Logistics Market Update September 2024

Logistics Market Update September 2024

Monthly Highlights

Market rises into Labor Day, but falls well short of Fourth of July

Tender volumes in the trusking industry increased in August, yet this rise in demand was accompanied by a slight increase in tender rejection rates, which could be a sign of carriers having more leverage in negotiations. However, the stock market only rose in the lead-up to Labor Day (first Monday of September), suggesting that this increase in demand was not as strong as the market rise seen before the Fourth of July (early July). 

Source: https://www.freightwaves.com/news/market-rises-into-labor-day-but-falls-well-short-of-fourth-of-july

Portland Terminal 6 aid “urgently” needed, report says

The Port of Portland is in urgent need of state funding to keep Portland Terminal 6, the state’s only international container terminal, operational. The terminal is currently losing money, but it is critical to the state’s economy. The port and its stakeholders have requested $35 million in capital investments and $5 million in operational funding from the state. 

Source: https://www.freightwaves.com/news/portland-terminal-6-aid-urgently-needed-report

5 new generative AI tools to accelerate seller growth and enhance the customer shopping experience

Amazon has introduced a suite of AI-powered tools designed to streamline seller operations, improve product listings, and ultimately enhance the overall customer shopping experience. Key benefits include AI-generated review highlights that provide customers with more informed purchasing decisions and the simplification of seller tasks, allowing them to allocate more resources to product innovation. 

Key Takeaways

  • The threat of a strike by dockworkers on the US East and Gulf Coasts was a major concern throughout September 2024. The potential strike could have had a significant impact on the global supply chain, yet lasted 3 days and was postponed till January, in hopes of a rectified contract. 
  • Hurricane Helene, which made landfall in Florida, caused disruptions at several ports in the region, leading to delays in cargo operations, damage to infrastructure, and potential impacts on supply chain. 
  • Air Frieght rates continued to rise in September 2024, driven by strong demand and capacity constraints. This was particularly evident as the peak season approached. Disruptions in ocean freight, such as rerouting around the Cape of Good Hope, also contributed to the increased demand for air cargo. 
  • The US government’s proposed changes to the de mnimis exemption for low-value imports could have significant implications for ecommerce retailers, particularly those operating out of China, leading to increased costs, compliance challenges, and potential disruptions in the supply chain. 

Ocean Freight Market Update

  • Container freight rates on major trade routes continued to fal significantly in September 2024.This decline was initially driven by a combination of factors. The demand for container shipping services decreased on several key trade routes, leading to a surplus of capacity. The addition of extra loaders and rerouting around the Cape of Good Hope helped to increase capacity, further contributing to the decline in rates. 
  • The looming threat of a strike at US East and Gulf Coast ports continued to create uncertainty in the market. While the strike was ultimately averted after three days, the mere threat of it has a significant impact on shipping rates and supply chain operations. Shippers and carriers were forced to adjust their plans and strategies in anticipation of potential disruptions. 
  • The balance between capacity and demand remained a key factor influencing rates. While additional capacity was added through rerouting and extra loaders, strong demand on some routes contrinubuted to fluctuations in raates. The overall trend was one of declining rates, but there were some exceptions where demand outpaced supply.  
  • With the peak season arrival window closing and capacity increasing, shipping rates to North Europe and the Mediterranean have decreased, while rates to the West Coast are showing mixed trends due to a potential strike and increased competition.

Global Schedule Reliability

Global Schedule Reliablity August 2024

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

Air Freight Updates

  • Airlines faced challenges acquiring new aircraft, leading to limited capacity and reduced availability for air cargo shipments. Delays in aircraft maintenance and repairs further constrained capacity and increased operating costs. Airlines were forced to adjust their networks and flight schedules to cope with rising demand, which could have resulted in longer transit times and higher rates. 
  • The continued growth of ecommerce led to a surge in demand for airfreight services, as online retailers on air cargo for faster delivery times. The approach of the peak season, with major shopping events like Black Friday and Cyber Monday, further intensified demand for airfrieght. 
  • Some shippers opted to shift their shipments from ocean freight to air freight to avoid potential delays and ensure timely delivery. 
  • Volcanic eruptions in regions like Kamchatka, Russia, disrupted key flight routes and led to load reductions for airlines operating in the area. Other natural disasters, such as typhoons or hurricanes, could have also impacted air cargo operations in specific regions. 
  • The market in North China showed signs of strengthening, driven by increased demand for e-commerce shipments and other traditional air cargo products. Other regions faced challenges due to various factors: Unstable political situations in some regions could have led to disruptions in air cargo operations, and economic downturns or slowdowns in certain regions could have reduced demand for air freight services. 



Freight Market and Amazon News

Proposed Changes to De Minimis Exemption Impact Ecommerce

Amazon empowered third-party sellers by allowing them to select their preferred trucking carrier when sending LTL and truckload shipments to its US fulfillment centers. 

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

India-US Rates on Hold

Container lines are portponing and reducing planned rate hikes for India-US routes due to weakening demand and declining rates. 

Source:https://theloadstar.com/india-us-container-gris-pushed-back-as-demand-falters/

Rough Seas, Rough Claims

Weather-related cargo damage and insurance claims are on the rise as container ships take the longer route around the Cape of Good Hope to avoid congestion. 

Source: https://theloadstar.com/insurance-claims-on-the-rise-with-box-ships-forced-to-brave-cape-weather/

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.