Logistics Market Update August 2024

Logistics Market Update August 2024

Logistics Market Update August-2024

Monthly Highlights

Port of Ningbo remains open, but logistics services falter due to COVID restrictions

The Port of Ningbo continues operations despite stringent COVID restrictions, which have significantly disrupted logistics services. These restrictions have led to delays, reduced capacity, and operational challenges, impacting the global supply chain and creating bottlenecks in one of China’s busiest ports.

Source: https://theloadstar.com/port-of-ningbo-open-but-logistics-services-stutter-as-covid-restrictions-bite/

Port strikes could trigger airfreight capacity crisis

Looming U.S. East and Gulf Coast port strikes threaten to expose vulnerabilities in airfreight capacity, particularly as e-commerce demand surges. Shippers are already shifting volumes to avoid disruption, but a strike could create a severe capacity crisis for airfreight, potentially leading to significant delays and logistical challenges.

Source: https://theloadstar.com/port-strikes-would-expose-airfreights-vulnerability-to-a-capacity-crisis/

Containerships face challenges navigating the Cape of Good Hope

Containerships rerouting around the Cape of Good Hope to avoid congestion are encountering numerous challenges, including rough seas and logistical hurdles. These difficulties complicate global shipping routes, adding further strain to already disrupted supply chains.

Source: https://theloadstar.com/the-challenges-for-containerships-braving-the-waters-around-the-cape/ 

Key Takeaways

  • Amazon’s third-party sellers can now select their preferred trucking carrier when sending LTL and truckload shipments to the company’s U.S. fulfilment centres, according to an Aug. 9 announcement.
  • Looming U.S. East and Gulf Coast port strikes threaten to expose vulnerabilities in airfreight capacity, particularly as e-commerce demand surges. Shippers are already shifting volumes to avoid disruption.
  • Maritime gateways handled 40% of international freight value in 2022, according to the Department of Transportation. As a result, keeping track of seaport volumes can be a good barometer for establishing years- and months-long trade trends nationwide.

Ocean Freight Market Update

  • Transpacific volumes remain strong, exceeding last year’s levels. However, the industry continues to face challenges with delays and capacity constraints, particularly on routes passing through the Cape of Good Hope. These issues are largely due to structurally blank sailings, ongoing port congestion in Asia, and adverse weather conditions. The addition of extra loaders in late July has helped to alleviate some of the pressure on these routes, though longer transit times are still expected.

  • On the Far East Westbound (FEWB) routes, demand remains robust, surpassing figures from the previous year. Persistent equipment shortages and congestion at major Asian ports, exacerbated by vessels rerouted via the Cape of Good Hope, have caused further delays. Despite these challenges, the injection of extra loaders is helping to balance the impact of smaller vessels and extended lead times, ensuring that schedule reliability is maintained as much as possible.

  • In Northern Europe, the market remains stable, with demand and prices expected to hold steady until the end of September. In contrast, the Mediterranean region is experiencing significant congestion and delays, resulting in structurally blank sailings and full vessel utilisation. This has prompted carriers to increase rates through Peak Season Surcharges (PSS), particularly as demand continues to rise​.

Global Schedule Reliability

Global Schedule Reliablity August 2024

Schedule reliability increased by 1.2 points monthly to 60%, in July 2024.

Asia

  • The shipping market in China continues to face challenges as carriers contend with ongoing tonnage shortages. Despite these constraints, additions to shipping capacity, including new sailings and the introduction of additional carriers through August

  • In East Asia, global demand for ocean freight container shipping has surged, with an 8.3% increase compared to 2023. This heightened demand continues despite substantial capacity challenges, including severe port congestion and diversions around Africa.

North America

  • The Transpacific route is seeing activity that surpasses last year’s performance. However, structurally blank sailings have emerged due to rerouting via the Cape of Good Hope (COGH) and ongoing port congestion in Asia and North America.

  • Since additional loader (XL) space was added to the transpacific trade lane, space pressure on the US West Coast (WC) has decreased, particularly in the Pacific Southwest (PSW) originating from major Chinese ports.

  • Following the addition of extra loader space (XL) to the transpacific trade lane, space stress on the US West Coast (WC), particularly in the Pacific Southwest (PSW), has been relieved, particularly from China’s major ports.

Air Freight Updates

  • Annual Growth: In August 2024, global air cargo rates and tonnages saw a 12% year-on-year increase, the highest monthly annual increase this year. Rates rose to $2.50 per kilo, 44% higher than in July 2019.

  • The North China market has started to strengthen on both FEWB and TPEB routes, driven by increased volume in e-commerce, Apple’s NPI and other traditional air cargo customers.

  • Bangladesh Market Overlook: Despite political and logistical challenges, air cargo tonnage from Bangladesh to Europe recovered in week 31, returning to the volumes observed in weeks 25-28. However, these figures remain below the levels recorded during the same period last year.

Asia

  • Annual Growth: In August 2024, global air cargo rates and tonnage experienced a significant 12% annual increase, representing the highest monthly annual growth ever recorded this year. This increase brought rates to $2.50 per kilogram, a significant 44% increase compared to the pre-pandemic benchmark in July 2019. This growth highlights the resilience and continued demand in the global air cargo market, despite the challenges faced in recent years.

  • The North China market has begun to show signs of strengthening on both Far East Westbound (FEWB) and Trans-Pacific Eastbound (TPEB) routes. This growth is being fuelled by increased volumes in e-commerce, the launch of Apple’s new product launches (NPIs) and growing demand from other traditional air cargo customers. These factors are contributing to a more solid market outlook in the region

North America

  • Capacity is sufficient and demand from both North America and Europe is stable.

  • Last month saw service disruptions due to natural disasters. Volcanic eruptions on Russia’s Kamchatka Peninsula released ash on key flight routes, leading to load reductions for airlines flying from Asia to the US and Europe.

Logistics Market Update August 2024- Avarage Wait Times Board



Freight Market and Amazon News

Amazon equips sellers with more choice on trucking providers

Amazon’s third-party sellers can now select their preferred trucking carrier when sending LTL and truckload shipments to the company’s U.S. fulfillment centers, according to an Aug. 9 announcement.

Source: https://www.supplychaindive.com/news/amazon-sellers-trucking-preferred-carrier/725250/

Amazon expands options for sellers to handle customer returns

Amazon provides sellers using Fulfillment by Amazon (FBA) with flexible options for seamlessly managing product returns.

Source: https://www.aboutamazon.com/news/small-business/amazon-return-options-sellers

US ports by volume: How maritime cargo trends are stacking up


Maritime gateways handled 40% of international freight value in 2022, according to the Department of Transportation. As a result, keeping track of seaport volumes can be a good barometer for establishing years- and months-long trade trends nationwide.

Source: https://www.supplychaindive.com/news/largest-us-ports-by-volume-month-coast-cargo-trends/693493/


Forceget Supply Chain Provider is a leading NVOCC licensed global logistics company that specializes in parcel, air and ocean shipping. With offices in key locations such as the USA, China, Hong Kong, Turkey, Israel and Colombia, we are well-positioned to assist you with all your logistics and brokerage needs, no matter where you are located. We take care of all the complexities of international shipping, allowing you to focus on what you do best – competing in your local market. Additionally, we pride ourselves on being the number one Amazon FBA focused freight forwarder, ensuring that your products are delivered to Amazon warehouses in a timely and cost-effective manner. With Forceget, you can have peace of mind knowing that your global logistics needs are in expert hands.