Global goods trade struggles; boost in cargo rates
PORTS & SHIPPING

Global goods trade struggles; boost in cargo rates

Global trade activity is picking up momentum following a downturn last year, resulting in increased shipping rates and evoking memories of previous disruptions for supply chain managers. Emily Stausb?ll, Senior Shipping Analyst, Xeneta, likened the current situation to the chaos and soaring ocean freight rates experienced during the Covid-19 pandemic. She noted that some shippers are accelerating their imports to avoid potential capacity constraints and peak season demand.

Several factors are driving the month-long surge in maritime freight rates, driven by concerns rather than optimism. These include worries about port congestion in Asia, labour disputes in North America that could disrupt port and rail services, and escalating trade tensions between the US and China. Additionally, the maritime industry started the year under strain due to Red Sea attacks, forcing vessels to take longer routes. A.P. Moller-Maersk A/S estimated a 15%-20% capacity loss this quarter on routes from Asia to northern Europe.

Traditionally, importers and exporters witness a surge in shipments from July to September to replenish stocks before back-to-school, Halloween, and year-end holiday seasons. Analysts observe a similar trend unfolding currently, coinciding with limited spare container capacity. Spot rates for containers on key routes have surged significantly, reflecting the tight market conditions. Notably, container imports through the top 10 ports in the US have increased steadily for seven consecutive months.

China is identified as a source of congestion, with ships facing delays at ports due to vessel bunching and adverse weather conditions. These delays are exacerbating supply chain pressures across the Pacific. Furthermore, concerns about potential tariffs on Chinese imports are prompting companies to expedite their imports, reminiscent of the rush seen during previous tariff announcements.

In addition to trade tensions, fears of labour strikes and contract negotiations are adding to uncertainties in the shipping industry. Companies are wary of potential disruptions that could impact their operations, particularly as the expiry date for a labour contract covering US East and Gulf coast dockworkers approaches. Overall, the current surge in shipping rates underscores the complexities and challenges facing global supply chains in a rapidly changing geopolitical landscape. (ET Infra)

Global trade activity is picking up momentum following a downturn last year, resulting in increased shipping rates and evoking memories of previous disruptions for supply chain managers. Emily Stausb?ll, Senior Shipping Analyst, Xeneta, likened the current situation to the chaos and soaring ocean freight rates experienced during the Covid-19 pandemic. She noted that some shippers are accelerating their imports to avoid potential capacity constraints and peak season demand. Several factors are driving the month-long surge in maritime freight rates, driven by concerns rather than optimism. These include worries about port congestion in Asia, labour disputes in North America that could disrupt port and rail services, and escalating trade tensions between the US and China. Additionally, the maritime industry started the year under strain due to Red Sea attacks, forcing vessels to take longer routes. A.P. Moller-Maersk A/S estimated a 15%-20% capacity loss this quarter on routes from Asia to northern Europe. Traditionally, importers and exporters witness a surge in shipments from July to September to replenish stocks before back-to-school, Halloween, and year-end holiday seasons. Analysts observe a similar trend unfolding currently, coinciding with limited spare container capacity. Spot rates for containers on key routes have surged significantly, reflecting the tight market conditions. Notably, container imports through the top 10 ports in the US have increased steadily for seven consecutive months. China is identified as a source of congestion, with ships facing delays at ports due to vessel bunching and adverse weather conditions. These delays are exacerbating supply chain pressures across the Pacific. Furthermore, concerns about potential tariffs on Chinese imports are prompting companies to expedite their imports, reminiscent of the rush seen during previous tariff announcements. In addition to trade tensions, fears of labour strikes and contract negotiations are adding to uncertainties in the shipping industry. Companies are wary of potential disruptions that could impact their operations, particularly as the expiry date for a labour contract covering US East and Gulf coast dockworkers approaches. Overall, the current surge in shipping rates underscores the complexities and challenges facing global supply chains in a rapidly changing geopolitical landscape. (ET Infra)

Next Story
Infrastructure Urban

Karnataka Seeks Rs.5,000 Crore World Bank Aid for Disaster Resilience

To strengthen Bengaluru's status as a global IT-BT hub while addressing its vulnerability to natural disasters, the Karnataka government has sought Rs.50 billion in financial assistance from the World Bank under a proposal called the Disaster Resilience Initiative. Of this, Rs.35 billion is earmarked for Bengaluru, with the remaining Rs.15 bilion allocated for disaster-prone cities like Belagavi and Mangaluru. According to government officials, Rs.25 billion will go to the Bruhat Bengaluru Mahanagara Palike (BBMP) for modernising the city’s stormwater drains, which have been neglected for t..

Next Story
Building Material

JSW Group and POSCO to Establish Greenfield Steel Plant in Keonjhar

Odisha Chief Minister Mohan Charan Majhi announced that JSW Group, in collaboration with South Korean steel giant POSCO, will set up a greenfield steel facility in his home district of Keonjhar. This development follows speculation regarding the location of the joint venture. During his two-day visit to Keonjhar to celebrate Diwali, Majhi disclosed that discussions about the steel plant took place during roadshows for the upcoming Make-in-Odisha conclave held in Delhi and Mumbai. He confirmed that the two companies have signed a Memorandum of Understanding (MoU) to establish the plant, which w..

Next Story
Infrastructure Energy

Coal India Eyes Dividend Return

Coal India Ltd. (CIL) is optimistic about rejoining the list of dividend-paying companies, primarily due to a notable improvement in the performance of its subsidiary, Eastern Coalfields Ltd. (ECL). ECL’s operational efficiency and financial performance have seen considerable progress, contributing positively to CIL’s overall profitability. After missing its dividend payout last year—a rarity given its history as a reliable dividend stock—CIL is working to restore shareholder confidence through enhanced production targets and cost-cutting measures. ECL's focused strategy on boosting pr..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000