Freight and Logistics News and Market Update

Air

• Air cargo demand, especially on ex-APAC routes, is seeing an early peak season due to ongoing e-commerce growth and ocean freight disruptions. Shipping rates from Shanghai to North America rose over 25% compared to the same month in 2023, while rates to Europe increased by 44%. Strong e-commerce demand from the US and Europe indicates a prolonged peak season in 2024.
• American consumers have remained steadfast despite high inflation, high gas prices and high interest rates. However, consumer spending is seventy percent of the US gross domestic product and economists are worried that at some point consumers will stop spending. Businesses recognize consumer spending has become increasingly challenged and hope for a Fed rate cut of 25 to 50 basis points this year for some relief for consumers.

Ocean

• Canadian longshore foremen are gearing up for a possible strike based on the outcome of a DP World hearing. Concerns have been raised over staffing levels at Vancouver's terminal due to the installation of semi-autonomous cranes. The union will announce strike vote results after the hearing, with a potential 72-hour strike notice to follow if authorized.
• The International Longshoremen’s Association (ILA) is negotiating for a nearly 80% wage increase for workers at US East and Gulf Coast Ports. The union has stated it is prepared to strike if a new contract is not in place before their current agreement expires on September 30. Such labor action could lead to significant disruptions in supply chains both in the US and globally.

Air 

• After several carriers have exited the EU-Latin America market, LATAM Cargo is stepping in to increase its service. Starting October 1, LATAM will add two additional weekly flights, likely to Brussels, bringing the total number of cargo flights between Europe and Latin America to 12 per week.
• In the first half of 2024, cargo volumes at Mexico's airports increased by nearly 7%. This growth was partly due to the shift of cargo-only operations from Mexico City International Airport (AICM) to Felipe Ángeles International Airport (AIFA), following a presidential decree last September. As a result, cargo volume at AICM dropped by nearly 61% compared to 2023.

Ocean 

• The Panama Canal Authority plans to increase daily transits to 36 by September, thanks to improved water levels from increased rainfall in June and July. While the effects of the recent drought are subsiding, the Authority is moving forward with constructing a new reservoir to prevent similar disruptions in the future. This significant project is slated for completion by 2030.
• Nicaragua and China have launched a new direct maritime trade route to enhance the benefits of their Free Trade Agreement, which has been in effect since January 2024. The route will start with three monthly sailings and is aimed at boosting trade between the two nations, strengthening economic ties with the Latin American region.

Air

• With rising demand from the Asia-Pacific (APAC) region, airlines are seeking ways to expand cargo capacity. Although most new aircraft deliveries have gone to carriers outside the region, APAC airlines are increasing capacity through better utilization of their existing fleets. Leading this expansion are Chinese carriers and Cathay Pacific, which are responding to growing volumes from e-commerce giants like Shein and Temu, particularly to North American and European markets.
• Ongoing political protests in Bangladesh have led to significant delays and disruptions in the air cargo market. Shipments from the country have been held up, leading to backlogs at Dhaka airport and other ports. As a result, air cargo rates have surged to nearly 300% of their usual levels, with the market remaining volatile due to the unrest.

Ocean

• In response to ongoing student-led protests demanding a change in government, the Bangladeshi government has enforced a general curfew. This measure, along with an internet service interruption, has significantly disrupted shipping operations at the Port of Chittagong.

Air

• Bangladesh's apparel exporters are facing significant delays and increased costs due to severe congestion in both sea and air freight, compounded by an internet blackout and curfew. Air freight costs to Europe have tripled, now reaching $6 per kilogram. Dhaka airport is overloaded, causing export delays, and many exporters are now shipping via Indian airports to meet deadlines. This logistical crisis is straining the apparel industry and affecting timely deliveries to European markets.

Ocean

• CMA CGM has introduced an updated peak season surcharge for cargo shipped from Mediterranean ports in Spain to several Latin American destinations. Starting August 24, the surcharge for short-term contracts will be €375 (approximately US$410) per dry container. The new rates apply to routes leading to the West Coast of South America, West Coast of Central America, Mexico, East Coast of Central America and the Caribbean. However, shipments to Puerto Rico will continue to incur the previous rate of US$137 per dry unit.

Air

• Qatar Cargo is revamping its freighter network strategy to better meet market demand and enhance profitability. By focusing on high-demand routes and utilizing both freighter carriers and belly networks, the airline aims to respond more efficiently to market changes and improve overall network efficiency. 
• TAAG Angola Airlines has announced that it will double the cargo flights to Nigeria, Congo and South Africa as part of its expansion and to focus on growth within African air freight market. This includes two weekly cargo flights from Dr. Antonio Agostinho Neto International Airport (NBJ) in Luanda, Angola to Lagos (LOS) in Nigeria, Brazzaville (BZV) in the Republic of Congo and Johannesburg (JNB) in South Africa with its 737-800 Boeing Converted Freighter (BCF).
• Qatar Cargo, the cargo division of Qatar Airways, has introduced a new feature called 'My Allotments' within its Digital Lounge platform. This addition aims to enhance service by preventing overbookings, facilitating inventory tracking and optimizing allotment shipments. It also offers customers a personalized view and swift confirmation of their bookings. This feature is part of Qatar Cargo's ongoing commitment to its digital transformation and improving customer service.

Ocean

• ONE (Ocean Network Express) has announced a significant rise in profits, with a net gain of $779 million, a 72% increase, alongside a 12% increase in Q1 revenues totaling $4.21 billion. Despite challenges in the container shipping sector, the company notes a recovery trend fueled by robust consumer spending in North America and Europe. Additionally, disruptions in the Middle East and rerouting around the Cape of Good Hope have helped alleviate oversupply issues.
• India is nearing completion of a detailed project report for a new international transshipment port on Great Nicobar Island in the Bay of Bengal, projected to cost INR 41,000 crore (approximately USD 5 billion). Set to start construction soon, the port is advantageously situated along major international trade routes, near other key transshipment hubs like Singapore, Klang and Colombo. The first phase is slated to be operational by 2028 and is expected to handle up to 4 million containers annually.
• Linerlytica reports that only a small percentage of container lines—about 14%—continue to use the Suez Canal route for Asia-Europe shipments. Despite rising tensions in the Red Sea due to Houthi activities, this has had a minimal impact on the broader container market. CMA CGM, a major carrier, remains committed to the Suez Canal, operating an 11-ship service through this route.

Ground

• Asyad, an Oman-based logistics company, has expanded its operations by acquiring Dubai-based Skybridge Freight Solutions (SFS). This move is part of Asyad's strategy to penetrate key markets such as India and China. The acquisition will allow Asyad to offer integrated logistics solutions in the UAE and strengthen its international presence, catering to a variety of sectors.
• The Arab Shipbuilding and Repair Yard Company (Asry), a leading ship and rig repair yard company, has partnered with DHL International Bahrain to drive operational efficiency and improve logistics capabilities. Asry will leverage DHL’s capabilities to improve its supply chain and optimize its operations by implementing its logistics solutions in the next two years.
• DTDC Express, a leading logistics company in India, reported that its has launched drone-based delivery services in India in collaboration with Skye Air  Mobility. The first delivery was from Bilaspur to Gurgaon with a distance of 7.5 km with a delivery time of just 3-4 minutes. This launch marks DTDC's strategic move to capitalize on digital advancements in the rapidly evolving logistics sector.

• Customs and Border Protection (CBP) has finalized changes in the classification of certain products. Glass containers with lids will now be classified as duty-free under HTSUS 7010.90.50, rather than as decorative glassware subject to a 30% duty. Additionally, steel T-sections, formerly classified as elevator parts under HTSUS 8431.31.00, will be reclassified under HTSUS 7216.50.00 and subject to Section 232 tariffs on steel. These updates, effective from October 1, 2024, replace previous rulings update previous rulings and adjust product categorizations and duty implications.
• The Office of the U.S. Trade Representative has postponed the proposed increase in Section 301 tariffs on various Chinese imports, originally set for August 1, 2024. The increase, affecting products like battery parts, electric vehicles and solar cells, has been postponed to allow time for finalizing decisions after reviewing over 1,100 public comments. The new tariff rates are expected to be implemented approximately two weeks following the conclusion of this review.
• Health Canada is seeking comments from the trade on new regulations Amending the Pest Control Products Regulations (PCPR). The proposed regulations would amend the PCPR to facilitate access to confidential test data (CTD) for research and reanalysis purposes under specific conditions, without the need to submit an affidavit. The CTD would only be available for request after the final registration decision has been made, or at the proposed decision stage for post-market reviews. As per current practice, confidential business information (CBI) and private information would not be disclosed.
• Customs and Border Protection (CBP) has revealed plans to establish a new Customs Trade Partnership Against Terrorism (CTPAT) office in Laredo, Texas. Scheduled to open by early next year, this will be the first addition of a new CTPAT office in several years, aimed at boosting trade facilitation at this vital southern border port.