Ocean Freight:
Asia – North America
Ocean shipping in 2024 has been fraught with unpredictability as geopolitical tensions, labour negotiations, and climate change continue to put pressure on global supply chains. Port congestion continues to be a concern at many ports worldwide, such as Ningbo, China, where a massive container explosion on August 9th shut down the port’s Phase III terminal for over 60 hours. The port of Chittagong in Bangladesh has resumed operations after political unrest led to transportation and manufacturing closures. Canada’s rail providers, CN and CPKC, are set to strike on August 22nd, unless an agreement is reached, and on October 1st, there is potential for a US East and Gulf Coast port strike. The combination of these factors makes it difficult to predict where the market is heading.
Opinions are divided on the duration of these issues. In September, rates from Asia normally increase with the traditional peak before China’s Golden Week (October 1-7). Some analysts predict rates will slowly decrease at the end of peak season (November/December), and some advise that we will not see any major rate reductions until after the Lunar New Year (end of January 2025). One global analyst warned that volatility would be a mainstay extending beyond the Lunar New Year period and that a reshuffling in the carrier alliances would continue to result in capacity limitations.
Europe – North America
Congestion at some of Northern Europe’s major container ports has worsened in the last few weeks, with carriers omitting port calls to retain schedule integrity. Since Q2 of 2024, we have been seeing a change in contract management with the steamship lines for the European to North America and Canada lanes. Steamship lines normally offer quarterly validity for European contracts, however, since Q2, some steamship lines have started to offer shorter validity of 2 months or less. As the market is staying strong, it seems they are gauging to find the right time to implement the Peak Season Surcharge (PSS). Carriers such as Hapag-Lloyd and MSC already announced early implementation of PSS effective September 1st – between $800.00 – $1,000 USD for dry containers and other carriers will follow suit.
Air Freight:
Some analysts are concerned that an East Coast port strike in the U.S. could lead to renewed disruptions and increased pressure on rates for ocean freight, as well as an increase in demand for air cargo out of Asia. Currently, e-commerce volumes are already keeping capacity tight and rates elevated during what is normally a slow season for air freight. In this type of market, space is the main concern, rates are secondary. Air freight from Europe has been fairly stable rate and space-wise, with Charles De Gaulle airport in Paris, France starting to recover from the backlog caused by the Olympics.
For more information, please contact Debbie McGuire, Director – Freight Solutions, or Cathy Fong, Director – Freight Pricing.
