Get the latest updates on freight forwarding rates, capacity issues, port congestion, and airfreight trends in the Asia, USA, and Europe markets for July 2024.

TFG Global Freight Market Update: July 2024

Asia market

Rates

During the second half of June, demand from China noticeably cooled, resulting in only slight rate increases effective June 15th. The Maersk PSS, released on June 12th, has been successfully implemented, with other carriers expected to follow suit starting July 1st.

The Shanghai Containerized Freight Index (SCFI) is holding above USD 2700 per FFE as of late June, with spot pricing ranging from USD 1300 to 1700 per TEU from base ports in China to AUEC. Rates into the West Coast of Australia have seen a significant hike, with July pricing anticipated to exceed USD 1000 per TEU, driven by congestion at transshipment ports affecting AUWC sailings. Meanwhile, SEA pricing remains slightly more stable, with rates fluctuating between USD 800 and 1200 per TEU starting from July 1st.

Capacity

Many carriers are redeploying their larger vessels to the Asia-Europe/US trades, worsening capacity issues for APAC, especially with a capacity crunch expected in Q3, the usual peak season. Global port congestion has reached an 18-month high, with 60% of vessels anchored in Asia, totaling 2.4 million TEU awaiting anchorage as of mid-June. Vessels continue to be rerouted around the Cape of Good Hope to avoid Red Sea attacks, causing severe bottlenecks at many Asian ports, including Singapore, Port Klang, and Tanjung Pelepas, with Shanghai and Qingdao also impacted. Pre-booking 3-4 weeks in advance is highly recommended.

Schedule Reliability

Sea-Intelligence reported that schedule reliability reversed its improving trend, dropping by 2.5 percentage points month-over-month in April 2024. This figure is now only 0.6 percentage points higher than the lowest year-to-date point of January 2024. Wan Hai was the most reliable top-13 carrier in April 2024, with schedule reliability of 59.0%, followed by Evergreen at 53.2%. ZIM was the least reliable carrier, with a schedule reliability of 44.2%. Only CMA CGM and Evergreen recorded month-over-month improvements in April, each with a 1.3 percentage point increase.

Equipment Shortages:

Equipment shortages are severe in most of Asia’s main loading ports. Carriers are attempting to reposition empties, but this will remain a lingering issue for shippers in the short term.

Port Congestion

Congestion in Singapore has hit its worst levels since the pandemic, causing delays of up to a week for vessels to berth. This is primarily due to changes in shipping schedules following longer voyages around the Cape of Good Hope, leading to missed weekly sailings. Some carriers are skipping Singapore altogether to maintain shipping schedules, directly impacting the West Coast trade, with most carriers transiting via a SEA port.

Europe Market

As reported by Sea-Intelligence, due to ongoing complications from Red Sea diversions, the Asia-to-Europe trade is currently down by 10% of its usual shipping capacity. Pricing is skyrocketing, with fears rates could exceed USD 20,000 per FFE; prices will increase until sufficiently many shippers cannot afford to ship their goods. This will lower container demand, to the point where it matches the available vessel capacity.

Northern European hubs are operationally stable, with freight pricing to APAC remaining steady for July. However, heavy floods in Germany have disrupted overland capabilities, causing train cancellations and road closures in some areas.

USA Market

The SCFI for the US West Coast has hit a two-year high, with capacity continuing to be an issue from Asia. Rates are exceeding USD 7000 per 40′. Equipment shortages persist in the US, especially for shippers loading at inland ports, exacerbated by vessel rerouting and congestion at Asian hubs. US export volume is up 4.9% year-over-year, with a container trade imbalance of 2.26 in favour of imports, with Houston and Los Angeles being the preferred gateways. It’s recommended to pre-book 3-4 weeks in advance; please contact us to discuss your needs further.

Further, the cargo ship Dali has finally left the port of Baltimore after its disastrous collision with the Francis Scott Key Bridge, which killed six people. The vessel departed the city nearly three months after the incident on Monday. The Baltimore Captain of the Port has reopened the Fort McHenry Limited Access Channel to commercial vessel traffic, though the situation remains fluid.

Airfreight:

Asia Pacific air cargo demand has surged 20% year-over-year, largely driven by e-commerce. Global international air cargo capacity has increased by 9% this month. Freighter operators have seen their volumes increase by 6% in the first five months of the year. Capacity constraints remain in key markets such as Asia to the EU and US. Retail giants Shein and Temu are shipping around 9000 tonnes of cargo daily, driving prices to unprecedented levels. This is further exacerbated by dire ocean freight conditions, boosting demand for air cargo.

When it comes to freight forwarding, we are the full package. Market-leading service, values, and solutions.

For all your freight forwarding solutions, internationally and Australia-wide, you need TFG Global.

Phone: 1300 (693 734) MY FREIGHT | +61 3 9090 7546
Email: andrew@tfgglobal.com.au
Web: www.tfgglobal.com.au

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