International Shipping and Logistics Market Update - Week 48/2024
The Drewry World Container Index for week 48/2024 shows a 2% decline from the previous week, dropping to $3,331/FEU. Despite this drop, the rate remains 134% higher than the pre-pandemic 2019 average of $1,420/FEU.
1. Shipping Route: Asia - North America
For week 48/2024, ocean freight rates from Asia to the North American West Coast continued to decline sharply, reaching $4,627/FEU—a 2.38% decrease from the previous week and a 10.93% drop compared to the previous month, according to Xeneta data. The issue of capacity shortages from Asia to the U.S. West Coast has improved, thanks to additional vessels deployed at the end of November, leading to lower freight rates. However, rates from Asia to the U.S. East Coast and Gulf Coast remain steady as most services are fully utilized through mid-December.
Rates from Asia to the West Coast are being extended by carriers into early December, while preparations for a General Rate Increase (GRI) on East Coast routes are set to take effect on December 1, pending final confirmation. Peak Season Surcharges (PSS) may see a reduction for West Coast routes starting December 1, while there are currently no changes for East Coast or Gulf Coast routes. Ongoing negotiations with the International Longshoremen's Association (ILA) and potential tariff actions continue to put pressure on freight rates and capacity for these routes.
2. Shipping Route: Asia - Europe
Freight rates from Asia to Northern Europe in week 48/2024 fell to $4,099/FEU, down 0.99% from the previous week, but up 26.83% compared to the previous month, according to Xeneta data. Demand saw a slight uptick in the second half of November due to expectations of a GRI in December, and it is projected to stabilize by mid-December as the European holiday season approaches.
Carriers have announced December GRI levels between $6,000–6,200/TEU, with adjustments based on vessel forecasts. A downward adjustment is anticipated. The Shanghai Containerized Freight Index (SCFI) dipped slightly by $31/TEU in week 48, but with the December GRI taking effect, SCFI is expected to rebound in weeks 49 and 50.
Equipment shortages remain sporadic at major Chinese ports but are manageable. Shippers needing guaranteed space and adherence to scheduled Estimated Time of Departure (ETD) may consider premium services offered by carriers.
3. Shipping Route: North America - Asia
Freight rates from the North American West Coast to Asia dropped by 0.86% in week 48/2024, landing at $691/FEU. This marks a 1.14% decrease compared to the previous month, based on Xeneta data.
4. Shipping Route: Northern Europe - Asia
Freight rates from Northern Europe to Asia decreased slightly to $349/FEU in week 48/2024, reflecting a 0.57% decline from the previous week and a 9.35% drop from the previous month.
5. Conclusion
Real Logistics observes that the global shipping market in week 48/2024 continues to experience volatility, particularly on routes from Asia to North America and Europe. The decrease in freight rates from Asia to the U.S. West Coast reflects an easing of capacity issues, yet the potential for price increases on the East Coast routes due to the upcoming General Rate Increase (GRI) creates uncertainty. Businesses should remain vigilant, anticipating fluctuations in surcharges and prepare accordingly to optimize logistics costs.
In terms of Asia-Europe routes, while rates are lower this week, the projected GRI in December suggests an upward shift in pricing. For shippers, it is crucial to assess current market trends and take advantage of premium services when necessary to secure space and meet deadlines, especially amid sporadic equipment shortages at Chinese ports. Real Logistics is prepared to help clients navigate these shifts and make strategic adjustments for cost-effective operations.
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