Container Shipping Rates Remain Elevated Amid Geopolitical Tensions and Disruptions
The Drewry World Container Index (WCI) continues to reflect high container shipping rates on all trade lanes. Ongoing disruptions are expected to keep spot rates elevated. Geopolitical tensions, particularly in the Middle East, are likely to keep rates high. Maersk has projected continued disruptions through the end of 2024, adjusting its revenue forecasts upwards. Furthermore, volatility in spot rates is increasingly influencing long-term rates, underscoring broader market uncertainties.
ILA Prepares for Critical Contract Negotiations and Possible Strike Action
The International Longshoremen’s Association (ILA) is gearing up for crucial contract negotiations, with potential strike action on the horizon. Meetings are set for September 4-5 in New Jersey to finalize contract demands and strategize for a possible coast-wide strike starting October 1, 2024, should an agreement with USMX not be reached by September 30. The ILA’s current contract, affecting approximately 14,500 port workers, is set to expire at the end of September. Negotiations have already faced setbacks due to unresolved issues with Auto Gate systems and pending audits on job impacts from new technology. The last coast-wide ILA strike occurred in 1977.
Prepare a contingency plan in case the ILA goes on strike, which could shut down East Coast and Gulf Coast ports and terminals on October 1, 2024.
Louis Wo, Operations Manager, New York
Potential Rail Strike in Canada Disrupts Intermodal Freight and Rail Traffic
In Canada, a potential nationwide rail strike is impacting intermodal freight movement, with Canadian National Railway (CN) reporting a 17% decrease in intermodal volume and an 8% overall decline in rail traffic from May to July. The labor dispute with the Teamsters Canada Rail Conference (TCRC) has also reduced volumes at Canadian ports. The Canadian Industrial Relations Board is expected to issue a decision by August 9, which may influence the situation further.
Port Congestion Intensifies Amid Red Sea Crisis and Increased Volumes
Port congestion remains a critical issue, amplified by the Red Sea crisis and increasing volumes. Danish carrier Maersk has reported delays in its AMEX service due to adverse weather and extended waiting times at Freeport, Texas. The backlog of containers is forming, with 33 vessels having docked at Freeport in the past 24 hours and 17 more expected in the coming month. Beacon’s latest report highlights severe congestion at key ports, including Durban, Ningbo-Zhoushan, Vancouver, Los Angeles, and Chittagong, with significant wait times reported at Charleston and Zhoushan.
USWC and USEC port congestion seems to be increasing with risk of Canadian rail strikes as well as USEC port strikes. Air freight is the best method of transportation to avoid long ocean transit times to USMW region.
Chris Elliston, Branch Manager, Cincinnati
Air Freight – Local updates from NNR USA Operations
Los Angeles LAX is seeing space tighten up inbound and outbound. Ground handling agents at LAX are facing labor issues, with staff taking vacations and Covid-19 resurging at times causing unexpected labor shortage at the airport.
Miami There is some congestion in regards to obtaining bookings to certain destinations in the LATAM region.
New York As per the Port Authority of New York and New Jersey Traffic Report, JFK airport reported a year-over-year 12-month cargo growth of 9.5% in June 2024 for international cargo tonnages. The total number of international flights also increased by 9.4%. Aside from the CrowdStrike incident on July 19, which led to flight delays and cancellations, there were no reports of any other major delays in July.
San Francisco Local market conditions have cooled off a bit since the beginning of July, for the most part imports are still showing moderate due to ground handling staff reductions, but cargo volumes are not overwhelming at the moment.
NNR will closely monitor evolving circumstances to ensure seamless service for our clients. We greatly value your ongoing support and are committed to updating you on any new developments.
For more information or assistance, please get in touch with our team of expert consultants.
