Topic of the week:
This year has been one full of extreme weather conditions, that are still ongoing, and continue to affect the freight industry. From wildfires to droughts, and now the heating up of the ocean, shippers may have cause for concern.
As we all know by now, the Panama Canal has been greatly affected by the ongoing drought since June, causing massive pileups of over 150 vessels awaiting passage. Weight restrictions, in order to pass through the canal, have meant that containers are being offloaded and delayed, even stuck at ports. Many shippers are opting to detour or find alternative shipping routes, causing surcharges and rates to hike. It now seems that the drought has meant west coast ports are now filling up. Last month New York was crowned the top port for US import volume. This mixed with the new labour contract vote by the ILWU and west coast dock workers could all aid in a resurgence for west coast ports.
Research has shown that the temperature of the ocean has been reaching record-highs week-on-week. The effects of global warming could cause more extreme weather conditions that pose a risk to shippers, vessel owners and ports etc. EU’s Copernicus Climate Change Service has shown that the Atlantic Ocean has seen a surface temperature increase of 1°C since its highest in 2020. Higher temperatures means rougher sea conditions, with the increased possibility of weather hazards such as hurricanes and rogue waves that can reach up to 30m. The warming of the ocean causes shifts in weather patterns which could include heavier rainfall and even snowstorms, as well as droughts in areas where you may not have expected. Sudden storms are also a risk, and North Pacific winters have seen containers spill overboard many times in recent history. Extreme weather conditions not only mean more risk of cargo loss for cargo owners, but also extended or delayed transit times, higher costs, and even detention fees that could fall back on the consignee.
It is clear that reducing emissions and finding greener ways of shipping is key for the future of the freight industry, so be sure to keep up to date with the latest developments. You can find more in previous editions of the Freight market Update.
- Over the last two weeks China/East Asia to North America West Coast spot rates have increased by 15.7% from $1,672/FEU to $1,935/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 12% to $2,990/FEU.
- Global container spot prices have fluctuated over the last two weeks, but have seen an overall increase now sitting at $1,500/FEU, a 4% increase over the last two weeks, however, a 73.7% decrease from spot rates in August 2022 according to the Freightos Baltic Index (FBX)
- Global Air Freight spot rates currently sit at $2.37, remaining steady according to the Freightos Air Freight Index (FAX)
- Europe to Northern America spot rates currently sit at $1.74(100-3000kg), says FAX, decreasing by 2.9%
- Europe to Central Asia spot rates have fallen by 6.6% currently sitting at $2.12 (100-3000kg), says FAX
- Europe to Asia, Greater China spot rates currently sit at $1.48 (100-3000kg), says FAX, a 1.3% increase
- Etihad Cargo has introduced a total of 10 new weekly freighter flights to China, offering services to Ezhou, Guangzhou and Shanghai.
- SF Airlines has also introduced a new China based route, from Shenzhen to Port Moresby, Papua New Guinea. The maiden flight took place on August 20th, after recently launching a new air cargo route from Ezhou Huahu to Abu Dhabi International.
That’s all for this week’s update…
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