Trace
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November 11, 2024
The Future of Air Cargo: Why 2025 Will Be a Game-Changer
In a rapidly changing global landscape, air cargo is emerging as a key player in the supply chain...
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April 1, 2024
This week's ocean cargo landscape continues to be a wave of challenges and adjustments. Buckle up as we dive into the latest developments impacting your business.
The collision between the container ship Dali and the Francis Scott Key Bridge in Baltimore has sent shockwaves through the East Coast shipping industry. The bridge's collapse has caused significant disruptions, with potential casualties still under investigation.
Impact: Major carriers like CMA CGM have declared force majeure, leaving many scrambling for alternative routes. Northeast ports brace for an influx of diverted Baltimore-bound cargo, potentially leading to congestion issues.
1. Surcharge Adjustments: Some ocean carriers are trimming their ETS surcharges for Q2 due to a decline in carbon prices. This could offer some relief for shippers facing rising costs. Expect reductions in the range of $2-$4 per ton.
2. Shifting Alliances: The future of global carrier alliances remains in flux. THE Alliance, a major trans-Pacific network, downplays the impact of Hapag's departure, hinting at potential restructuring within these partnerships.
3. Antitrust Concerns Linger: The debate surrounding antitrust exemptions for ocean carriers continues. The recently proposed OSRA 2.0 bill targets China but leaves the exemption untouched, reigniting discussions about fair competition within the industry.
This week, the Drewry World Container Index (WCI) noted a 3% decrease in the composite index to $2,929 per 40ft container, marking a significant 71% increase from the same period last year. Despite the week-on-week drop, the index stands 106% higher than the pre-pandemic average of 2019, which was $1,420 for a 40ft container.
Year-to-date, the average composite index has been $3,413 per 40ft container, $709 above the 10-year average influenced by the COVID-19 period.
1. Shanghai to New York: Down 6% to $5,058 per FEU.
2. New York to Rotterdam & Shanghai to Los Angeles: Decreased by 3% to $637 and $3,825 respectively.
3. Shanghai to Rotterdam, Rotterdam to Shanghai, & Shanghai to Genoa: Fell by 2% to prices around $3,159 to $3,806.
4. Los Angeles to Shanghai & Rotterdam to New York: Dipped by 1% to $691 and $2,261 respectively.
Drewry forecasts a minor decrease in spot freight rates in the near term. As fluctuations continue, adaptability and strategic foresight remain essential for navigating the global shipping landscape.
1. Consulting with freight forwarders specializing in specific routes can provide real-time data on current ocean cargo rates.
2. Industry reports often cite percentage increases in rates, though these can vary depending on origin, destination, and container size. Focus on understanding general trends rather than specific numbers.
The future of ocean cargo rates remains unclear. Disruptions and high demand continue to push rates upwards. However, potential improvements in global supply chain efficiency and increased capacity could lead to some stabilization.
Air Cargo Insights: Navigating Rising Rates and Regional Highlights
In the ever-evolving landscape of global logistics, air cargo rates have recently experienced a notable uptick, particularly from Asia Pacific and Middle East & South Asia (MESA) regions. This trend is fueled by persistent disruptions in container shipping and the booming demand for cross-border e-commerce shipments.
The latest data from WorldACD Market Data for week 12 (March 18-24) reveals an average global rate increase of +3%, reaching $2.45. This rate is nearing last year's high, being within 10% of it. Despite a slight -2% dip in global tonnages compared to the preceding week, the fortnightly comparison shows a promising +1% increase in tonnages and a +6% surge in average rates, with capacity expanding by +2%.
The Asia Pacific and MESA regions are at the forefront of this rising trend, with rate increases of +7% and +10%, respectively. This growth is primarily driven by disruptions to Asia-Europe container shipping and a robust demand for e-commerce.
Year-on-year comparisons are becoming increasingly relevant, showcasing a +8% global tonnage increase, led by MESA (+15%) and Asia Pacific (+12%). This is a testament to the air cargo industry's resilience amid challenges like the Red Sea vessel attacks and the sustained demand for e-commerce. Notably, air cargo capacity has also seen a significant boost, with Asia Pacific and Central & South America witnessing +19% and +12% increases, respectively.
MESA stands out with a remarkable +15% year-on-year tonnage increase and a +6% capacity boost. Additionally, it's the only major origin region to record year-on-year rate increases, with a staggering +29% in recent weeks. The disruptions to container shipping have notably affected air cargo demand, particularly in sea-air hubs like Dubai, Colombo, and Bangkok, with significant tonnage increases to Europe.
The Eastern Mediterranean region has adapted to container shipping disruptions, seeing increased air freight traffic to the MESA region. Notable increases from Athens and Istanbul to Dubai highlight the shifting dynamics in regional air cargo transport.
Data and insights sourced from WorldACD Market Data, Drewery world container index.
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