Dare to Improve Sea Freight - Week 43, 2024

Welcome to this week’s edition of Dare to Improve Sea Freight. I aim to keep you informed with updates, insights, and ideas for the logistics and shipping industries.

Table of Contents

1. Container Prices
2. Market Update
3. Economic Indicators
4. Start a Conversation on Growth
5. Meet in Person

Container Prices

Global Indices

In week 43 of 2024, container prices varied across different indices. The FBX - Freightos Baltic Global Container Index dropped by 5.9%, landing at 3,413 USD/40ft from last week’s 3,628 USD/40ft. The WCI - World Container Index also decreased, reaching 3,095 USD/40ft, down 3.8% from 3,216 USD/40ft. In contrast, the SCFI - Shanghai Containerized Freight Index rose 6.0% to 2,185 USD/20ft, up from 2,062 USD/20ft. * The unit of measure is USD/40ft, except for the SCFI index, which uses USD/20ft (USD/40ft for the US East and West coasts).

Far East to US West Coast

On Far East to US West Coast routes, the FBX01 - Freightos Baltic Index decreased by 5.6% to 5,256 USD/40ft from 5,565 USD/40ft, while the XSICFEUW index recorded a 3.3% decline, also at 5,256 USD/40ft, down from 5,433 USD/40ft.

Far East to North Europe

For routes from the Far East to Northern Europe, the FBX11 Freightos Baltic Index dropped 2.8% to 3,523 USD/40ft from last week’s 3,625 USD/40ft, and the XSICFENE index similarly fell by 2.6% to 3,253 USD/40ft from 3,339 USD/40ft.

Market Update

Ocean Freight Rates

Following Golden Week, there is a notable increase in demand, prompting carriers to announce a general rate increase (GRI) for Freight All Kinds (FAK) effective November 1. This increase is expected to stabilise floating rates, which had previously stopped declining in the latter half of October. Despite easing volumes, transpacific spot prices remain significantly higher than earlier in the year, with rates to the West Coast 35% lower than their July peak but still above historical lows. Similarly, Asia-Europe rates have eased but remain elevated compared to a year ago, with carriers hopeful for a rebound as they implement GRIs to push rates higher.

Demand, Volumes, Vessel Capacity, and Equipment Availability

Demand surged post-Golden Week, leading to expedited bookings to avoid higher costs due to the upcoming GRI and capacity cuts from blank sailings. Capacity has been reduced by 15–18% due to these blank sailings. Despite a pull forward of peak season demand, which has led to easing volumes, transpacific rates remain high. Asia-Europe lanes are experiencing increased blank sailings as carriers manage lower demand. Equipment shortages are anticipated at Asian origins due to earlier disruptions, although volumes are past their peak for the year.

Schedule Reliability, Delays, Port Congestions, and Disruptions

Minimal congestion persists at US East Coast and Gulf ports following a strike, with operations largely recovered. European ports like Hamburg and Felixstowe continue to face congestion, and vessel bunching is noted in Shanghai, though conditions have improved at Qingdao and Ningbo. The anticipation of pre-Lunar New Year demand could exacerbate these issues. Carriers are reintroducing premium services to ensure guaranteed space amidst these disruptions. The impact of e-commerce has led to advanced planning by shippers, potentially alleviating some of the expected Q4 congestion and rate spikes.

Schedule Reliability, Delays, Port Congestions, and Disruptions

Mediterranean, as the window for peak season shipments closes due to longer transit times around the Cape of Good Hope and the upcoming Golden Week slowdown. Concerns over a potential East Coast port worker strike continue to drive strong demand on the transpacific route on the U.S. West Coast. This has led some carriers to increase capacity, with extra sailings planned in the coming months. However, capacity challenges continue due to adverse weather and blank sailings. Although equipment shortages are easing in some regions, East Asia and India loading ports still report shortages for certain container types, and weight restrictions remain unresolved for specific containers.

Economic Indicators

Crude Oil: Brent

Brent Oil Futures held steady with a slight increase of 0.1% at 74.6 USD, matching the previous week's value of 74.6 USD. Compared to last month’s value of 74.4 USD, there was a minimal monthly rise of 0.3%. Recent weeks have shown volatility, with notable weekly shifts like a 9.6% increase to 77.6 USD in week 40, then a decrease to 74.6 USD by week 42.

Manufacturing PMI

On October 24, preliminary Manufacturing PMI data showed a slight rise in confidence for October, with the Eurozone’s PMI reaching 45.9 index points, a 2.0% increase from the previous 45.0, exceeding the forecast of 45.1.

The preliminary US Manufacturing PMI by S&P Global also saw a modest gain to 47.8 index points, a rise from last month’s 47.3, just above the forecasted 47.5.

GDP

For GDP data, China’s Q3 GDP growth came in at 0.9% QoQ, just below the forecast of 1.0% but higher than the previous quarter’s 0.7%.

South Korea's preliminary Q3 GDP marked a slight improvement at 0.1% QoQ, surpassing the previous -0.2% yet below the 0.5% forecast.

Interest Rates

On October 21, China’s Loan Prime Rate (CLPR) was set at 3.10%, a reduction from the previous 3.35%.

Consumer Confidence

Eurozone’s preliminary Consumer Confidence Index (CCI) for October, released on October 23, registered at -12.5 points, an increase from last month’s -12.9 but slightly below the forecast of -12.0.

Start a Conversation on Growth

Unlock efficiency and excellence in your logistics operations by leveraging my 16 years of expertise in supply chain optimisation. Connect with me directly:

• Email: [email protected]
• Phone / WhatsApp: +65 87832090
• LinkedIn: ?https://www.dhirubhai.net/in/carlo-damico/

Let's design a strategy that drives your business forward.

Meet in Person

Join me at my upcoming Shipping Committee event in Singapore on

November 7th:

References

• Shanghai Shipping Exchange | https://en.sse.net.cn/
• Drewry Shipping Consultants Ltd | https://www.drewry.co.uk/?
• Freightos | https://terminal.freightos.com/
• The Baltic Exchange | https://www.balticexchange.com/
• Xeneta | https://xsi.xeneta.com/
• Compass Financial Technologies | https://www.compassft.com/indices/
• Flexport | https://www.flexport.com/
• National Bureau of Statistics of China | https://www.stats.gov.cn/english/
• Caixin Global https://www.caixinglobal.com/
• Ministry of Statistics and Programme Implementation | https://www.mospi.gov.in/
• Cabinet Office, Government of Japan | https://www.esri.cao.go.jp/en/sna/menu.html
• Australian Bureau of Statistics | https://www.abs.gov.au/
• Statistics Korea: Statistics Research Institute | https://kostat.go.kr/anse/
• Bureau of Economic Analysis | https://www.bea.gov/
• Bureau of Labor Statistics | https://www.bls.gov/
• The Conference Board | https://www.conference-board.org/
• S&P Global | https://www.spglobal.com/en
• Institute for Supply Management | https://www.ismworld.org/
• European Commission | https://commission.europa.eu/
• Eurostat | https://ec.europa.eu/eurostat

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