May Blank Sailings and Early Peak Season Drives Rate Increases
Welcome to our latest Market Watch update, where we dive into the dynamic world of sea and air freight. As we enter May, the landscape is shifting with the implementation of blank sailings and early signs of peak season activity. From potential rate increases driven by demand to updates on Panama Canal transit, we cover the key developments shaping the industry. Join us as we explore the impact of blank sailings, potential strike actions, and port operations on both coasts. Additionally, we delve into the state of air freight, where ecommerce continues to drive volume growth. Stay tuned for valuable insights and recommendations to navigate these evolving trends in the freight market.
Sea Freight
Asia to North America
May Day celebration in Asia and across most of the world encouraged carriers to implement blank sailings. New contracts taking effect May 1st plus what many are calling a restocking for retailers (early Peak) is creating demand and potential overbookings for first half of May. There is potential for another GRI of $1000 as of 5/14. It seems that rerouting around Cape of Good Hope is absorbing most of the new build capacity where overall capacity in the market is down 4% year-over-year.
Anticipate PSS will apply to NEW fixed rate contracts to narrow the wide gap between spot and fixed rate market. Keep in mind carriers will prioritize higher paying cargo.
26 Blank Sailings scheduled for May
Potential for strike on Canadian west coast is causing lots of rerouting and demand for USWC sailings.
Panama Canal Update
The Panama Canal Authority (ACP) announced that starting in the second half of May, it would allow 31 ships to transit the canal daily, up from 24 ships each day during the first half of May. The number of ships allowed to transit will increase to 32 by the start of June. The canal remains restricted to ships with a 44-foot depth, but more large ships will be able to transit.
Baltimore Port
To resume normal operations by end of May.
LA/Long Beach Ports
Rail container dwell times at the Los Angeles-Long Beach terminals have increased steadily this year, from 4.2 days in January to 6.26 days in February and 7.02 days in March, according to the Pacific Merchant Shipping Association (PMSA).
Asia to Europe
Vessel utilization is high into Europe. Markets anticipate further bullishness as restocking of inventory begins as well as container equipment shortages, continued diversions around Southern Africa and adverse weather conditions. We are also hearing that NAC containers are being rolled in favor of higher spot market freight No surprise here that carriers are prioritizing profits over contracts.. We anticipate carriers will attempt another GRI for May 14th.
Air Freight
Asia to North America
Ecommerce continues to support year on year volume growth across both markets Asia to Europe & North America.
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– The CargoTrans Team