What is this News Alert about?
Stockwell International prides itself on offering our clients exceptional customer service and world class logistics. To continue to ensure we keep our promise we would like to offer clients a comprehensive overview of the industry as it is right now. Following a tumultuous few years, we have seen the benefit for clients to be well versed in the goings-on within the supply chain industry and how this can impact your businesses. This news alert will only be sent out once a month.
The below industry information has been collated by Stockwell International’s Pricing Manager, Mathew Grundy. With his finger on the pulse each and every day, Mathew is able to provide a comprehensive breakdown for clients.
If you require any further information please do not hesitate to contact sales@stockwellteam
Ocean Freight Summary for July 2023
Asia
The market ex Asia looks as though it will finally see some upwards movement in August after months of stable, extremely low freight rates. Since April, shipping lines have been implementing blank sailing programs, phasing in smaller vessels and cancelling services in an effort to drive freight prices up to more “sustainable” levels. While this period has been great for AU importers being able to take advantage of cheap freight rates after a difficult few years of high rates, it is important that we see a consistent market with very few blank sailings or service cancellations as we come into peak season. We have received notices from MSC and OOCL that they intend to increase rates by USD$150 / teu from August 1st. We would expect that as we come into August and then the traditional peak season in September, October and November demand for space on vessels will increase significantly and therefore freight prices will increase gradually during this period.
Europe
The market continues to slowly trend downwards for services ex Europe to Australia & New Zealand. At the beginning of 2023, ocean freight rates for 1x20ft container on the direct CMA CGM / MSC service ex Hamburg were over USD$4000 + local charges but due to prevailing market conditions rates have fallen to more sustainable levels – approx. USD$1800 for 1 x 20ft + locals charges. Trans-ship rates seemed to have plateaued in recent months so we expect rates on the direct service to do the same now that they are at a comparative level. The situation in Singapore remains stable, with no significant delays, meaning trans-shipping from Europe is currently a viable option for most importers.
North America
Freight rates remain high for services ex USA / Canada to Australia and New Zealand as congestion issues continue to cause delays and extra costs for shippers and importers. Strike action at the ports has been the main reason for congestion in recent months with main West Coast USA ports being affected in April / May with huge losses to productivity causing long vessel berthing times. Strike action has eased in the USA but we are now seeing large scale stop work actions in Canada which has had negative flow-on effects to USA ports.
Shipper’s in Canada are re-routing cargo through USA ports in an effort to avoid extra delays and congestion caused by the current strikes which is placing extra pressure on US ports which are only just recovering from months of congestion related delays. Vessel diversions plus containers on other vessels being reassigned as U.S. cargo will add volume to the US. rail system, according to Paul Brashier, vice president of drayage and intermodal at ITS Logistics. It will also add time and charges such as additional rail fees, customs fees, and port handling fees.
