Overall
This week, the Drewry composite index experienced a 3% decrease, yet it has registered a 71% increase compared to the same period last year. The World Container Index (WCI) is now 106% higher than the average rates before the pandemic in 2019. Additionally, the average index for the year-to-date significantly exceeds the 10-year average, highlighting the lasting impact of the exceptional conditions during the 2020-2022 period.
Freight rates between various ports have shown diversity; rates from Rotterdam to New York saw a 1% decrease. Rates from Shanghai to Los Angeles fell by 3% and rates from Shanghai to New York declined by 6%. Drewry expects a minor decrease in spot freight rates in the coming week.
Ocean Freight Insights
In the Asia-Europe trade landscape, the re-routing via the Cape of Good Hope remains prevalent. Recent incidents, such as the attack on the Chinese-owned oil tanker Huang Pu over the weekend, have prompted carriers to reassess the safety of the Indian Ocean route for transportation. In response, the Ocean Alliance, comprising CMA CGM Group, COSCO Shipping, Evergreen, and OOCL, announced their Day 8 Product Update for April 2024. This update includes a comprehensive restructuring of all Asia to North Europe shipping loops via the Cape of Good Hope.
Carriers are preparing to implement General Rate Increases (GRI) of $400-600 per FEU starting in April, despite the current flat demand. This increase comes as discussions continue around the sustainability of current offerings and the finalization of long-term deals, particularly in light of potential sustained Red Sea surcharges.
It has been announced that receiving for laden exports at POL USBAL is closed until further notice. Contingency options for U.S. exporters who typically utilize USBAL have been outlined, suggesting alternative Ports of Loading (POLs) such as NYC, PHL, Norfolk, and options for transloading to a USWC port or CHI, depending on the destination and preferred routing.
BALTIMORE Update
The Francis Scott Key Bridge in Baltimore, Maryland, experienced a catastrophic collapse after being struck by the container ship DALI around 1:30 am ET on March 26. The DALI, a large vessel operated by Maersk and part of the 2M Alliance service route between Asia and the US East Coast, reportedly lost power and collided with a bridge pillar, leading to the bridge’s immediate collapse. This incident has been declared a mass casualty event, affecting many and causing significant concern among local authorities and the community.
Following the collapse, over 40 ships within the Port of Baltimore were stranded, unable to leave due to the blockage. This has led to various logistical challenges, including potential delays in cargo discharge and the need for strategic decisions regarding the redirection of cargo to other East Coast ports. Container ships with Baltimore on their rotation, numbering 107, are likely to be redirected to ports such as Norfolk or New York/New Jersey. The disruption necessitates adjustments in vessel scheduling and cargo positioning, with importers possibly having to consider alternative logistics solutions like long-distance drayage or transloading to reach final destinations.
The impact of the bridge collapse extends beyond immediate logistical disruptions, posing questions about the ability of regional truck and rail systems to handle a potential surge in cargo volume if the Port of Baltimore’s operations remain compromised. Although the Port of Baltimore is smaller in terms of containerized freight volume compared to nearby ports, it is a vital component of the regional logistics network. The timeline for clearing the waterway and resuming normal port operations is uncertain, and this will largely dictate the scale of downstream effects on the East Coast’s transportation and logistics infrastructure.
We are continuing to monitor all lanes, ports, and services to provide you with the best possible service at the best possible price.
M.E. Dey and Co. monitors the market daily to find competitive rates that pair well with exceptional transportation services. We provide fixed-rate contracts in addition to standard market rates. Contact us to talk with a representative or request a quote to get started.