Table of contents
Topic of the week:
The current European drought has caused more issues as water levels fall across the Rhine and the Panama Canal. The river Rhine is one of the most important trade routes connecting Germany and other cities in Europe to the port of Rotterdam. It is being reported that water levels are falling to their lowest ever, and as the river becomes shallower, shipping costs rise. Less water means that carriers have less capacity. Supply decreases and demand for vessel space increases, resulting in companies passing surcharges over to their customers. Water levels along the Rhine have been consistently dropping year on year since 2021, and now in tandem with the drought, shippers may look to a modal shift to air freight to fulfil demand.
A critical trade route for the USA, the Panama Canal, is also experiencing continued drought conditions, leading to a build up of vessels, and reduced slots being offered by carriers for those looking to book vessel space. This drought has been affecting the Panama Canal since June and attempts to conserve as much water as possible from the Panama Canal Authority (PCA) has led to carriers only able to carry 4,500 TEUs (20ft Equivalent Units). Between the 8th August to the 21st, Panamax vessels have been ordered by the PCA to lower their slot availability for the time being from around 23 down to 14 per day. The PCA rolled out restrictions throughout July that meant vessels had to be 40% lighter in order to pass through the canal. This lead to vessels already in transit, having to offload a large amount of containers. Currently there are 154 vessels waiting for access to travel through the Panama Canal and wait times are predicted to be around 21 days. This is leading to carriers exploring alternative routes. These routes may mean that customers and business incur added fuel costs and time waiting for their shipments. Even those continuing to wait, means that transit times are increased, and costs are rising with the likelihood of these charges being transferred to customers.
After some uncertainty around the ILWU Canada and BCMEA deal proposition and multiple rejections, Canadian West Coast port workers have agreed to a deal. Members have voted to ratify the second tentative agreement. This should bring an end to any uncertainty and reduce the congestion that has been building up as a consequence of the port workers’ strike. Increased wages, benefits and training are all included in the new deal that was agreed upon last Friday.
Sea:
- Over the last two weeks China/East Asia to North America West Coast spot rates have increased by 22.4% from $1,365/FEU to $1,672/FEU according to Freightos data
- China/East Asia to North America East Coast spot rates have seen an incline over the last two weeks, increasing by 5.8% to $2,666/FEU.
- Global container spot prices have increased over the last two weeks, and are now sitting at $1,441/FEU, an 11.7% increase over the last two weeks, however, a 75.8% decrease from spot rates in August 2022 according to the Freightos Baltic Index (FBX)
- The USA HVUT (heavy vehicle use tax) taxes for 2023-2024 are due 31st August, meaning that those with a registered taxable highway motor vehicle must file IRS Form 2290. You can find more information on how to file the IRS Form 2290 here.
Air:
- Global Air Freight spot rates currently sit at $2.5, remaining steady according to the Freightos Air Freight Index (FAX)
- Europe to Northern America spot rates currently sit at $1.69 (100-3000kg), says FAX, decreasing by 6%
- Europe to Central Asia spot rates have fallen by 5.4% currently sitting at $2.27 (100-3000kg), says FAX
- Europe to Asia, Greater China spot rates currently sit at $1.46 (100-3000kg), says FAX, a 3.9% decrease
- Silk Way West Airlines have now added a weekly freighter route to their network that will transport a range of cargo, from general to perishables and even eCommerce. Freighter flights will travel to and from Los Angeles.
- Amerijet conducted its first flight from Miami Internal Airport to Felipe Angeles International Airport, Mexico on the 6th August. This signalled the start of the airline’s newest weekly connection.
That’s all for this week’s update…
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