Trends to Watch

[Air – Global](Data Source: World ACD/Accenture)

• From January 1-28, 2024, global international air cargo capacity increased by 10% compared to 2019.
• Over the last four weeks, global international air cargo capacity decreased by 4% compared to the four weeks prior.
• Air cargo capacity out of China and Hong Kong around Lunar New Year is expected to drop by 30-40% this year, in line with previous years.
• Yields for Transpacific and Asia-Europe routes have increased in the last weeks of January due to the Red Sea crisis and the anticipation of the Lunar New Year, even though average yields for January 2024 remain lower than those of January 2023.
• A consistent rise in air freight volumes has been observed over recent months, significantly fueled by strong e-commerce activity originating from the Asia Pacific region since the last quarter of the previous year, alongside a noticeable shift of some goods from sea freight to air and combined sea-air transport, attributed to recent disturbances in container shipping operations in the Red Sea.

[U.S. Exports]

• Inland rail yards and export loading points are seeing less, or increasingly spotty, equipment levels. Customers are advised to place bookings 3-4 weeks in advance of cargo ready date (CRD). If that’s not achievable, consider truck and transload to load at a coastal port to avoid ongoing equipment concerns.

[Ocean – FEWB]

• Asia-North Europe: the Red Sea crisis continues to impact freight market development. CMA CGM suspended Red Sea transits again until further notice due to security risks.
• With vessel delays back to Asia, equipment is getting tight prior to Lunar New Year departures. Most carriers are arranging container repositioning to get shipments moved as planned. We highly recommend shippers be flexible and accept container substitution to avoid further delay as well as arrange empty pick-up as early as possible. Carriers are offering extended origin free time to mitigate Lunar New Year impact.
• Demand is expected to remain flat for the second half of February. Carriers are further adjusting rates down to cater fresh cargo from the first half of February, preparing for rollpool to fill second half of February vessels. Even though massive void plans have been announced (WK08/09 cut by 30% in average), Ocean Alliance announced seven more voids, with three planned for February departure and the rest in March. We foresee more void plans will be released soon by the other two alliances.
• To mitigate the disruption of operational challenges (sailing schedule adjustment, vessel downsized, equipment shortages, rollover, etc.), shippers can explore premium services offered by liners with higher cost to get guaranteed space and equipment and to shorten delays.
• Asia-Med: Following North Europe, MED floating rates remained on the higher side. They are trending slightly lower from Week 06 onwards in a push to get more cargo to fill up ships before Lunar New Year and also rollpool preparation for 2H February onwards due to the weak demand and holidays in Asia.

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

Source from Flexport.com

Trends to Watch

[Air – Global](Data Source: WorldACD)

• January’s worldwide air cargo demand showed a significant increase compared to last year. This rise in demand was seen across all main global regions except for ex-North America traffic.
• Due to disruptions in the Red Sea, some cargo owners are moving Asia-Europe cargo from sea to air or sea-air (e.g. air to ocean conversions). This shift, combined with the effects of the later Lunar New Year in 2024 (February 10) and typical mid-January seasonal trends, contribute to the increase in air cargo demand.
• Despite major disruptions in international container shipping and a tripling of ocean freight spot rates from Asia to Europe, global air cargo rates remain relatively stable. However, ex-Asia Pacific air cargo rates had already risen in late 2023 due to seasonal and product-related demand factors.
• Forwarders are preparing for challenges in the next few weeks, including port delays and cargo build-up in Europe, as the booking window for air freight is closing ahead of the Lunar New Year. This situation may lead to increased reliance on air cargo.
• Comparing weeks 2 and 3 of 2024 with the same period last year, there’s a 6% increase in overall global demand, with notable increases from the Middle East and South Asia, Africa, and Asia Pacific. Average worldwide rates are 22% lower than last year but remain above pre-COVID levels. Air cargo capacity has also seen a significant year-over-year increase.

[Indian Subcontinent to North America – Ocean]

• Ocean freight rates continue to increase into the first half of February as Red Sea disruptions show no sign of mitigation. Vessels that were delayed getting to their destination, and then back to origin, due to diversions around the Cape of Good Hope have created capacity shortages. This short-term disruption is expected to be more challenging, while we expect some normalization in the longer term.
• Container deficits are carrier-specific, but recently there has been an increase in equipment issues being reported across many major wet ports and inland container depots.
• There are several service updates to report, including MSC’s removals of INDUSA (India → USEC) service which is resulting in a capacity crunch on their remaining INDUS EXPRESS service. MSC has also removed the direct Karachi, Pakistan port call which had just been rolled out in late December. OOCL/COSCO removed AWES/ISE service (Mundra → BOS/NY/ORF) due to operational cost increases from Cape of Good Hope diversions. By removing this service there is no longer a direct connection from India to Boston.

[TAWB – Ocean]

• Demand remains stable with no peak expected to occur in February. Carriers are still managing capacity based on the latest Red Sea developments. We expect capacity to be down by an average of 15-20%.
• Rates are expected to increase in February as several Red Sea-related surcharges go into effect on February 1. Indexes are expected to show the same in the next couple of weeks.
• The equipment situation in Europe is tightening (mainly in Germany and various locations in Eastern Europe). This is a direct consequence of transit time increases caused by the Red Sea situation.
• On-time performance decreased from 72% in July 2023 to 50% in December 2023 (based on Sea Intelligence data). This is quite normal during winter months as it is mainly caused by weather-related issues.

[FEWB – Ocean]

• The Red Sea crisis continues to impact freight market development. Vessels traveling back to Asia continue to face delays. Moreover, carriers have started announcing a lack of equipment availability ports ex-South China and some outports in Asia. Shippers should remain flexible and accept container substitutions to avoid further delays. Demand remains flat for the second half of February as the Lunar New Year approaches. As a result, carriers are adjusting rates to cater to fresh cargo from the first half of February and to prepare for roll pool to fill vessels in the second half of February, despite massive void plans (weeks 8 and 9 are expected to see a 30% decrease on average). To mitigate the disruption of operational challenges (sailing schedule adjustments, vessel downsizes, equipment shortages, rollover, etc.), shippers should explore premium services offered by liners with higher costs. This approach will help guarantee space and equipment and shorten delays.
• In other news, although the German rail strikes ended on January 29, there’s now a protest by German farmers blocking access to key ports which is impacting road transportation and imports/exports.
• Following North Europe, MED floating rates remain on the higher side despite trending slightly lower from week 6 onwards to fill up ships before the Lunar New Year. Additionally, roll pool preparation is now expected to take place in the second half of February onwards due to weak demand and holidays in Asia.

North America Vessel Dwell Times

Source from Flexport.com

Trends to Watch

• [Air – Global] Air cargo volumes are rebounding in early 2024, surpassing previous years’ trends. Global air cargo tonnages witnessed a strong recovery in the second week of January 2024, rising by 24% compared to the previous week, countering the typical end-of-year slowdown. This rebound is notably more pronounced than the same period in the previous year, with a marked increase in cargo from Asia Pacific and Middle East & South Asia to Europe, potentially influenced by shipping disruptions in the Red Sea. Despite an overall 7% decrease in global tonnages compared to the preceding two weeks, Middle East & South Asia saw a 2% rise, while major intercontinental lanes experienced significant declines. Year-on-year data shows a global increase in demand by 2%, with a notable 6% surge ex-Asia Pacific, despite lower rates that remain 24% below the levels from the same time last year but 31% above pre-COVID levels. The increase in tonnages to Europe from Asia Pacific and Middle East & South Asia did not lead to higher average prices, indicating a complex interplay between demand, capacity, and pricing in the global air cargo market.
• [FEWB – Ocean] Asia-North Europe: The Red Sea Crisis continuously impacts freight market developments. Rates remain on the higher side. Over the past few weeks, demand has been strong and with Lunar New Year approaching, a slowdown in demand in Asia has ocean carriers reducing freight rates. Two more void plans announced by carriers led WK08/09 capacity to be cut by more than 25% on average. As a result of vessels rerouting via the Cape of Good Hope, vessels and containers face longer transit times. Expect a shortage of empty containers in Asia in the coming weeks, especially outports. To mitigate the disruption of operational challenges (sailing schedule adjustment, vessel downsized, equipment shortages, rollover, etc.), shippers can explore premium services offered by liners with higher cost to get guaranteed space and equipment and to shorten delays. German Rail Strike: There’s another strike on the German railway infrastructure of DB InfraGO AG. From January 23, 2024 6:00 PM CET to January 29, 2024, the entire traffic on the German infrastructure will be affected. The end of the strike is announced for January 29, 2024, at 6:00 PM CET. Please stay close to the situation and plan delivery if any. Asia-Med: Following North Europe, MED floating rates remained on the higher side. Rates started trending slightly lower in WK04 in a push to get more cargo to fill up ships before Lunar New Year and also rollpool preparation for WK07 onwards due to the weak demand and holidays in Asia.

North America Vessel Dwell Times

Trends to Watch

• [TAWB – Ocean] Market demand has remained relatively stable in January with no spikes expected until March at the earliest. While the total vessel filling factor is still not at 100%, it has slightly increased as a direct result of the winter blank sailing program and some carrier capacity cuts. Overall capacity remains high despite an anticipated 20% decrease on average for January and February due to blank sailings. We expect carriers to pull more capacity in the coming weeks to help with the Red Sea situation. We’ve already seen members of the Ocean Alliance and 2M (Maersk and MSC) doing this. As a direct impact of the Red Sea situation, rates for vessels traveling on Transatlantic routes have started to increase, and are expected to increase further in February when most carriers announce GRI/PSS and emergency surcharges. In other news, equipment shortages have started to impact Austria and some areas of South Germany as reported by a few shipping lines. The full impact is likely to be seen at later stages and will also depend on the outcome of the current German railway situation.
• [FEWB – Ocean] Asia-North Europe: Market demand is moving up for the second half of January and all ships are filling up, will roll pool by carriers in progress for the coming weeks. Week 3 spot rates slightly increased due to the Lunar New Year rush and week 4 spot rates are stabilizing at high pre-Lunar New Year levels. As the Red Sea crisis continues, it’s now estimated for a vessel to take 2-4 weeks (round trip) depending on the destination. As a direct impact, Ocean Alliance and 2M announced 15+ void plans for February with more to be expected from THE Alliance soon. Equipment shortages can be expected in the coming weeks if the situation remains the same. German Strike: The strike ended on January 12 but no agreement was reached. We expect there will be another round of strikes as a result. No immediate impact is expected. Gemini Cooperation: Maersk and Hapag Lloyd announced an official cooperation agreement that will start in January 2025. More to follow on the actions of additional carriers.
• [MED Trade] Following North Europe, MED spot rates for the second half of January are increasing in week 3. Week 4 spot rates are expected to be slightly lower as carriers are pushing cargo to fill up ships before the Lunar New Year.
• [U.S. Exports] As the Red Sea situation continues, U.S. exporters shipping globally can expect equipment shortages due to mislocated containers. We highly recommend booking shipments 4+ weeks in advance to ensure Expected Quantity (EQ) can be secured.
• [Air – Global] The first week of 2024 saw a continued decline in worldwide air cargo tonnages, following a typical slump in the latter half of December. Preliminary data for week one shows a 6% week-over-week drop in global air cargo tonnages, with significant declines noted particularly in shipments from the Asia Pacific to North America and the Middle East & South Asia, and within the Asia Pacific region. This year’s decline in tonnages during the first week contrasts with the stability observed in the same period of 2023, potentially influenced by the inclusion of January 1, a holiday, in this year’s week one calculation. On a two-week comparison basis, the total tonnage for the last two weeks of 2023 and the first week of 2024 was down 28%, with average rates dropping by 5% and capacity decreasing by 8%. Despite these declines, global tonnages for the same period were around 3% higher year-over-year, with worldwide average rates currently 19% below last year’s levels but still 30% above pre-COVID levels, according to World ACD.

North America Vessel Dwell Times

Source from Flexport.com

Trends to Watch

• [FEWB – Ocean] Asia-North Europe: Market demand is increasing in January and all ships are filling up. Spot rates for the second half of January are expected to continue to increase due to the Lunar New Year rush and the Red Sea threat. Transit times for vessels rerouting around the Cape of Good Hope are currently 2-4 weeks (round trip) depending on the ship’s final destination. Hence, there will be more blank sailings expected in February coupled with a spot rate level similar to January, as equipment shortages can be expected. In other news, German railways will face a strike again from January 10 through January 12. The strike of the Trade Union of German Locomotive Drivers GDL is planned as follows:
  • GDL members at Deutsche Bahn AG, Transdev, and City Bahn Chemnitz have been asked to stop work from January 10, 2024 at 2 AM to January 12, 2024 at 6 PM. The work suspension at DB Cargo begins on January 9, 2024 at 6 PM.
  • Most rail carriers and their drivers are not organized in the GDL, but as the infrastructure is also affected, consequences are not known at this stage, but interruptions are to be expected. We also anticipate there will be an additional Demurrage / Detention charge incurred between January 10 and January 12, affecting deliveries in weeks 3-4 (if the strike does not extend beyond January 12). However, if the strike goes further, larger interruptions (and affected areas) can be expected.
• [MED Trade – Ocean] Following North Europe, MED spot rates for the second half of January are climbing up due to similar reasons as North Europe trade.

Please reach out to your account representative for details on any impacts to your shipments.

Source from Flexport.com

Trends to Watch

• [Air – Global] Global air cargo tonnages have rebounded faster than in 2022 following the Thanksgiving holiday in the U.S., with a notable increase in tonnages and global average rates. Particularly, rates ex-Asia Pacific continue to rise strongly, especially trade lanes to North America and Europe. Year-on-year, global cargo volumes are up, driven primarily by a significant increase ex-Asia Pacific, while available capacity has also substantially increased across various regions compared to 2022. Despite a year-on-year decrease in worldwide average rates, they are still considerably higher than pre-COVID levels, reflecting ongoing strong demand and a market recovery in the air cargo industry.
• [FEWB – Ocean] Market demand is moving up in December and ships are filling up. As the rate gap between long-term deals and the spot market is widening, the long-term deal space was largely impacted by the carriers due to serious bleeding over the past few months. Thus, a significant peak season surcharge is expected before the Lunar New Year. Blank sailings in December are less than 10% per week (excluding the service suspension of FE5 by The Alliance that impacts the Southeast Asia export). We expect rates to continue climbing as we approach the second half of December and there is a high likelihood that another wave of GRIs effective first of January will reflect the pre-Lunar New Year rush demand. In other news, the Antwerp operation was partially impacted due to last week’s strike (roughly 49 ships were impacted as a result), which has already resumed full operation this week. Plus, ONE Orpheus (FP1 service calling Asia-NEUR at the moment) struck a bridge during its transition in the Suez Canal. The inspection has finished and the vessel is currently at the shipping yard for temporary repair. MED trade: Following North Europe, MED GRI is also thriving in December supported by the strong demand. However, space is very tight at the moment as we observe a cargo rush before the Lunar New Year. As in North Europe, there is a high likelihood that another wave of GRI effective first of January will reflect the pre-Lunar New Year rush demand. Similarly, the EU Emissions Trading System is going to apply effective the first of January, but so far we don’t see any mitigation of this surcharge by carriers.

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

This Week In News

Supply Chain Coalition Presses Background Check Reform
A coalition of supply chain stakeholders, including the American Trucking Associations (ATA), is urging Congress to quickly pass the Transportation Security Screening Modernization Act. The legislation aims to eliminate redundant background security checks for essential workers such as truck drivers, creating a streamlined, one-stop process for obtaining credentials like the Transportation Worker Identification Credential, Hazardous Materials Endorsement, and TSA PreCheck. Approximately 140 signatories, representing various sectors, argue that subjecting workers to duplicate checks for different credentials from the same agency is inefficient and burdensome.

Carriers Pushing Rate Hikes Ahead of New Year Service Suspensions
To improve rates on the Asia-Europe trade route, Hapag-Lloyd and CMA CGM have increased their FAK rates for 40ft containers from Asia to North Europe to $3,000 starting January 1, 2024. Despite this, the Drewry WCI Asia-North Europe rate remains at $1,343 per 40ft. Hapag-Lloyd’s rate for West Mediterranean ports will be $3,200, $200 higher than CMA CGM’s proposal. Other carriers are expected to follow suit.

The Logistics Sector Was Weak in November, but That’s Not Necessarily Bad News
The latest Logistics Managers’ Index reveals a weakened state of the shipping industry in November, with the index experiencing its most significant fall since April 2022. Unlike the concerns around excess inventory last year, the current weakness is less alarming as it stems from reduced inventory levels due to heightened consumer buying during events like Thanksgiving, Cyber Monday, and Black Friday. Experts suggest that as supply chains stabilize, retailers are maintaining leaner shelves, contributing to lower warehousing storage costs. The emphasis is now on improving efficiency in the logistics sector through investments in technologies like electric delivery vehicles and artificial intelligence for enhanced inventory management, rather than expanding inventory levels.

Source from Flexport.com

Trends To Watch

• [U.S. Exports – Ocean] Routing changes are happening related to the bypassing of the Panama Canal for some key services from USEC/U.S. Gulf to Asia.
• [TAWB – Ocean] The pandemic introduced a level shift in favor of MED-USEC when it comes to the total port-pair connections, while not having any negative impact on the total distinct connections. New Orleans, for example, is completely cut off from direct Europe services, while Saint John is heavily introduced as a direct port call. Spot rates continue to be under pressure and are now heavily below the 2019 levels. Weak demand and over-capacity continue to impact the sustainability of this trade. From now until the end of the year, there will be more blank sailings introduced in the market; average capacity will decrease on average by 25-40% between WK52 and WK2 2024. The expectation is for some rate action to be taken by carriers to alleviate the pressure. In other news, the Panama Canal situation will have an impact on Transatlantic routes to West Coast ports but at a much smaller scale compared to Trans-Pacific. At the moment only two shipping lines have announced a Panama Canal surcharge even though the current vessel delay is only 1-2 days on top of published proforma transit time.
• [FEWB – Ocean] GRI Implementation: With freight costs remaining on the lower side, liners are implementing General Rate Increases (GRI) to push up the rate even when there’s no significant cargo rush or general capacity issue; For the first half of December, liners are trying to push up the rate by $300-500/FEU, and another $400-600/FEU for the second half of December; Prior to Christmas and the New Year holidays, we’re expecting there might be a slight cargo rush for some specific commodities, and it’s also the last chance for Liners to hold the rate into 2024. Capacity/Deployment adjustment: With the THEA FE5 services suspension, the carrier CMA-CGM in Ocean Alliance also adjusted their FAL1/FAL3, taking out Cai Mep and some port rotation aiming to expedite the first calling port ETA as well as maximizing capacity via other POL; 16-18% capacity was cut as a result. With all the changes, for South East Asia (especially Vietnam and Thailand), capacity is getting tight, but compared to the export volume in 2023, the impact is limited. We foresee it will cease soon in a couple of weeks and eventually get back to normal. If there is no significant demand increase, we may see more last-minute blank sailings announced, especially prior to/post-Lunar New Year.
• [Air Freight – Global] In week 47 of 2023, worldwide air cargo experienced a 3% decrease in tonnages and a 2% increase in global average rates compared to the previous week, with a less severe Thanksgiving-related decline in North America than last year. Tonnages and rates varied regionally, with notable decreases from North America to Europe and Asia Pacific, and increases from ex-Africa to Europe and ex-Europe to Central and South America. Year-over-year, global volumes are 2% higher, with significant increases in capacity from several regions (particularly Asia Pacific) and decreases in tonnages from North America and Europe. Despite current average rates being 21% lower than last year, they remain 42% above pre-COVID levels.

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

The Week In News

Atlanta Becomes Casualty of Imports Returning to West Coast
Over the past year, Atlanta’s share of the total U.S. freight market volume has decreased by more than 11%, while the Ontario, California, market has seen a recovery of over 14% in its outbound trucking market share. Supply chain shifts and a cost-effective transportation market are key factors driving this trend. During the pandemic, overwhelmed West Coast port and rail infrastructure led importers to divert shipments to Eastern ports. However, recent challenges, including drought affecting the Panama Canal and Middle East conflicts disrupting the Suez Canal, are prompting importers to return to the Los Angeles and Long Beach port complex.

OOCL Box Ship in Red Sea Hit by Rocket Fired From a Drone
Container vessels in the Red Sea region face increased risks following an attack on an OOCL ship by a Houthi drone. The 4,250 TEU Number 9 issued a distress call after being hit by a rocket near the Yemen coast, resulting in engine damage and water ingress. Houthi rebels ordered the vessel to dock at the port of Hodeidah, where another captured ship is reportedly held, but the damaged engine prevented a change of course. The vessel, part of the Ocean Alliance’s Asia-Mediterranean service, continues its schedule despite the incident.

Manufacturing Down Again in November Amid Low Orders: PMI
Manufacturing orders in the U.S. remained soft in November, according to the Institute for Supply Management’s Purchasing Managers’ Index (ISM), which held steady at 46.7%, indicating economic contraction. The ISM Manufacturing Business Survey Committee noted that the industry is in a “low-end” trough with depleted inventories and expects it to remain subdued, especially in terms of new orders. S&P Global’s PMI index was slightly more positive at 49.4, down from October’s 50.0, attributing the decline to weak demand and low stock levels.

Source from Flexport.com

Trends To Watch

• [U.S. Exports – Rail] Inland Rail Ramps are having less and less equipment available due to a lack of imports into the midwest. It’s recommended to book 2-3 weeks prior to the Cargo Ready Date (CRD) to ensure a smooth loading and booking experience.
• [ISC – Ocean] November rate levels have been extended through the end of December. Although capacity is constrained due to blank sailings to the U.S. East Coast and high utilization to the U.S. West Coast, market volume remains soft. The expectation is that these rate and volume levels will carry over into Q1 which is India’s traditional peak season. In other news, Q1 supply and demand functions will likely lead to increased rates. There are no major operational issues in the Indian Subcontinent, but we are monitoring the situation in the Middle East and how that may affect shipments moving through the Suez Canal. As of now, there is no impact on ISC cargo moving west via the Suez.
• [TPEB – Panama Canal] Continued drought conditions are causing more restrictions on vessel transits. There are 32 transits a day, down from a normal of 36, and the canal is planning to incrementally reduce that number week over week to a projected 18 per day by February 1. While container traffic has not been impacted to date, further reductions will begin to cause impacts. Carriers are assessing the possibility of adding vessels to their via Suez services or redirecting their via Panama services. Carriers are also enforcing weight restrictions of 8 tonnes on average for containers moving via the canal. Moving via Panama is still the fastest route to the U.S. East Coast. Alternative routings are via Suez services, or via the U.S. West Coast with rail.

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

The Week In News

Biden Will Convene His New Supply Chain Council and Announce 30 Steps To Strengthen U.S. Logistics
President Biden hosted the first meeting of his supply chain resilience council on Monday, November 27, where he announced 30 new measures aimed at enhancing access to medicine, economic data, and other programs related to the production and transportation of goods. The initiative, led by the White House National Economic Council, seeks to address supply chain challenges that contributed to heightened inflation during the U.S. post-pandemic recovery in 2021. The actions include improving the federal government’s ability to monitor and assess risks to supply chains through the sharing of data among agencies via new tools from the Commerce Department in partnership with the Energy Department on the supply of renewable energy resources.

Record Online Shopping Fuels Another Massive Black Friday
Holiday shopping on Black Friday generated a record $9.8 billion in eCommerce sales in the U.S., up 7.5% from last year, with $5.3 billion of that total (or 79% of all shopping traffic, including browsing+buying) coming from mobile devices. More American consumers have turned to buy now, pay later tools to extend their holiday budgets, up 47% from last year for a total of $79 million––a sign of resilience in the post-Covid economy for the fintech sector. Analysts expect eCommerce sales to continue through Cyber Monday, with an estimated $12 billion in sales, a 5.4% increase over last year.

‘Stay Cautious’ Warning to Carriers After Suspected Drone Attack on Box Ship
Israel-linked ships are facing increased risks in the Red Sea as targets for Iran-linked factions amid the ongoing conflict in Gaza. Over the weekend, three vessels tied to Israel experienced incidents: a suspected drone attack targeted the CMA CGM Symi, a container ship owned by Israeli billionaire Idan Ofer; a Zodiac Maritime tanker was reportedly boarded by Houthi rebels and diverted to Hodeida, and Iranian warships demanded a Japanese bulk carrier change course. The incidents highlight escalating tensions in the region and pose challenges for shipping companies operating in the area.

‘Dire’ Scenario for Shipping Lines More Likely as Spot Rates Fall Back
As the global composite of Drewry’s World Container Index (DCI) fell 6% in the past week, next year’s container annual contract rates are expected to reset much lower than this year’s, suggesting negative financial effects on liners as shipping lines’ attempts to use general rate increases (GRI) in November to improve their negotiating hand for annual contract resets have failed. If Asia-Europe annual contracts reset in the vicinity of Q4 spot rates starting in January, and if Asia-U.S. contract rates don’t improve—or fall further—when they reset in May, container lines would face steep losses in 2024, particularly as costs are up 25-30% versus pre-COVID levels.

Source from Flexport.com