Weekly Recap 29th April to 3rd May

The maritime industry saw several notable developments in the past week:

• Cargo ship sinkings and groundings continued, with incidents reported in the Black Sea, off Sumatra, and in the Philippines.Salvage operations and oil spill responses were underway.
• Congestion at major Chinese ports like CNNGB, CNSHA, and CNTAO has stabilized, with only minor 0.5-day delays reported.
• The Ocean Alliance, comprising CMA CGM, COSCO, Evergreen, and OOCL, extended its partnership for another 5 years until 2027.3 Meanwhile, Maersk and Hapag-Lloyd announced a new "Gemini Cooperation" alliance starting in February 2025.
• Freight rates on the transpacific trade lane have caught up with the earlier surge on the Asia-Europe routes, with carriers announcing further rate hikes in February. However, the rate escalation is showing signs of peaking.
• Diversions around the Cape of Good Hope to avoid the Red Sea have increased fuel consumption, leading to higher EU emissions trading system (ETS) surcharges for carriers.
• Demand for the Asia-Europe sea-air freight option has soared as shippers look to avoid the longer Africa transit times.

Tonnage Surge Continues In Air Cargo:

Tonnage Surge from CSA:The air cargo tonnages from Central & South America (CSA) have continued their remarkable surge in the final week of April. This surge is primarily driven by flower growers, retailers, and logistics providers preparing for the upcoming Mother's Day events in May, especially in North America and other regions. The demand for flowers has significantly boosted outbound tonnages from CSA, contributing to the overall growth in worldwide tonnages.

Global Trends:According to WorldACD's weekly figures and analysis, total worldwide tonnages rose by a further 5% in week 17, following a previous gain of 4% in week 16. This positive trend has largely nullified the recent declines caused by various holiday periods. Despite a slight drop in average worldwide rates, the current rates remain significantly higher than pre-Covid levels, reflecting the resilience and recovery of the air cargo industry.

Impact on Pricing:The surge in export traffic from CSA has not only driven total worldwide tonnages into positive territory but has also led to a notable rise in rates, particularly on the CSA to North America lane. Additionally, the pricing patterns reveal significant year-on-year increases in rates from Asia Pacific and the Middle East & South Asia (MESA) regions, attributed to strong demand and supply disruptions in container shipping.

In summary, the ocean cargo market continues to face operational challenges, but also demonstrates resilience through carrier alliances and freight rate management. Shippers are adapting strategies to navigate the evolving market conditions and Air cargo tonnages from Central & South America surged in April, driven by preparations for Mother's Day. Worldwide tonnages rose by 5%, erasing previous declines, with rates slightly dropping but remaining above pre-Covid levels. Notably, rates from CSA to North America rose by 12%, showcasing the impact of seasonal demand. Post-Eid, Asia-Europe sea-air hubs continue to experience high demand, with Dubai-Europe tonnages soaring by 255% year-on-year.

Sources - WorldACD ,Perplexity 

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