Flexport OTI has increased from China to the U.S. West Coast and China to Northern Europe, and decreased from China to the U.S. East Coast.

Week to November 11, 2024

This week, the Ocean Timeliness Indicator (OTI) has increased from China to the U.S. West Coast and from China to Northern Europe, moving from 38.5 to 40 days and 68.5 to 71 days, respectively. Meanwhile, the OTI decreased from China to the U.S. East Coast, falling from 64.5 to 63 days.

 

Trends to Watch

This week’s global logistics market update starts with a new era for America — As President-elect Donald Trump prepares to impose new tariffs on imports, learn what to expect under the new U.S. administration in 2025, what’s at stake for U.S. trade policies, and our advice for Flexport customers in our latest blog.

[Canada Operations]

• Labor disputes have halted operations at major Canadian ports, including those in British Columbia and the Port of Montreal.
• On November 4, the BC Maritime Employers Association (BCMEA) locked out over 700 members of the International Longshore and Warehouse Union (ILWU) Local 514.
• Meanwhile, nearly 1,200 dockworkers at the Port of Montreal, represented by CUPE Local 375, went on strike on October 31.
• Most cargo will not be diverted to the Canadian East Coast as Montreal terminals are also facing strike action impacting 40% of inbound volumes. We may see vessels shift around their port of destination string stops to prioritize U.S. West Coast ports first to try and wait out the BC lockout.
• Read our blog for the latest developments, and to learn more about the impact on various modes of transport across North America.

[Ocean – TPEB]

• Demand volume remains elevated post-Golden-Week and has now stabilized at a higher level.
• The East Coast continues to experience tighter space availability compared to the West Coast, with rates from China-based ports to the West Coast showing a decrease, while East Coast rates remain steady.
• Fixed rates and Peak Season Surcharges (PSS) remain unchanged as we move into the first half of November.

[Ocean – FEWB]

• The first half of November sees tight space availability due to blank sailings and roll pools carried over from late October. Void sailings will continue into the second half of November, with carriers planning a General Rate Increase (GRI) of $5,400-$5,500 per FEU for this period.
• Some shipments are being postponed to avoid arrivals during the Christmas and New Year holidays in Europe. Should it persist, this trend could significantly impact the GRI and market dynamics in the latter half of November.
• The Shanghai Containerized Freight Index (SCFI) rose by $215/TEU for week 45, reaching $2,442/TEU. Another increase is anticipated for week 46, reflecting the GRI for early November.
• While major Chinese ports have reported occasional equipment shortages, the situation remains manageable. For those requiring firm space with an earlier estimated time of departure (ETD) or specific service and transit times, premium options are still available.

[Ocean – TAWB]

• Demand in Northern Europe remains stable, with good utilization levels. However, some carriers are still seeking cargo for specific destinations. New York continues to be the top port in demand, with most carriers having overbooked vessels heading to this port.
• In the East Mediterranean, demand is stabilizing. Some carriers who implemented rate increases for November have either reduced or canceled them to align with market trends.
• In the West Mediterranean, demand is on the rise, with vessels fully utilized. Carriers have applied increases to floating rates for November.

[Air – Global] Mon Oct. 21 – Sun Oct. 27, 2024 (Week 43):

• Spot rate growth: Global air cargo spot rates experienced a +5% increase week-on-week (WoW) during the final week of October (week 43), driven by significant gains from key regions: Asia-Pacific (+3%), Europe (+7%), and Central and South America (CSA, +8%). The worldwide average spot rate reached US$2.93 per kilo, reflecting a +22% rise compared to last year. Combined spot and contract rates also climbed by +2% to US$2.67. Notable year-on-year (YoY) growth in spot rates included a +27% jump from the Asia-Pacific and a substantial +78% increase from the Middle East and South Asia (MESA), signaling strong demand and limited capacity in these markets.
• Tonnage patterns: Global air cargo tonnages remained relatively flat WoW, but were +4% higher than the same period last year, showing steady recovery after disruptions from China’s Golden Week. Preliminary October data shows a +7% YoY increase in tonnages. Though this is a solid rise, it falls short of the double-digit growth seen earlier in the year, partly due to a strong October 2023, which was driven by a surge in ecommerce.
• Regional market dynamics: Performance in the Asia-Pacific was mixed. While tonnages from the Asia-Pacific to Europe saw a slight +1% WoW rise in week 43, chargeable weight from China to Europe declined by -4% WoW, returning to levels seen in the same period last year. In contrast, Hong Kong to Europe tonnages were +29% higher YoY, despite a small -1% dip WoW. Taiwan (+32%) and Thailand (+30%) also posted strong growth in tonnages to Europe, reflecting robust demand across the region. Spot rates from Hong Kong to Europe rose to US$5.33 per kilo in week 43—their highest level this year, up +18% YoY, indicating sustained demand.
• Transpacific market trends: The transpacific market (Asia-Pacific to the USA) rebounded to pre-Golden-Week levels in week 43, except for China to USA routes, which remained weak. Tonnages from China to the USA were -20% below pre-Golden-Week levels and -19% lower than last year’s equivalent week, indicating softer demand from China. However, spot rates in the region increased significantly, with Asia-Pacific to USA rates averaging US$6.14 per kilo in week 43, up +39% YoY. China to USA spot rates also rose to US$5.13 per kilo, a +14% YoY increase, showing strong pricing despite lower volumes.

Source: worldacd.com

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North America Vessel Dwell Times

 

 

This Week in News

Trade Sector Eyes a New Wave of Tariffs Under Trump

Under a second Trump administration, new tariffs could reshape global supply chains and accelerate shifts away from China. Trump has proposed tariffs of 10-20% on all imports and 60% on Chinese goods, potentially raising prices for U.S. consumers. Flexport CEO Ryan Petersen noted that in the past, businesses have stockpiled goods ahead of tariffs, driving up shipping rates. While many companies are moving production to countries like Vietnam and Mexico, Petersen emphasized that China’s manufacturing capabilities remain hard to replicate, making it likely that many will continue sourcing from there despite tariffs.

Carriers revamp services amid port congestion in Mexico, Central America

Ocean carriers are experiencing major delays at ports in Mexico and Central America due to high trade volumes and congestion. In response, CMA CGM and Maersk are adjusting service routes and implementing surcharges to maintain reliability. Key ports like Acajutla, Corinto, and Manzanillo face severe delays, prompting carriers to reshuffle operations and revise transit times. Other carriers, including Hapag-Lloyd and ONE, also report disruptions, with reduced productivity and extended wait times impacting schedules.

U.S. Chip Toolmakers Move to Cut China From Supply Chains

The U.S. semiconductor industry is cutting ties with Chinese suppliers due to government directives aimed at limiting China’s role in critical technology. Major chip toolmakers like Applied Materials and Lam Research are urging vendors to find non-Chinese alternatives, which could raise costs. This move aligns with broader efforts by the U.S., Japan, and Europe to reduce dependency on China, while China is pushing out U.S. technology in response.

Flexport Ocean Timeliness Indicator

This week, the Flexport OTI has shown increases across all trade routes.

Week to November 4, 2024

This week, the Ocean Timeliness Indicator (OTI) has shown increases across the board: by one day for China to the U.S. West Coast, rising from 37.5 to 38.5 days, and by two days for China to North Europe and China to the U.S. East Coast, shooting up from 67 to 69 days and 62.5 to 64.5 days, respectively.

 

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]

• November is seeing a significant recovery in volumes following the post-Golden-Week lull. This is driven in part by a push from China due to anticipated tariff increases. Rates remain dispersed across routes between China and Southeast Asia.
• East Coast volumes are returning to normal levels, with some carriers and service routes already fully booked or experiencing capacity constraints through November.
• Fixed rates and Peak Season Surcharges (PSSs) are holding steady as we move into the first half of the month.

[Ocean – FEWB]

• Bookings are being pushed to avoid increased freight costs for later November departures, with vessels projected to be full and the roll pool prepared for overflow starting at the end of October.
• A 15-18% capacity cut is expected in November, with ten void sailings announced so far, which will continue impacting market supply.
• The first half of November GRI may settle around $4,400-4,500 per FEU, with carriers planning for a second-half November GRI at approximately $5,400 per FEU.
• The Shanghai Containerized Freight Index (SCFI) rose by $277 per TEU in week 44, and another increase is anticipated in week 45 to reflect GRI adjustments. With space growing increasingly limited, carriers will reintroduce premium services starting November 1 at $2,000 per container for shippers requiring confirmed space on earlier estimated times of departure (ETDs) or specific service transit times.

[Ocean – TAWB]

• Demand in North Europe remains steady, with the typical seasonal peak ahead of the Christmas holidays. Carrier utilization levels are strong, keeping rate levels stable across most services. Some carriers are re-evaluating the Peak Season Surcharge (PSS) applied in October due to the ILA strike.
• In the East Mediterranean, demand is also stable. Utilization is high on certain services, although some loops still face blank sailings due to service reliability issues.
• In the West Mediterranean, demand has increased, and with blank sailings contributing to full utilization, carriers have announced further rate increases for November, continuing the trend from September and October.

[Air – Global] Mon Oct. 14 – Sun Oct. 20, 2024 (Week 42):

• Hong Kong to Europe tonnages: Tonnages increased +25% YoY and +12% since September averages, with spot rates stabilizing above $5 per kilo, reflecting a +13% YoY increase.
• Asia-Pacific to Europe rates and tonnages: Tonnages from Thailand and Vietnam to Europe rose by +27% and +26% YoY, respectively. Spot rates jumped significantly, with Thailand up +87% YoY and Vietnam up +61% YoY.
• MESA to Europe decline: Tonnages from MESA to Europe dropped -8% 2Wo2W, and Dubai to Europe tonnages fell -22% WoW, influenced by geopolitical tensions. Rates to the USA fell from $5.02 to $4.69 per kilo, but are still up +80% YoY.
• China to USA decline: Despite a +4% WoW recovery in total Asia-Pacific-USA tonnages, China-USA tonnages remained down -18% YoY, partly due to tighter U.S. Customs checks. However, spot rates rose +3% WoW to $5.41 per kilo—up +10% YoY.

Source: worldacd.com

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North America Vessel Dwell Times

 

 

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North America Freight Market Update Live

Thursday, November 14 @ 9:00 am PT / 12:00 pm ET

This Week in News

Montreal dockworkers target MSC’s terminals for strike this week

A work stoppage at Montreal’s Maisonneuve and Viau marine terminals, both operated by Termont International, will commence Thursday, following a vote by Local 375 of the Canadian Union of Public Employees (CUPE) to authorize an indefinite strike. This action targets nearly half of the port’s container capacity, impacting over 1 million TEUs of Montreal’s 2.3 million TEUs in capacity. Termont urged shippers to retrieve cargo by Wednesday evening. The strike affects Mediterranean Shipping Co. (MSC) trans-Atlantic and north-south routes, including services from Italy, Mexico, and U.S. Gulf ports, with at least four MSC vessels scheduled to arrive at the impacted terminals.

Houthis Resume Attacks on Ships in Red Sea

Houthi rebels launched an attack on a Liberian-flagged container vessel, the Montaro, in the Red Sea on October 28, marking their first assault on shipping since a U.S. air strike on their bunkers earlier in October. Multiple explosions were reported near the ship as it traveled through the Red Sea Gulf of Aden strait, although no damage or injuries occurred. Houthis also claimed attacks on two other Liberian-flagged vessels in the Arabian Sea the same day, though these remain unverified. Based in Yemen, Houthi rebels have reportedly conducted nearly 100 maritime attacks in the region over the past year, resulting in two sunken ships and four crew fatalities.

Air freight demand largely unfazed by ILA port strike

The recent three-day strike by the International Longshoremen’s Association (ILA) at U.S. ports had a limited impact on air freight demand, as many companies had already taken steps to mitigate potential disruptions. However, experts warn that if a master contract agreement is not reached by January 15, 2025, a second potential strike could cause more significant disruptions to supply chains. They advise companies to monitor port backlogs, prepare alternate logistics options, and communicate with suppliers to manage potential disruptions and cost increases.

Flexport Ocean Timeliness Indicator

This week, OTIs from China to both the U.S. East and West Coasts have increased, while China to North Europe has decreased.

Week to October 28, 2024

This week, the Ocean Timeliness Indicator (OTI) has shown a small uptick for China to the U.S. West Coast, rising from 37 to 37.5 days—a return to the previous week’s figure. Meanwhile, China to North Europe fell further from 68 to 67 days, and China to the U.S. East Coast jumped from 59 to 62.5 days.

 

 

Source from Flexport.com

Trends to Watch

[Customs]

• The Canada Border Services Agency (CBSA) Assessment and Revenue Management (CARM) project, a digital platform to assess and pay duties and taxes on imported commercial goods, went live on Monday (October 21).

[Ocean – TPEB]

• Due to robust demand following Golden Week, carriers have announced a general rate increase (GRI) for Freight All Kinds (FAK) effective November 1, along with adjustments for the first half of the month.
• Floating rates have stabilized and are no longer trending downward for the second half of October.
• Demand returned sharply following Golden Week.
• Fixed rates and Peak Season Surcharges (PSSs) remain unchanged heading into the first half of November.

[Ocean – FEWB]

• Space is filling up in the second half of October due to the upcoming November general rate increase, coupled with capacity cuts from October blank sailings. As a result, bookings are being expedited to avoid higher freight costs for later departures.
• Ten services have blanked for November, resulting in a 15-18% reduction in capacity.
• The Shanghai Containerized Freight Index (SCFI) dropped $90 per TEU for week 43, reflecting the rates for the second half of October, but an increase is anticipated for weeks 44 and 45 once the GRI is successfully implemented and maintained.
• As space becomes limited, carriers will reintroduce premium services starting November 1, priced at $2,000 per container, for those requiring guaranteed space with earlier estimated times of departure (ETDs) or specific service and transit times.

[Ocean – TAWB]

• Demand in Northern Europe is stabilizing, as the backlog from the ILA strike has diminished. New York remains the only port experiencing high demand. Space is currently available, and carriers are extending their rate levels for November.
• In the West East Mediterranean, demand is increasing. Coupled with blank sailings in the region, carriers are achieving full vessel utilization, prompting GRIs and PSSs for November.
• In terms of equipment, there are no significant challenges in Northern and Southern Europe, except for certain areas in Central Europe and Southern Germany.

[Ocean – U.S. Exports]

• Volume surges for containerized rail movements through Los Angeles/Long Beach (LA/LB) in both directions are causing rail-dwell-related congestion at LA/LB rail operations, impacting U.S. export cargo scheduled to move from inland points via LA/LB.
• Currently, there are restrictions on the number of containers moving westbound from inland rail points to LA/LB. These restrictions are expected to last 7-10 days to allow the network to recover and return to regular performance levels.
• Customers exporting from the U.S. via LA/LB may experience longer transit times and delays.

[Air – Global] Mon Oct. 7 – Sun Oct. 13, 2024 (Week 41):

• China-USA Tonnages: In week 41, tonnages from China to the USA increased by just +1% week-on-week (WoW) after dropping -20% in week 40. Year-on-year (YoY), China-USA tonnages were down by -19%, marking the biggest YoY percentage drop this year, primarily driven by increased customs checks at LAX and Golden Week impacts.
• Worldwide & Asia Pacific Recovery: Global air cargo tonnages rose +2% WoW in week 41, placing them +8% above last year’s levels. Asia Pacific region recovered more strongly, rising +6% WoW after a -10% drop in week 40, bringing tonnages +12% higher than the same time last year.
• China-LAX Effect: China-LAX tonnages were down -39% YoY in week 41 due to both Golden Week and increased customs checks since July. When looking at September as a whole, China-LAX tonnages were down -19% YoY, while overall China-USA tonnages fell -8% YoY.
• Pricing Trends: Average worldwide rates remained stable at $2.58 per kilo, +12% YoY. Spot rates from China to the USA rose +8% WoW to $5.28 per kilo, rebounding from a previous -7% drop. Asia Pacific to USA spot rates increased +3% WoW to $6.11 per kilo, up +45% YoY.

Source: worldacd.com

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North America Vessel Dwell Times

 

 

 

This Week in News

Stability in Freight Markets Is Reviving Logistics Dealmaking — The Wall Street Journal

Mergers and acquisitions in the logistics sector are rebounding as market volatility from the pandemic subsides. After a two-year slowdown, companies are actively seeking purchases or considering sales, driven by stabilized valuations. Notable deals include DSV’s $12 billion acquisition of DB Schenker, and UPS’s sale of Coyote Logistics for over $1 billion.

Delay in Europe’s deforestation rule does not address key issues: Palm oil industry — Journal of Commerce

The European Union’s decision to delay the Deforestation Regulation (EUDR) by at least 12 months will not alleviate concerns for small farmers, particularly in the Southeast Asian palm oil industry. Experts argue that without amending traceability requirements to exempt smallholders, these farmers will remain barred from European markets. The delay, which pushes the implementation date for large companies from December 31, 2023, to December 30, 2025, and June 30, 2026, for small businesses, does not resolve concerns regarding the regulation’s traceability requirements, particularly for small-scale farmers.

Roaring volume has Port of Los Angeles eyeing $1 trillion in imports — FreightWaves

The Port of Los Angeles is experiencing unprecedented growth, with a record 954,706 TEUs handled in September, contributing to a total of 2.85 million TEUs in the third quarter—up 27% year-over-year. Driven by strong consumer spending and an early start to holiday imports, the port’s import value reached $990 billion for the quarter, with expectations of soon hitting $1 trillion.

Flexport Ocean Timeliness Indicator

OTIs have demonstrated a small decrease across the board, showing signs of stabilization at current levels.

Week to October 21, 2024

This week, the Ocean Timeliness Indicator (OTI) has shown small downward movements across the board. China to the U.S. West Coast went from 37.5 to 37 days, China to North Europe from 69 to 68 days, and China to the U.S. East Coast from 59.5 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

[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