According to American Journal of Transportation, Hurricane Milton disrupted operations in Florida last week, keeping the Port of Tampa Bay closed until early this week. While ports in Miami and Jacksonville resumed activity sooner, the storm’s impact added to ongoing challenges across the U.S. East Coast, with many container vessels facing delays. The broader shipping industry is also adjusting to shifting freight rates and capacity issues as the peak season winds down.
Port Delays and Blanked Sailings
East Coast ports are still clearing backlogs from the three-day International Longshoremen’s Association (ILA) strike earlier this month. Vessels are waiting up to four days for slots at certain ports, while Savannah continues to struggle with congestion from Hurricane Helene in September. Some carriers have responded by announcing blanked sailings to avoid vessels being stuck in the congestion. These blank sailings also reflect a need to adjust capacity as post-peak season volumes ease.
Transpacific and Asia-Europe Freight Rate Shifts
Transpacific container rates have decreased by 30% from their July peaks, although they remain about $1,000 per FEU higher than the floor reached in April. Rates for Asia-to-U.S. West and East Coast routes stand at $5,565/FEU and $6,787/FEU, respectively, still significantly above typical levels for this time of year. As long as Red Sea diversions continue to absorb industry capacity, rates may not drop much further.
Meanwhile, Asia-Europe rates have dropped even faster, now 58% below their July peak. With peak demand long over, rates for Asia to Europe and the Mediterranean are back near April levels, around $3,625/FEU to Europe and $4,118/FEU to the Mediterranean.
Air Cargo Rates and E-Commerce Demand
China-North America air cargo rates, which surged to more than $7.00/kg due to the ocean-to-air shift during the ILA strike, have now settled at over $5.00/kg. This remains elevated ahead of air cargo’s peak season as e-commerce volumes continue to grow. The surge in e-commerce is expected to keep air cargo space tight and drive rates higher through the holiday season.
The future of e-commerce air shipments may be affected by proposed changes to the de minimis exemption, which currently allows low-cost imports to bypass customs costs. While no immediate rule changes are expected, a reduction in access to this exemption could lead e-commerce platforms like Temu and Shein to adjust their shipping strategies, possibly decreasing reliance on air cargo.
Conclusion
The global shipping and air cargo markets are experiencing significant shifts due to a mix of natural disruptions, labor strikes, and post-peak season volume adjustments. Freight rates remain elevated across several key routes, while air cargo continues to feel the impact of surging e-commerce demand. As regulatory changes and market adjustments continue to unfold, the industry will need to navigate these challenges to maintain fluidity in global trade.
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Source: American Journal of Transportation
