Ben Skinner’s Post

A perfect storm in global trade is creating a shipping container capacity crunch, fueling a sudden and surprise spike in ocean freight rates. Contact CLN Worldwide to get a quote to ensure you are getting the most competitive ocean spot rates. What is causing this? Global Shipping Crunch: A confluence of factors is creating a capacity crunch in shipping containers, leading to a spike in ocean freight rates. Causes: Peak shipping season, longer routes to avoid the Red Sea, bad weather in Asia, and carriers skipping ports or reducing port times. Consumer Impact: Higher shipping costs coincide with the transport of back-to-school and holiday goods, leading to increased consumer prices. Rate Increases: Spot rates, especially from the Far East to the U.S., have risen sharply, with some rates doubling compared to the previous month. Capacity Issues: Insufficient vessel space and container shortages, particularly for 40-foot containers in China, are exacerbating the situation. Historical Comparison: Current conditions are reminiscent of the chaos during the COVID-19 pandemic, with some freight forwarders paying premium rates for space guarantees. Future Outlook: Rates are expected to rise further in June, with general rate increases and premium charges by major carriers. Strategic Adjustments: Logistics managers are advancing peak season shipping to June to mitigate potential delays from labor disputes and ensure timely delivery of seasonal goods. #oceanfreight #oceanshipping #globallogistics #imports #seafreight #oceancontainer https://lnkd.in/e5PSFtPS

The container shipping market is indeed facing a complex and volatile situation. The baseline fundamentals indicate a mismatch between demand growth and fleet expansion, leading to overcapacity. This overcapacity, while partially mitigated by slow-steaming practices, is expected to be exacerbated by the introduction of an additional 1.5 million TEUs of capacity in the remainder of 2024. The Red Sea crisis has further complicated the scenario, as rerouting around Africa has stretched the existing overcapacity to its limits, leaving no room for further disruptions. Moreover, the increasing port congestion in Asia and the Western Mediterranean is adding to the strain, with ports experiencing backlogs and delays due to the unexpected shifts in shipping routes and volumes. The shipping industry is currently navigating a complex landscape, marked by a sudden and unexpected surge in demand, which has led to capacity shortages reminiscent of the early pandemic period. This spike in demand may be attributed to an early peak season, driven by shippers' concerns over potential disruptions from labor negotiations on the US East Coast and rerouted services around Africa. The situation is further complicated by the fact that air freight has not experienced a similar increase, suggesting that the demand spike is not due to a consumer buying rush. If the market remains in this heightened state, it could signal a sustained boom, leading to significant rate increases. Conversely, should the Red Sea routing reopen, it could alleviate the current capacity strain and lead to a sharp decrease in spot rates, as the market adjusts from the overcapacity issues faced at the end of 2023. Shippers are thus faced with the challenge of planning their supply chains and managing freight budgets amidst these volatile conditions, with the potential for either continued rate spikes or a dramatic drop in costs. The uncertainty of the situation is compounded by the high rates already observed in the market, with offers exceeding $10,000 per FEU from Asia to the US East Coast. #containershipping #exports #redsea #spotrates #supplychains #freight #shippers

This is a very informative analysis about current Shipping industry status: “… Shippers are thus faced with the challenge of planning their supply chains and managing freight budgets amidst these volatile conditions, with the potential for either continued rate spikes or a dramatic drop in costs. The uncertainty of the situation is compounded by the high rates already observed in the market, with offers exceeding $10,000 per FEU from Asia to the US East Coast.”

A recent report reveals a surge in demand for ocean freight container shipping, reaching a record high of 15.9 million TEU shipped globally in May, surpassing the previous peak in 2021. This increased demand, particularly on major routes such as those from China to Europe and the US, has resulted in significant rises in spot rates and posed challenges in supply chain logistics. Spot rates on these routes have seen substantial increases, rising nearly 150% to North Europe and over 130% to US coasts since April. Globally, TEU-miles have increased by 17.9% in 2024, driven by longer voyages around Africa, exacerbated by the conflict in the Red Sea. #MarketNews #FreightRates #Shipping #SpotRates #SupplyChain #Logistics

🚢 Ocean Freight Alert: Rising Spot Rates and New Surcharges to Europe. The ocean freight industry is currently facing a challenging period with spot rates continuing to rise and new surcharges being imposed, significantly impacting shipments to Europe. 🔹 Spot Rate Increases: Recent data shows spot rates on the Shanghai-Rotterdam leg increased by 2% to $3,103 per 40ft container, and on the Shanghai-Genoa leg by 3% to $3,717. Rates from Asia to North Europe have been reported to breach $10,000 per 40ft container. 🔹 New Surcharges: Carriers are implementing various new surcharges, including Peak Season Surcharges (PSS) and Freight All Kinds (FAK) rates. For example, Maersk and CMA CGM have announced substantial rate increases and surcharges on Europe routes. 🔹 Capacity Constraints and Port Congestion: Equipment shortages and port congestion in Asia, particularly at ports like Shanghai and Ningbo, are exacerbating the situation. Shippers are facing delays and increased costs as vessels wait longer to berth. 🔹 Market Outlook: While demand remains strong, driven by early peak season volumes, the continuation of these elevated rates will depend on how long the demand persists and how quickly new capacity can be brought online to relieve pressure. 📈 Implications for Shippers: Companies shipping goods to Europe should prepare for higher logistics costs and potential delays. It's crucial to stay informed about carrier announcements and market trends to mitigate the impact on supply chains. For more detailed analysis, read the full article on The Loadstar, link in comments. Stay proactive and plan ahead to navigate these turbulent times in ocean freight. #SupplyChain #Logistics #OceanFreight #Shipping

Ocean freight container spot rates have risen sharply on the world’s top trades since the start of May, prompting speculation that the peak season has arrived early in 2024. The biggest rise comes on the Far East to North Europe trade which increased by 30% from 1 April (USD 3349) to stand at USD 4 343 per FEU on 16 May. This is 198% higher than 12 months ago (USD 1456). From the Far East into the US West Coast, rates have increased by 29% since the start of April (USD 3456) to stand at USD 4 468 per FEU on 16 May. This is 214% higher than 12 months ago (USD 1422). Demand reached record levels in Q1 2024, up by 9.2% compared to Q1 2023, and comes at a time when the Red Sea situation is putting increased pressure on shipping capacity. But significantly, this is all taking place while the chaos of port congestion and lack of available capacity is also a huge impact for shippers from Asian countries. We hope the situation start improving from August.. #shipping #supplychain #logistics #sourcing #chemicals #Malaysia #Indonesia #asia

🌊🚢 Navigating Trans-Pacific Shipping Dynamics The spot ocean freight rates from Asia to the US West Coast appear to have peaked recently after climbing steadily since May. Amid general rate increases, rates have now eased slightly to $8,000 per FEU, though still double the levels seen earlier this year. Meanwhile, shipping capacity to the US East Coast remains tight as retailers accelerate shipments for the fall and year-end holidays earlier than usual. The introduction of new services and reduced congestion at Asian ports have played pivotal roles in stabilizing West Coast rates, while carriers continue to negotiate peak season surcharges with varying success. As we navigate these fluctuations, it's clear that the resilience of global supply chains remains crucial amid ongoing challenges. Stay informed and adaptable to effectively manage your logistics strategies in this dynamic environment. #ShippingIndustry #Logistics #SupplyChainManagement #GlobalTrade

Global demand for ocean freight in May surpassed the peak COVID levels. Global demand for ocean freight surged to a record 15.94m TEU in May, surpassing the peak COVID levels. This spike, driven by high exports from China, is creating significant pressure on supply chains already strained by diversions and port congestion. The industry now faces uncertainties about the traditional Q3 peak season, with shippers wondering if current record volumes will lead to a slowdown. The resilience of global shipping networks is being tested under these challenging conditions. https://lnkd.in/gaNyyAtH #Freightforwarding #supplychain #followme #oceanfreight https://lnkd.in/gaNyyAtH

When a collective decision to bring forward orders hits a supply chain already teetering on a ledge of uncertainty and disruption, some chaos is bound to happen. Welcome to Covid Jr. As always, Peter Sand of Xeneta sums up the state of the market perfectly in this article. Clearly the overwhelming choice in the importers' bag of tricks to better secure and stabilize their supply chains was to order a bit more and most importantly, earlier. Welcome to Peak Season 2024. I recognize the reaction of the US and Canadian importers; the easy choice was to order early. The only problem with the decision is that this was what everyone else did as well. So, now we sit with an early peak season just as the Red Sea disruption has finally come to a head. When this first reared its ugly head in January, many warned that the shift around Africa and that first jump in rates, was just the beginning. Congestion, container shortages, and capacity tightening was almost inevitable. And now with peak season volume flowing, it is indeed "fanning the flames" of this market. The shadows of Covid are rising and with it, once again, are carriers' profits. This time round, however, the lessons learned in Covid Sr are front of mind and actions taken to maximize profits have come out fast and furious. Though the good news might be that this will be a much shorter cycle than its predecessor, the bad news is that there is no lag time to the pain. Carriers were quick to implement additional surcharges, cut allocations, limit lower rated bookings and steer volumes to the still escalating spot market. There are very few places to hide right now. If you want your cargo to move, be prepared to pay more. A lot more. #carriers #transpacific #spotrates #spotmarket #oceanshipping #oceanfreight #importers #peakseason

While the first half of the year has brought serious challenges such as port congestions and supply chain disruptions worldwide, chances of recovery and growth in U.S. container traffic remains assuring for the future.