Global Freight Market Update: Navigating Challenges and Opportunities in June 2024

Introduction

As we enter June 2024, the global freight market continues to evolve, presenting both challenges and opportunities for businesses involved in international trade. At FreightAmigo, we're committed to keeping our clients informed about the latest developments in the logistics industry. In this comprehensive update, we'll explore key trends affecting various segments of the freight market, including potential labor disruptions in Canada, ocean freight dynamics, and air cargo developments.

Here are some critical data points to consider:

• Transpacific Eastbound Ocean freight volumes are expected to be 10% higher year-over-year in June.
• Global air cargo rates have increased by 4% compared to 2023 levels.
• Air cargo tonnages are up 9% year-over-year, primarily driven by Asia Pacific (+16%) and Middle East & South Asia (+14%).
• The Ocean Timeliness Indicator for China to the U.S. East Coast has increased to 56 days.

Potential Labor Disruptions in Canada

Two significant labor negotiations in Canada could impact cross-border trade and rail transportation:

Border-Agent Union Negotiations

The Canada Border Services Agency (CBSA) will be in a legal strike position as of June 6. While most members are considered essential and cannot legally perform "work to rule" actions, even minor delays could have significant cumulative effects. Importers should prepare for potential delays in their shipments if a strike occurs.

Canadian Rail Negotiations

The Canada Industrial Relations Board (CIRB) has directed the Teamsters National Rail Conference (TCRC), Canadian National (CN), and Canadian Pacific Kansas City (CPKC) to provide final replies by June 14. This could lead to a CIRB decision and potentially a strike by the end of the month. The TCRC union has vowed to strike at the earliest opportunity after the CIRB ruling, and no negotiations have taken place in the meantime.

At FreightAmigo, we understand the importance of staying ahead of potential disruptions. Our Digital Logistics Platform provides real-time updates and alternative routing options to help our clients navigate these challenges effectively.

Ocean Freight Market Dynamics

Transpacific Eastbound (TPEB)

The early peak conditions for TPEB ocean freight that began in May are continuing through the first part of June. Key points to note include:

• Volumes are expected to be 10% higher year-over-year.
• General rate increases implemented in May have held, with further increases expected in June.
• Vessels leaving Asia are expected to be full through June, particularly from Vietnam and South/East China to the Pacific Southwest.
• Carriers implemented a Peak Season Surcharge (PSS) on June 1, with potential increases on June 15.

Far East Westbound (FEWB)

The FEWB market continues to tighten, with space constraints expected to last until at least the end of June. Several factors are contributing to this situation:

• Port congestion in Asia due to high yard utilization, unexpected bad weather, and vessel bunching.
• Equipment shortages and delays caused by vessels rerouting via the Cape of Good Hope.
• Strong demand driven by consumer needs and companies building stock due to longer lead times.
• Significant rate increases, with some carriers raising Peak Season Surcharges to $1000-1500 per TEU.

Our Digital Logistics Solution at FreightAmigo can help you navigate these challenges by providing access to real-time rate comparisons and booking options across multiple carriers and routes.

U.S. Exports

Container availability for inland U.S. exporters has become increasingly challenging due to global shipping disruptions. To ensure a smooth loading experience, we recommend booking 3-4 weeks in advance for coastal port loadings and 4+ weeks for inland rail point loadings.

Air Cargo Market Update

The global air cargo market is showing signs of recovery and growth:

• Global air cargo rates have increased by 4% compared to 2023 levels, largely due to strong demand from Asia Pacific.
• Rates remain 41% above May 2019 levels, indicating a significant shift in the market since the pandemic.
• Global tonnages are up 9% year-over-year, with Asia Pacific and Middle East & South Asia leading the growth.
• Capacity remains stable globally but has grown 7% compared to the same period last year.

Notable regional highlights include:

• Significant year-over-year tonnage growth (+26%) from Dubai to Europe, driven by sea-air cargo demand.
• Continued double-digit year-over-year growth in Asia Pacific (+16%) and Middle East & South Asia (+14%).
• A recovery in tonnages following China's Labor Day and Golden Week holidays.

At FreightAmigo, our Digital Platform allows you to compare door-to-door freight quotes for international courier and airfreight solutions, helping you find the most cost-effective and efficient options for your air cargo needs.

Ocean Timeliness Indicator

Flexport's Ocean Timeliness Indicator (OTI) shows increasing transit times across all major trade lanes for the third consecutive week:

• China to U.S. East Coast: 56 days
• China to Northern Europe: 65 days (due to routing around the Cape of Good Hope)
• China to U.S. West Coast: 38 days

These extended transit times underscore the importance of proactive planning and real-time tracking capabilities. FreightAmigo's Digital Logistics Platform offers 24/7 shipment status tracking, connecting with more than 1000 reputable airlines and shipping lines to ensure you always know where your cargo is and when it will arrive.

Conclusion

As the global freight market continues to face challenges and opportunities, staying informed and adaptable is crucial for businesses involved in international trade. At FreightAmigo, we're committed to providing you with the tools and insights you need to navigate these complex market conditions effectively.

Our Digital Logistics Platform offers a comprehensive suite of services, including rate comparison, online booking, real-time tracking, customs clearance, cargo insurance, and trade finance solutions. By leveraging our advanced technology and industry expertise, you can streamline your logistics operations and make informed decisions that drive your business forward.

Stay ahead of the curve in this dynamic freight market. Contact FreightAmigo today to learn how our Digital Logistics Solution can help you optimize your supply chain and overcome the challenges highlighted in this market update.