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THE peak season for container shipping began in June this year, a month earlier than usual, driven by restocking, backlog, and the advance shipment of Chinese electric vehicles (EVs), reports London's Logistics Manager.
This shift was contributed to by the extension of US Section 301 tariffs and increased tariffs on Chinese imports, particularly solar panels and EVs, and the EU's 38.1 per cent tax on Chinese EVs starting peak season in July.
Comparing current Freight All Kinds (FAK) floating long-haul rates for Europe Westbound (EUWB) and Trans-Pacific Eastbound (TPEB) with March's lowest rates, there has been an increase of 130 per cent and 100 per cent, respectively.
Another significant rate hike, reminiscent of pandemic levels, seems imminent.
The Red Sea crisis is exacerbating global supply chain disruptions similar to those faced during the pandemic. Ships rerouting from the Suez Canal to the Cape of Good Hope are adding 14 to 20 days to transit times, shifting carrier capacity from expected oversupply to a deficit.
This has triggered a cycle of port congestion, equipment shortages, and booking delays, with the Covid crisis's exorbitant ocean freight costs potentially resurfacing soon.
Another looming threat is the interruption of the master contract renewal between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX), expiring on September 30, 2024.
The ILA halted negotiations to protest Maersk's auto gate system, which could process trucks without ILA labor at the Port of Mobile, Alabama, and other APM terminals on the East Coast.
Carriers announced the cancellation of 46 sailings from their East-West head haul trades between weeks 25 and 29, representing a seven per cent cancellation rate out of 661 sailings.
Conversely, carriers like MSC, HL, and CMA CGM are deploying new standalone loops, shuttling between Asia and Northern Europe to accommodate more premium freight bookings during peak season, injecting an additional six per cent capacity into the Asia/Europe lanes by June/July.
https://www.shippingazette.com/news?news_id=9240700000403
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