Navigating Global Freight Challenges: June 2024 Market Update

Introduction

As we enter June 2024, the global freight market continues to face a complex array of challenges and opportunities. From ongoing labor negotiations in Canada to surging ocean freight rates and shifting air cargo dynamics, logistics professionals must stay vigilant to navigate these turbulent waters. In this comprehensive update, we'll explore the key trends shaping the freight industry and discuss how digital logistics solutions can help businesses adapt to these rapidly changing conditions.

Here are some of the crucial data points and trends we're observing:

• Transpacific Eastbound Ocean freight volumes are expected to be 10% higher year-over-year
• Global air cargo rates have increased by 4% compared to 2023 levels
• Ocean Timeliness Indicators are showing increased transit times across major trade lanes
• Potential labor disruptions in Canada could impact cross-border trade

Canadian Labor Negotiations: Potential Impacts on Cross-Border Trade

Two significant labor negotiations in Canada are drawing attention due to their potential impact on cross-border trade and logistics operations:

Border-Agent Union Negotiations

The Canada Border Services Agency (CBSA) will be in a legal strike position as of June 6. While the majority of CBSA members are considered essential workers and cannot legally engage in work-to-rule actions or intentional slowdowns, even minor delays at border crossings could have significant cumulative effects on trade flows. Importers should be prepared for potential delays in their shipments if a strike is called.

Canadian Rail Negotiations

The Canada Industrial Relations Board (CIRB) has set a deadline of June 14 for final replies from the Teamsters National Rail Conference (TCRC), Canadian National (CN), and Canadian Pacific Kansas City (CPKC). This timeline suggests that a CIRB decision—and possibly a strike—could occur by the end of the month. The TCRC union has expressed its intention to strike at the earliest opportunity following the CIRB ruling, and there have been no negotiations in the interim.

These potential labor disruptions underscore the importance of having flexible logistics strategies and digital tools that can help businesses quickly adapt to changing circumstances. FreightAmigo's Digital Logistics Platform offers real-time tracking and alternative routing options, enabling companies to navigate potential delays and disruptions more effectively.

Ocean Freight Market Update

Transpacific Eastbound (TPEB) Trade Lane

The Transpacific Eastbound trade lane is experiencing early peak conditions, with volumes expected to be 10% higher than the previous year. Key developments include:

• General rate increases implemented in May have held firm
• Further rate hikes are anticipated for all TPEB gateways in June
• Vessels leaving Asia are expected to be full through June, with Pacific Southwest routes particularly congested
• Peak Season Surcharges (PSS) were implemented on June 1, with potential increases on June 15

Far East Westbound (FEWB) Trade Lane

The FEWB market is facing significant challenges, including:

• Tightening space constraints expected to last until at least the end of June
• Severe port congestion in Asia due to high yard utilization and weather-related delays
• Continued disruptions from vessels rerouting via the Cape of Good Hope
• Strong demand driving rate increases of $1,000 - $2,000 per 40-foot container
• Carriers implementing Peak Season Surcharges of $1,000-$1,500 per TEU

To mitigate these challenges, shippers are advised to book early, place bookings in smaller lots, and pick up empty containers as soon as possible. For time-sensitive cargo, premium shipping options may be necessary to ensure timely delivery.

U.S. Exports: Container Availability Challenges

U.S. exporters, particularly those loading at inland rail points, are facing significant challenges in container availability. This situation is a result of global shipping disruptions and their impact on container flow. To ensure smooth loading experiences, it's recommended that exporters book 3-4 weeks in advance for coastal port loadings and 4+ weeks in advance for inland rail point loadings.

FreightAmigo's Digital Logistics Solution can help exporters navigate these challenges by providing real-time visibility into container availability and offering advanced booking capabilities to secure equipment when needed.

Air Freight Market Update

The global air freight market is showing signs of recovery and growth, with several notable trends:

• Global air cargo rates have surpassed 2023 levels, increasing by 4% on average
• Rates remain significantly higher than pre-pandemic levels, sitting 41% above May 2019 figures
• Global tonnages are up 9% year-over-year, driven primarily by strong growth in Asia Pacific (+16%) and Middle East & South Asia (+14%)
• Capacity has grown 7% compared to the same period last year, although Central & South America saw a substantial decrease (-17%) due to reduced flower shipments after Mother's Day

Regional highlights include significant year-over-year tonnage growth (+26%) on the Dubai to Europe route, driven by sea-air cargo demand. Both Asia Pacific and Middle East & South Asia continue to show double-digit year-over-year growth.

FreightAmigo's Digital Platform offers comprehensive air freight solutions, allowing businesses to compare rates, book shipments, and track cargo across multiple carriers, ensuring optimal routing and cost-effectiveness in this dynamic market.

Ocean Timeliness Indicator: Increasing Transit Times

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 OTI increased to 56 days
• China to Northern Europe OTI rose to 65 days, primarily due to routing around the Cape of Good Hope
• China to U.S. West Coast OTI increased to 38 days

These extended transit times highlight the ongoing challenges in global shipping and the need for businesses to plan their supply chains with greater lead times and flexibility. FreightAmigo's Digital Logistics Platform provides real-time visibility into shipment status and transit times, enabling businesses to make informed decisions and adjust their strategies accordingly.

Conclusion: Navigating Complexities with Digital Solutions

As the global freight market continues to evolve, businesses must remain agile and informed to navigate the complexities of international logistics. From potential labor disruptions in Canada to surging ocean freight rates and shifting air cargo dynamics, the challenges are diverse and interconnected.

In this environment, digital logistics solutions like FreightAmigo's comprehensive platform become invaluable tools for businesses of all sizes. By leveraging artificial intelligence, big data, and advanced technologies, FreightAmigo empowers organizations to:

• Compare and book door-to-door freight quotes across multiple modes of transport
• Track shipment status in real-time, connecting with over 1000 airlines and shipping lines
• Streamline customs clearance, cargo insurance, and trade finance processes
• Automate shipment documentation for increased efficiency
• Access 24/7 expert support for logistics challenges

As we navigate the complexities of the global freight market in June 2024 and beyond, embracing digital logistics solutions will be crucial for businesses looking to maintain resilient and efficient supply chains. By staying informed about market trends and leveraging the power of Digital Logistics Platforms, companies can turn challenges into opportunities and thrive in an ever-changing logistics landscape.