November 14, 2024, freight market updates, featuring key insights and trends from the US, Turkey, China, and other global regions in cargo and shipping.

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From the Editor’s Desk

<ul style="margin-bottom:0;margin-top:0;padding-inline-start:48px;"><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Container shipping may experience potential overcapacity, according to market outlook assessments.</li><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">S&amp;P Global reports that carriers project a 9% growth in capacity, while cargo volume is expected to rise by only 3% in 2025.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Drewry projects container shipping profits in 2024 could reach $50 billion, providing carriers with financial resilience for an unpredictable 2025.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">In September, global schedule reliability dropped to 51.4%, marking the lowest level in 24 months.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">This represents a 1.2 percentage point decline, with reliability staying between 50% and 55% throughout 2024 but trending downward since May.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">None of the top 13 carriers showed year-over-year improvements, and the average delay for late arrivals increased by 0.21 days to 5.67 days.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Port congestion is most severe in Asia, especially at ports in China, Singapore, Hong Kong, and Korea, according to Linerlytica.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">The world’s top 20 airports handle approximately 42% of global cargo volumes, despite a -3.2% year-over-year decline, as reported by ACI World.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">In 2023, global air cargo volumes dropped by -1.8% to 115 million tonnes, yet the leading airports maintained their rankings.</li></ul>Read on for more in-depth updates.

Key takeaways for the US

Ocean Freight Market Updates

Freight market update - 14 November 2024

November 7, 2024, freight market updates, featuring key insights and trends from the US, Turkey, China, and other global regions in cargo and shipping.

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<ul style="margin-bottom:0;margin-top:0;padding-inline-start:48px;"><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Global maritime trade increased by 2.4% in 2023, reaching a total of 12.3 billion tons.</li><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">According to the United Nations Trade and Development (UNCTAD) Review of Maritime Transport 2024, shipping volumes are projected to grow by 2% in 2024.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">On October 22, approximately 60,000 port workers in Brazil went on strike for 12 hours, with 20,000 striking at Santos port, to protest new labor laws.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Spot rates for cargo from East Coast South America to the U.S. Gulf Coast has surged to $5,800 per FEU, marking a 250% increase from October last year.</li><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Airlines are increasing capacity on Asia Pacific-North America routes as disruptions from China’s Golden Week subside and preparations for the Christmas rush begin.</li><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">The U.S. National Retail Federation (NRF) forecasts a 2.5% to 3.5% growth in holiday spending compared to last year.</li><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Cathay Pacific reported an 11% year-on-year increase in September volumes, driven by demand for e-commerce, electronics, and perishables.</li></ul>Read on for more in-depth updates.

Freight market update - 7 November 2024

October 17, 2024, freight market updates, featuring key insights and trends from the US, Turkey, China, and other global regions in cargo and shipping.

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<ul style="margin-bottom:0;margin-top:0;padding-inline-start:48px;"><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Tim Power, MD of Drewry Shipping Consultants, addressed delegates at the World Ports Conference in Hamburg about the potential severe impact of new decarbonization regulations on deep-sea shipping sectors.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Global shipping experienced a 17.2% increase in TEU-mile demand in 2024 due to vessel diversions around the Cape of Good Hope, according to Xeneta.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">To mitigate longer transit times, the global fleet is expected to expand by 4.5% in 2025, although this is a slower growth rate than in 2024.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Ocean freight costs have surged by 241% from the Far East to the U.S. West Coast, 148% to Europe, and 112% to the Mediterranean compared to pre-Red Sea rates.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Xeneta’s Senior Shipping Analyst, Emily Stausbøll, expects vessel diversions around Africa to persist into 2025 due to the lack of a political resolution, creating market volatility.</li><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">A three-day strike at U.S. East and Gulf Coast ports is expected to worsen existing European port congestion and significantly reduce Trans-Atlantic shipping capacity in October, according to Sea-Intelligence.</li><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Capacity on the Mediterranean-U.S. East Coast routes could decrease by -10% in the week of October 21, with potential for a -24% drop if congestion worsens further.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">The ILA has suspended strikes, providing temporary relief to shippers.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">A tentative agreement on wages has been reached, extending the current contract until January 15, 2025, allowing the ILA and the US Maritime Alliance to address unresolved issues, particularly concerning port automation.</li></ul>Read on for more in-depth updates.

Freight market update - 17 October 2024

October 3, 2024, freight market updates, featuring key insights and trends from the US, Turkey, China, and other global regions in cargo and shipping.

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<ul style="margin-bottom:0;margin-top:0;padding-inline-start:48px;"><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">The potential strike by East and Gulf Coast port workers is already impacting U.S. trucking networks.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Several major U.S. East and Gulf ports are implementing contingency plans ahead of a possible dockworkers' strike on October 1.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">The Port of Virginia has announced its shutdown schedule for September 30.</li><li style="background-color:transparent;color:#0e101a;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">In August alone, $194 billion worth of goods passed through U.S. ports, with over 50.6% handled by East and Gulf Coast ports.</li><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Multiple ports in China, South Korea, and Taiwan faced closures due to strong winds and Typhoon PULASAN.</li><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Rates from India and Bangladesh have slightly decreased, but capacity constraints persist due to congestion at transshipment hubs like Singapore.</li><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">A small pre-Christmas peak is anticipated from India, before the main peak season starts in January, coinciding with the grape harvest.</li></ul>Read on for more in-depth updates.

Freight market update - 3 October 2024

September 26, 2024, freight market updates, featuring key insights and trends from the US, Turkey, China, and other global regions in cargo and shipping.

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<ul style="margin-bottom:0;margin-top:0;padding-inline-start:48px;"><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">If the International Longshoremen’s Association (ILA) halts operations at all East and Gulf Coast ports, the effects on global trade could be far-reaching.</li><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">This would be the first ILA strike since 1977, and its consequences may impact more than just the U.S. East Coast.</li><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Space remains limited ahead of the Chinese National Holiday (Oct 1-7).</li><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Last week’s typhoon caused flight cancellations and reduced payloads, creating a backlog at PVG.</li><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">The impending ILA strike on October 1st presents a major risk to East and Gulf Coast ports, with carriers considering potential surcharges to offset rerouting and additional costs.</li><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">Rates from India and Bangladesh have decreased slightly, but capacity constraints persist due to congestion at transshipment hubs like Singapore and Colombo.</li><li style="background-color:transparent;color:#000000;font-family:Georgia,serif;font-size:12pt;font-style:normal;font-variant:normal;font-weight:400;list-style-type:disc;text-decoration:none;vertical-align:baseline;white-space:pre;" dir="ltr" aria-level="1">A small pre-Christmas peak is anticipated from India, with the main peak season starting in January, aligning with the grape harvest.</li></ul>Read on for more in-depth updates.

Freight market update - 26 September 2024

September 26, 2024: US Port Strike Updates
Featuring key insights and trends related to the potential port strikes on the US East and Gulf Coasts, and their expected impact on shipping, freight logistics, and supply chain operations. Explore contingency plans, alternative shipping routes, and how businesses are preparing for possible disruptions.

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Greetings!With the potential U.S. East Coast and Gulf Coast port strike looming on October 1st, 2024, the impact on global supply chains could be significant. Whether you're a logistics company, freight forwarder, or business reliant on imports and exports, it's crucial to be prepared for the disruptions this strike may cause. Here’s a simple guide to understanding what’s at stake and how you can mitigate risks to your supply chain.

The International Longshoremen's Association (ILA), responsible for dockwork at major East and Gulf Coast ports, is negotiating with the United States Maritime Alliance (USMX) for a new master contract. If no agreement is reached by October 1st, 2024, a strike is likely, potentially halting operations at major ports such as:<ul><li>New York/New Jersey</li><li>Savannah</li><li>Charleston</li><li>Houston</li><li>Miami</li><li>Port Everglades</li></ul>

What’s Happening?

Ports are critical to the U.S. economy, acting as vital gateways for imports and exports. If port workers strike, we face significant delays and higher costs across multiple sectors. Unlike supply chain issues caused by demand spikes (such as during the COVID-19 pandemic), this disruption is caused by reduced port capacity—a more serious and long-lasting issue that can affect not just your current shipments but future supply flows.<h3>Key Impacts of the Strike:</h3><ol><li>Delays in Import/Export Operations: With major ports shutting down, goods won't move in or out, causing severe backlog.</li><li>Congestion at Other Ports: As businesses redirect their shipments to West Coast or Canadian ports, these alternative routes may quickly become overwhelmed.</li><li>Price Hikes: With limited shipping capacity, the cost of transportation will likely surge. Surcharges like the recently announced Maersk Port Disruption Surcharge will add to operational costs.</li><li>Demurrage and Detention Charges: Cargo sitting idle at terminals during the strike will lead to increased storage costs, exacerbating financial pressures.</li></ol>

Why Does This Matter?

Here are some proactive steps to minimize potential impacts on your operations:<h4>1. Move Goods Early</h4><ul><li>If possible, expedite the shipment of goods ahead of the potential strike. Many terminals are extending hours to help clear out containers before the deadline. For example, Port of Virginia is encouraging importers to remove their cargo by September 30th to avoid unnecessary demurrage charges.</li></ul><h4>2. Explore Alternative Ports</h4><ul><li>Consider using West Coast or Canadian ports to reroute your shipments. Ports such as Vancouver or Los Angeles may offer viable alternatives for shipments bound for the Midwest or Eastern U.S. However, these ports could also face congestion as more shippers seek alternatives.</li></ul><h4>3. Leverage Air Freight</h4><ul><li>For high-value or time-sensitive shipments, consider air freight as an alternative, especially for industries like automotive, pharmaceuticals, or retail. Although air freight costs are higher, it can provide a temporary solution for urgent shipments.</li></ul><h4>4. Work Closely with Partners</h4><ul><li>Maintain open lines of communication with your shipping and logistics partners. Shipping lines like Maersk and ZIM have already issued advisories, and regular updates will help you stay informed of operational changes. For example, Maersk has introduced a Port Disruption Surcharge effective October 21st, which could affect your costs.</li></ul><h4>5. Prepare for Longer Lead Times</h4><ul><li>Adjust your logistics and inventory strategies to account for potential delays. Implement a buffer in your inventory to avoid stockouts and service disruptions.</li></ul><h4>6. Understand the Contingency Plans</h4><ul><li>Many ports are developing contingency plans. For example, Port of Virginia and Port of New Orleans have outlined schedules for halting and resuming operations. Understanding these plans will help you make informed decisions for your cargo.</li></ul><h4>7. Monitor for Federal Intervention</h4><ul><li>The U.S. government has the power to intervene under the Taft-Hartley Act, which allows the President to halt strikes for 80 days in the interest of national security. While the White House has not indicated plans to do so yet, the political calculus could change as the situation evolves.</li></ul>

What Can You Do to Avoid Supply Chain Disruptions?

While the full impact of the U.S. port strike remains to be seen, proactive planning can help you mitigate the worst effects. Whether rerouting shipments, speeding up delivery schedules, or utilizing air freight, these steps will help keep your business running smoothly during the disruption.<h3>Key Resources:</h3><ul><li>U.S. Government Updates: Stay updated on federal intervention and strike developments.</li><li>Port Contingency Plans: Regularly check the websites of major ports for updates on operational hours and changes.</li><li>Logistics Partners: Keep close contact with your freight forwarders and logistics companies to ensure you are prepared for any shifts in operations.</li></ul>By staying informed and planning ahead, you can ensure your supply chain weathers this storm with minimal disruption.

Final Thoughts

 101 Guide to Understanding the U.S. Port Strike and How to Avoid Supply Chain Disruption

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