Logistics Market Update July 2024

Logistics Market Update July 2024

Logistics Market Update July 2024- 1920x1080

Monthly Highlights

Paris Olympics will be a true test of supply chains

The 2024 Paris Olympics will impact global supply chains with increased demand and logistical challenges, while investments in infrastructure aim to enhance long-term capabilities and sustainability.

Source: https://www.freightwaves.com/news/paris-olympics-will-be-a-true-test-of-supply-chains

Container spot rates have peaked as all major trades see prices fall

Peak container freight prices have declined this week due to reduced ship utilization and increased capacity, ending a three-month period of rising rates.

Source: https://theloadstar.com/container-spot-rates-have-peaked-as-all-major-trades-see-falling-prices/

FedEx to cut domestic flight activity by 60%

FedEx plans to cut daytime flights and city destinations by up to 60% in response to losing its U.S. Postal Service contract, leading to significant pay cuts for pilots.

Source: https://www.freightwaves.com/news/fedex-to-cut-domestic-flight-activity-by-60 

Key Takeaways

  • The 2024 Paris Olympics will be a challenge, but infrastructure investments aim to improve long-term sustainability and capabilities.
  • Amazon’s new AI chip outperforms NVIDIA’s by up to 50% in cost and efficiency, and despite Amazon’s late entry into the market, it has the potential to reshape the AI ​​technology landscape.
  • Amazon is launching a discount shopping app for low-cost Chinese products with 9-11 day shipping, aiming to compete with Temu and Shein and expand its presence in the discount retail sector.

Ocean Freight Market Update

  • Transpacific volumes remain strong, exceeding last year’s figures, but delays and capacity issues are expected from Cape of Good Hope routes due to structurally empty voyages, port congestion and adverse weather conditions.
  • Volumes on FEWB remain very strong, exceeding last year’s figures. There are structurally empty sailings due to the Cape of Good Hope routes and port congestion in Asia. However, extra loaders added in late July are helping to compensate for the smaller vessels and longer transit times.
  • Demand and prices in Northern Europe are stable and are expected to remain so until the end of September. In contrast, congestion and delays in the Mediterranean are causing empty sailings and 100% utilization, prompting carriers to raise prices through Peak Season

Global Schedule Reliability

Global Schedule Reliablity- July 2024

Schedule reliability increased by 3.8 points m-month on month to 55.8%, in May 2024.

Asia

  • Additions to shipping capacity, including new sailings and additional carriers through August, will keep the charter market tight as carriers continue to face tonnage shortages.
  • In Asia, global demand for ocean freight container shipping reached a record high, up 7.5% from 2023, despite significant capacity challenges such as severe port congestion and diversions around Africa.

North America

  • In North America, reduced capacity did not impact demand from Northern Europe, with most carriers holding steady through the end of Q3.
  • Mexico’s domestic intermodal shipments have increased by 139% year to date, accounting for 2.5% of the North American market, due to nearshore and rail investments, while Canada’s domestic intermodal shipment growth has stalled due to an unresolved labour dispute affecting major Canadian railroads.
  • Spot rates from East Asia to Europe showed mixed trends in July, with declines of 16% and 11% in Thailand and Taiwan, respectively, and increases of 7%, 5% and 3% in Hong Kong, South Korea and Japan, respectively, despite an 8% decline in Hong Kong tonnage.

Air Freight Updates

  • Global air cargo tonnage decreased by 1% in the second week of July 8-14, 2024, with declines of 5%, 2% and 5% in Europe, Asia Pacific and Africa, and increases of 6% and 4% in North America and Central and South America.
  • The average air cargo rate worldwide decreased by 1% in the first half of July to $2.50 per kilo, but remained 11% year over year and 44% above July 2019 levels, while significant increases of 23% and 51% were seen in Asia Pacific and MESA origins, respectively.
  • Global air cargo trends show a slight decrease (-1%) in paid weight flown worldwide compared to the previous two weeks, but tonnages were up 12% year-on-year in Weeks 22 and 23.

Asia

  • In the first half of July, global air cargo tonnage fell by 2% in the Asia-Pacific region, while Africa saw a 5% decline and the world saw a 1% decline.
  • Spot prices to Europe from various East Asian origins showed mixed trends in the first half of July, with declines of 16% and 11% in Thailand and Taiwan respectively, while increases of 7%, 5% and 3% were seen in Hong Kong, South Korea and Japan.

North America

  • North America saw a 6% increase in air cargo tonnage, contrasting with declines in Asia-Pacific and Europe.
  • The average worldwide air cargo rate dropped by 1% to $2.50 per kilo in first half of July, though North American rates have seen substantial increases, with notable year-on-year rises in rates from Asia-Pacific origins to the U.S.
Avarage Wait Times- July 2024


Freight Market and Amazon News

Amazon’s Latest AI Chip Promises 50% Performance Boost

Amazon has launched a new AI chip that aims to reduce costs and increase efficiency for its AWS AI cloud services, better than NVIDIA’s models by up to 50%. Despite being a late entrant into the AI ​​chip market, Amazon’s latest processors could significantly impact the competitive landscape in AI technology.

Source: https://www.trendforce.com/news/2024/07/30/news-amazon-unveiled-the-latest-ai-chip-performance-up-by-50/ 

Amazon to Launch Discount App to Rival Temu

Amazon is preparing to launch a new discount shopping app offering low-cost Chinese products with shipping times of 9 to 11 days to compete with platforms such as Temu and Shein. The move aims to expand Amazon’s reach in the discount retail sector amid increasing competition from new e-commerce players.

Source: https://www.independent.co.uk/tech/amazon-dicount-store-temu-app-b2569786.html

Amazon Hits Record Delivery Speeds for Prime Members


Amazon set a new record for Prime delivery speeds, delivering more than 5 billion items globally this year on the same or next day, a 30% increase over last year.

Source: https://www.aboutamazon.com/news/retail/amazon-prime-same-day-delivery-speed-2024 

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