Lower The Panama Canal Authority is Imposing Greater Water RestrictionsFreight Rates Entail Carriers Doing More With Less
Due to climate conditions such as El Nino and poor rainfall, the Panama Canal Authority has stepped up water limitations and draught limits. This saves water and keeps canal levels stable, which is critical for worldwide marine trade. By impacting maritime routes, vessel capacity, and transit times, extended limitations may boost shipping costs and disrupt supply chains. Climate change makes critical trade routes vulnerable, requiring maritime logistics adaptation.
Trans-Pacific Container Shipping Rates Have Been Halted.
Trans-Pacific container transit rates have ceased to rise. Following large increases, container transportation rates have come to a halt. This halt in rate growth is the result of decreased demand, supply chain interruptions, and vessel capacity changes. The container shipping industry is dynamic and complex, which affects prices and causes problems for shippers and carriers.
MFN Hedge Fund Demands Equity Share in Yellow’s Bankruptcy
In Yellow Corporation’s restructuring, the hedge fund MFN wants more equity and influence in decision-making. MFN Partners is using this method to preserve its interests and enhance earnings during bankruptcy. The incident shows how struggling corporations and their stakeholders, including hedge funds, interact during bankruptcy and reorganization.
- The current drought is expected to have a substantial impact on the amount of traffic passing through the Panama Canal, causing delays and disruptions in ocean volume.
- US East Coast ports continue to perform well, as shippers have found the additional options beneficial following the lengthy West Coast port issues.
- Northern Europe has seen year-on-year growth in containerized import volume as sea shipping has become a viable option for many EU importers.
- New routes and more airlines are expanding the capacity and alternatives available to shippers entering and exiting Africa and the Middle East.
Ocean Freight Market Update
Capacity remains stable. To stabilize the market, the main carriers are prioritizing trade routes and planning July blank sailings. Freight rates are constant with small increases on some trade channels. Since April 2022, China-US West Coast rates have grown by 20%, while East Coast rates have dropped by approximately two-thirds.
Global schedule reliability rose 1.7 percentage points to 64.2 percent in April, 29.9 percentage points better than last year. New ships will boost capacity and maintain demand. This may lower rates in the second half. However, the Ukraine crisis, inflation, and supply chain interruptions could affect the market.
Global Schedule Reliability
Schedule reliability continues its upward trend.
- The Kaohsiung Port in Taiwan now has a completely automated terminal. Among other advances, the new terminal employs artificial intelligence and driverless cars to significantly improve operational efficiency. It can also handle four 24K TEU cargo ships at the same time.
- According to the most recent Sea-Intelligence statistics, yearly growth in North American East Coast imports volume has increased compared to 2019. However, loaded cargo volumes to North America’s West Coast have been declining since September of last year.
- In July, the Port of Savannah reported a 17% rise in volume. Even while the volume in July was 17% higher than the previous month, it is still 16% lower than the number in July last year, when the port handled its greatest volume ever, according to the Georgia Ports Authority.
Air Freight Update
In August 2023, air freight rates fell after rising sharply in previous months. Air freight demand remains low due to increased inflation and supply chain interruptions. Air freight market capacity is sufficient to fulfill demand, although the forthcoming peak season may strain capacity. Air freight is expected to fall 28% in 2023, but demand could rise in the second half. In August 2023, the air freight market is projected to remain tough, so shippers should carefully assess their alternatives and prepare ahead to avoid high rates and restricted availability.
- Cathay Group has announced a fresh order for 32 Airbus A320 aircraft as part of its ongoing efforts to expand and upgrade their fleet. The latest additions to the fleet will most likely serve destinations on the Chinese mainland and elsewhere in Asia-Pacific.
- Beginning in November 2023, China Southern Airlines will resume service between Guangzhou and Brisbane. The airline will fly the route four times per week with the goal of enhancing tourism between the two cities and capitalizing on the revival in air travel demand.
- Silk Way West Airlines is broadening its US network by flying from Baku to Los Angeles on a weekly basis. This adds a fourth US station to the newly launched Houston route, as well as existing lines to Chicago and Dallas.
- United Airlines revealed that it will commence daily service from San Francisco to Shanghai in October. They will also resume daily service from San Francisco to Beijing in November. More capacity for freight is expected.
Freight Market and Amazon News
Amazon Shipping Relaunches, Offering Sellers Delivery On Outside Channels
Amazon has reintroduced a ground shipping solution named Amazon Shipping, catering to sellers on its platform. This service facilitates the delivery of packages weighing up to 50 pounds for Amazon sellers within the contiguous U.S., ensuring delivery within two to five business days, encompassing weekends. The service leverages the U.S. Postal Service to comprehensively cover all delivery destinations. While specific shipping rates are not disclosed on Amazon’s website, the service notably exempts sellers from residential fees and weekend delivery charges.
Amazon’s Peak Season Fulfillment Service Fee Returns Oct. 15
From October 15 to January 14, Amazon will implement higher Fulfillment by Amazon (FBA) fees for the peak holiday shipping season, ranging from 20 cents to $2.50 extra per unit based on item size compared to regular charges. These peak season fees are the same as in 2022. Furthermore, Amazon will add a 2% fee to products sold by businesses using the Seller Fulfilled Prime program, which offers one or two-day Prime delivery while allowing sellers to handle their own fulfillment.
Amazon Seeks Boxless Orders; Customers Worry While Psychology Suggests It May Decrease Fraud
Amazon aims to ship certain orders without boxes, a move to cut packaging waste and boost efficiency. Despite concerns about increased package theft, psychologists believe this approach could deter theft. Surprisingly, boxed deliveries are more prone to theft due to visibility, while unboxed ones are less conspicuous and thus less likely to be stolen. Moreover, this initiative applies mainly to shipping small, lower-value items, reducing the likelihood of valuable contents.
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