International shipping and logistics market update - Week 35/2024

Update on international shipping and logistics markets for Asia, Europe and North America in Week 35/2024.

International shipping and logistics market update - Week 35/2024

Drewry’s World Container Index for the week of 35/2024 continued to decline by 3% from the previous week to USD 5,181. This freight rate index is 265% higher than the pre-pandemic average of 2019 ($ 1,420).

Drewry’s World Container Index Week 35/2024

Drewry’s World Container Index Week 35/2024 (Photo: Phaata | Source: Drewry)

1. Asia - Northern America route

Ocean freight rates from Asia to the West Coast of North America in week 35/2024 decreased to USD 6,670/FEU, equivalent to a decrease of 1.81% compared to the previous week, down 4.7% compared to the previous month, according to Xeneta data.

Export demand remains strong, with many carriers adding capacity to ease backlogs caused by the surge in cargo volumes from May to July. However, current inventory levels may reduce the need for additional cargo in the coming weeks,

There are numerous cancellations on routes to the Cape of Good Hope (COGH) and port congestion in Asia and North America. Further delays and capacity challenges are expected on the US East Coast due to adverse weather conditions around COGH.

Water levels in Panama’s Gatun Lake have recovered and local authorities have eased weight restrictions on the Panama Canal.

Carriers are implementing cancellation plans that will impact Week 38 to Week 41 to adjust capacity on the route in preparation for the upcoming Golden Week holiday in China. Expect changes to shipping schedules or transit times, especially for feeder connections, as cancellations may result in shipments being transferred to subsequent sailings.

Spot Rates: The General Rate Increase (GRI) on September 1 has been announced by shipping lines and is likely to be implemented by shipping lines, leading to higher rates.

Fixed Rates: Discussions on the Peak Season Surcharge (PSS) remain unchanged. With the upcoming implementation of the GRI on September 1, the gap between spot rates and long-term contract rates has widened. The PSS is expected to remain in place until September 1.

Canada:

On August 24, 2024, the Canadian Labour Relations Board (CIRB) authorized binding arbitration between Canadian National Railway Company (CN) and Canadian Pacific Kansas City Limited (CPKC) and the Teamsters Canadian Railway Conference (TCRC). Additionally, the CIRB has prohibited any further labor strikes, including lockouts or work stoppages, during the conciliation process. As a result, the recent work stoppage notice issued by the Teamsters to CN is now null and void.

Both CN and CPKC workers returned to work Monday morning in Canada, following the CIRB’s directive. CPKC has ordered TCRC workers to return to work on Sunday shifts to quickly restart the Canadian economy and minimize further disruption to the supply chain.

While they will comply with the CIRB’s decision, the Teamsters will also appeal the ruling in federal court.

Asia-US West Coast Freight rate | Week 35/2024

Asia-US West Coast Freight rate | Week 35/2024 (Image: Phaata.com)

2. Asia - Northern Europe route:

Freight rates from Asia to North Europe in week 35/2024 to USD 7,550/FEU, equivalent to a decrease of 4.02% compared to the previous week, down 11.20% compared to the previous month, according to Xeneta data.

The demand is falling, along with many blank sailings, which reduced operations in late August. Shipping vessels are being used relatively efficiently with a fairly high filling rate. However, in September, with many vessels returning to Asia, the market will have more capacity than in August. Shipping lines are now pushing to fill vessels by increasing cargo volumes.

Spot rates fell further in the first half of September, but are still higher than in early 2024, after the Lunar New Year. Carriers are now taking a more proactive approach to adjusting rates to optimize vessel utilization.

The use of long-term contract rates still faces constraints from carriers regarding slot and equipment priorities. Equipment shortages are improving, with some ports of loading (POLs) with fewer vessels calling still experiencing potential shortages of container types, particularly 20'GP and 45'HC.

Asia-Northern Europe Freight rate | Week 35/2024

Asia-Northern Europe Freight rate | Week 35/2024 (Image: Phaata.com)

3. Northern America - Asia route:

Freight rates from North America (West Coast) to Asia continued to decline in week 35/2024 increased to USD 666/FEU, equivalent to an increase of 1.06% compared to the previous week, down 3.62% compared to the previous month, according to Xeneta data.

Capacity has been reduced on routes from the US to the Indian subcontinent, Middle Eastern ports and Northern European ports, related to vessel shortages and cancelled sailings.

To ensure smooth export shipments, Phaata.com advises shippers to book 2 weeks in advance for coastal loading shipments and 3-4 weeks or more for inland rail loading shipments.

US West Coast - Asia Freight rate | Week 35/2024

US West Coast - Asia Freight rate | Week 35/2024 (Image: Phaata.com)

4. Northern Europe-Asia route:

Freight rates from North Europe to Asia continued to decline slightly in the week of 35/2024 decreased slightly, at USD 492/FEU, equivalent to a decrease of 0.2% compared to the previous week, up 1.65% compared to the previous month, according to Xeneta data.

Northern Europe - Asia Freight rate | Week 35/2024