The freight forwarding market is undergoing significant shifts as we move into November 2024. From unexpected demand surges in Asia post-Golden Week to new shipping services enhancing capacity and changing freight rates, this update covers the latest trends impacting global logistics. Stay informed with insights on air, sea, and intercontinental freight developments to stay competitive in today’s dynamic market.
Air Freight Trends:
Air cargo space remains constrained following China’s Golden Week, especially in Shenzhen, with rates seeing upward trends. The industry anticipates this momentum will continue into Q1 2025, driven largely by e-commerce demands and peak season traffic. According to Xeneta, in September, global spot rates increased by 26% month-over-month, hitting USD 2.71 per kg, marking the fourth consecutive month of growth.
Asia Market Overview:
Rates:
In November 2024, Asia saw a surprising uptick in demand following China’s Golden Week holiday. Initial expectations leaned towards slow October pricing due to low September activity, but increased bookings have led to high vessel utilization, with some carriers rolling shipments. According to Drewry’s World Container Index, container prices dipped by 4%, reaching $3,216 per 40ft container by mid-October. The year-to-date average sits at $4,058, notably higher than the 10-year average of $2,834, although this figure reflects recent exceptional conditions (source: Drewry).
From mid-October, freight rates increased across carriers, with rates between USD150–USD300 per TEU due to a post-Golden Week demand surge. Base Port China to East Coast rates are now at approximately USD3800-4200 per FEU, while West Coast rates are higher, around USD4700 per FEU. Major carriers are setting General Rate Increases (GRIs) for early November, with OOCL and MSC each announcing a USD300/TEU increase across key routes to Australia.
New Capacity Introductions:
Several new services are set to enhance regional capacity. Maersk and Hapag Lloyd announced their new Northern Star service, which operates a direct route from Shanghai and Hong Kong to key New Zealand ports, offering improved coverage for Australia-NZ trade lanes. The initial sailing, Maersk Innoshima 443S, departed from Shanghai on October 21, 2024.
MSC has also introduced the Koala Service, connecting China and Indonesia with direct routes to Fremantle. TS Lines has arranged additional loader vessels to support this route in October, but limited vessel capacities of under 2,000 TEU per vessel may affect space availability.
Schedule Reliability Concerns:
Several strong typhoons in the South China Sea have significantly impacted schedule reliability, with vessels experiencing delays of 3-12 days from mid-September through early October. The disruptions have been challenging for shippers, particularly with extended dwell times at key ports. Shanghai is currently facing delays of up to 7 days, Qingdao around 5 days, and Chennai and Bangladesh are also seeing 2-3 day hold-ups. In response to escalating port congestion on the Australian east coast, the A3 service has adjusted several port rotations to avoid prolonged berth wait times, aiming to mitigate schedule disruptions for downstream ports.
USA/Canada Market:
The Port of Long Beach achieved a record-breaking quarter, moving 2.63 million TEU in Q3 2024, its highest-ever container volume for a single quarter. Additionally, it handled 829,499 TEU in September alone, surpassing the previous record set in September 2023 by 70 TEU.
Shipping rates from Shanghai to major U.S. ports have experienced slight drops: Shanghai to New York declined by 3%, or $152, landing at $5,609 per 40ft container, while the Shanghai to Los Angeles route saw a 2% decrease, down by $78 to $4,941 per container.
Looking ahead, the political landscape may further impact trade; with the U.S. Presidential Inauguration scheduled for January 20, 2025, there is speculation that new trade tariffs could be imposed on Chinese imports if Trump assumes office, potentially affecting demand.
The ripple effects of recent U.S. port strikes along the East Coast and Gulf, which spanned three days, are still impacting the supply chain. This disruption has temporarily shifted some cargo back to West Coast ports, increased demand for air freight, and is expected to take an additional 4-6 weeks to fully stabilize.
Rail congestion at the Ports of Los Angeles and Long Beach continues to delay inland shipments. CaroTrans reports that off-dock imports are experiencing more than 10 days of delay before transfer from the port terminal to rail staging, followed by an additional 7-10 days before they are loaded onto railcars. Export shipments are similarly impacted, facing 7-10 day delays before outbound trains are cleared for departure to port terminals, significantly slowing down transport to key hubs like Chicago, Dallas, and Memphis.
Lastly, according to the Maritime Executive, labour disputes have escalated at the Port of Montreal, where the Montreal Longshoremen’s Union, CUPE Local 375, initiated a 48-hour overtime ban on October 10 to press negotiations with the Maritime Employers Association. This ongoing action may affect the handling of approximately half the port’s import and export cargo, potentially slowing operations.
European Market:
In Europe, severe weather conditions in September disrupted freight schedules as Storm Boris hit Central Europe, leading to increased delays. Sea freight rates have seen a downturn with a 9% decrease on the Shanghai-Genoa routes and a 6% drop on Shanghai-Rotterdam routes (source: Drewry).
From October 31, 2024, the EU’s updated Carbon Border Adjustment Mechanism (CBAM) requires actual emissions reporting for imports, marking a significant shift in compliance for companies operating in Europe. We will be releasing more information on this soon.
TFG Global General Industry Updates:
Global freight updates highlight important upcoming events and trends. Chinese New Year (Spring Festival) in January 2025 will be a major disruptor for global supply chains, as manufacturing halts for several weeks. Additionally, DB Schenker’s acquisition by DSV will establish the world’s largest freight forwarder once completed in 2025, surpassing DHL and Kuehne & Nagel in scale.
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