International shipping and logistics market update - Week 03/2024

International shipping and logistics market update - Week 03/2024

Drewry’s World Container Index for the week 03/2024 continued to increase sharply by 23% compared to the previous week, to 3,777 USD. This price index increased 82% compared to the same week last year and was 166% higher than the 2019 average before the pandemic (1,420 USD).

Drewry’s World Container Index Week 03/2024 (Photo: Phaata | Source: Drewry)

1. Asia - Northern America route

During the peak season market, carriers have proactively pushed up freight rates for sailings scheduled to start in January 2024. The freight rates on North American routes increased sharply. Ocean freight rates from Asia to the West Coast of North America in the week 03/2024 continued to increase sharply to 3,464 USD/FEU, up 42.03% over the previous week and up 105.09% over the previous month, according to Xeneta data.

Most of the ships' spaces are currently booked due to the situation in the Panama Canal and the sudden increase in cargo demand in preparation for the Lunar New Year peak season.

Factories are expected to close in the first week of February, and some small factories may start taking holidays in mid-January.

Due to the situation in the Red Sea, ships cannot return empty containers to Asia in time to meet demand. If the situation does not change, there may be equipment shortages in the coming weeks.

Prolonged drought is causing more restrictions on container ship traffic through the Panama Canal. There are 32 transits per day, down from the normal 36, and the canal is planning to gradually reduce that number weekly to an expected 18 per day before February 1. While container traffic has so far not been affected, further reductions will likely start to have an impact. Carriers are evaluating the possibility of adding more ships to Suez-bound routes. Alternative routes could be via the Suez Canal or via the U.S. West Coast by rail. Carriers are also implementing weight restrictions of 8 tons on average for containers moving through the canal. Traveling through Panama remains the fastest route to the U.S. East Coast.

Asia-US West Coast Freight rate | Week 03/2024 (Image: Phaata.com)

2. Asia - Northern Europe route:

The rate for container shipping from Asia to Northern Europe in the week 03/2024 continued to increase sharply to 4,739 USD/FEU, a sharp increase of 26.68% compared to the previous week and an increase of 203.78% compared to the previous month, according to Xeneta data.

Demand on the Asia - North Europe route increased in the second half of January, all ships were full. Week 3 rates increased due to high demand before the Lunar New Year, week 4 rates are expected to stabilize at a high level before Tet.

Most of the ships' spaces are currently booked due to the situation in the Red Sea, the Suez Canal and the sudden increase in cargo demand in preparation for the Lunar New Year peak season. Factories are expected to close in the first week of February, and some small factories may start taking holidays in mid-January.

Due to the situation in the Red Sea, ships cannot return empty containers to Asia in time to meet demand. If the situation does not change, there may be equipment shortages in the coming weeks.

Spot freight rates continue to rise sharply as the threat from the Red Sea causes most shipping lines to reroute ships from the Suez Canal to the Cape of Good Hope. This significantly increases shipping costs and is expected to increase total shipping time by 2-4 weeks depending on the vessel's destination. We predict that this increase in spot rates will not easily stop even after the Lunar New Year.

The Ocean Alliance and 2M have announced more than 15 blanked sailings in February, and there may be more announcements from THE Alliance soon. If the situation does not change, there may be equipment shortages in the coming weeks.

Strike in Germany: The strike ended on January 12 but no agreement was reached. It is expected that there will be another strike.

Gemini partnership: Maersk and Hapag Lloyd have announced a formal partnership agreement that will commence in January 2025.

Mediterranean route: Following Northern Europe, Asia-Mediterranean route rates for the second half of January are increasing in week 3. Week 4 rates are expected to remain high before Lunar New Year.

Asia-Northern Europe Freight rate | Week 03/2024 (Image: Phaata.com)

3. Northern America - Asia route:

The freight rates from North America (West Coast) to Asia in the week 03/2024 decreased slightly by 0.97% compared to the previous week, down to 718 USD/FEU. This price decreased by 3.75% compared to the previous month.

Empty containers at many railway stations in the US mainland are lacking due to a lack of imports into the Midwest. Shippers should make reservations 2-3 weeks in advance to ensure they have container equipment for export plans.

Overall demand remains weak and is forecast to last until the end of the first quarter of 2024. Fierce competition is taking place among carriers. Freight rates continue to be offered by shipping companies at attractive rates to fill ships while capacity is still surplus.

US West Coast - Asia Freight rate | Week 03/2024 (Image: Phaata.com)

4. Northern Europe-Asia route:

The freight rate from Northern Europe to Asia in the week of 03/2024 continued to increase sharply by 32.02% compared to the previous week, to 705 USD/FEU. This price increased by 99.15% compared to the previous month.

Northern Europe - Asia Freight rate | Week 03/2024 (Image: Phaata.com)

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Read more:

• Port of Long Beach Achieves Throughput of Over 8 Million TEUs in 2023
• Red Sea Crisis: Second Largest Capacity Drop Since the Ever Given Grounding
• Maersk and Hapag-Lloyd Partner to Form New Alliance
• Decline in Suez Canal Revenue Could Impact Egypt's Economy
• Red Sea-Suez Crisis: Shipping Rates from Asia to Northern Europe and Mediterranean Quadruple
• International shipping and logistics market update - Week 02/2024

Source: Phaata.com 

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