- Shipping rates to North Europe and the Mediterranean have decreased.
- Potential port worker strike and increased competition are lowering transpacific rates.
- Flooding in India and high air cargo demand continue to affect rates and operations.
For shipments to North Europe and the Mediterranean, the arrival window for this year’s peak season goods is closing due to longer transit times around Africa and the upcoming Golden Week slowdown in China.
Transpacific Rates and Potential Strike
The easing of demand-side pressure is contributing to a decrease in rates. Prices to North Europe remain five times higher than in 2019, but rates have decreased 10% from their July peaks, while rates to the Mediterranean have dropped 19%.
On the transpacific route, the arrival window for goods to the East Coast and Gulf is nearly closed before a possible port worker strike on October 1st. This has caused a slight rate decline to the East Coast, although prices are still just 2% below their July peak.
The looming strike is pushing more volumes to the West Coast, leading to a 15% drop in rates from their mid-July high. Increased competition and capacity from new carriers are also contributing to this rate decline.
West Coast Demand and Capacity
Despite the overall rate decline, strong demand to the West Coast is indicated by increased rail dwell times at Long Beach terminals. Carriers are scheduling extra sailings for the next two months, potentially anticipating a shift from the East Coast.
This move may reflect an adjustment to a changing market rather than peak season demand extending into October.
Flooding Issues
Operations from India’s west coast ports had been smoother due to easing demand and increased capacity. However, severe storms last week have caused flooding and backlogs at the Port of Mundra.
Congestion remains above normal levels at some East Asian hubs, but improved distribution of transshipment containers is leading to more manageable wait times compared to May.
Air Cargo Demand and Rates
Cross-border e-commerce volumes continue to drive air cargo demand, even during typically slow months.
This persistent demand is keeping air cargo rates high, with the Freightos Air Index benchmark rates from China at US$5.12/kg to North America and US$3.61/kg to Europe.
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Source: Container News
