Since mid-July, ocean carriers have maintained tight space on Asia-US services, and spot rates have remained higher than contract levels. We are effectively in the peak shipping season, though this year’s peak is mainly supply-driven, rather than the typical volume-driven peak. Many ocean carriers are requiring peak season surcharges on top of fixed contract rates.
A continuation of tight capacity is expected through at least September; improvements are likely after China’s October Golden Week holiday, though it ultimately depends on the carrier’s capacity strategy. New vessels will be coming online starting in Q4 and continuing through 2024, while volumes are not expected to increase significantly. Carriers’ capacity discipline will be key to balancing supply with demand.
On Europe-US services, volumes have been light and rates have continued to decline, falling below pre-pandemic spot levels. Inland equipment availability in Europe remains a challenge since volumes on the Asia-Europe trade are also down.
Persistent low water levels at the Panama Canal have resulted in extended draft restrictions and a lower daily limit on the number of vessels that can pass through the canal. Congestion is growing as vessels line up for their turn to transit. Significant delays have not been an issue up to this point, but that could change. Capacity is already being restricted by carriers in light of lower than usual peak-season demand, and many carriers are limiting the weight of cargo on Panama services to under 15 metric tons per FEU, putting more pressure on Suez services. The latest restrictions at the Panama Canal could exacerbate capacity issues, and could lead to significant delays for cargo from Asia to US east coast.
Forecasting and early booking are recommended on every trade, especially Asia-US, under the current circumstances. Despite softer peak-season volumes, we could see continued tight space and delays, particularly to US east and gulf coast destinations.
Your CVI team is here to assist you through these current market challenges. Ocean freight, air freight, domestic road/rail, and Customs Compliance – count on our dedicated professionals to care for you and your supply chain. Call us and let us show you what we can do!
VP, Pricing & Procurement
CV International, Inc.
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Rachel serves as Vice President, Pricing and Procurement for CVI. Her responsibilities include vendor selection, contract management and negotiation, transportation pricing, FMC compliance, and international agent network management.
Rachel began her career in international shipping with CMA-CGM America. She joined CVI in 2011, gaining experience in various departments with a focus on inside sales and marketing for the company. In 2014, Rachel assumed the role of Manager, Transportation, working on service procurement and development of client proposals. She has served in her current position since 2018.
A native of Norfolk, Virginia, Rachel earned her bachelor’s degree from the University of Michigan in 2005. She holds a Master of Business Administration with a concentration in Maritime and Supply Chain Management from Old Dominion University.
– Rachel Shames, VP, Pricing & Procurement, CVI
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