While freight rates have risen, they remain below the peaks of mid-2024. The increase in container production and the reduction in idle vessels are expected to improve capacity and equipment availability. Shippers are advised to monitor these developments closely to optimise their logistics strategies.
Rates: Set to Drop Further in February
Spot rates from the Far East to North Europe and the Mediterranean have already dropped 22% and13%, with further declines expected. US-bound rates also fell in January, with a 14% drop to the West Coast and 7% to the East Coast. To counter the decline, ocean carriers are increasing blanked sailings, reducing available capacity. However, with geopolitical uncertainty and record new ships entering service, rates may continue to fall if there’s a large-scale return to Red Sea shipping routes.
Capacity: High Utilisation
The idle fleet of containerships has decreased to less than 1%, indicating high utilisation. Annual dry container production is projected to reach 7.3million TEU, a 6.5% year-over-year increase, suggesting a growing fleet and signalling strong market demand.
Equipment: Improved Availability
The surge in container production is expected to alleviate equipment shortages, enhancing availability for shippers.
Global port congestion continues after Lunar New Year
Global container port congestion has reached a three month high, with 3.3 million TEU—nearly 11% of the global container fleet—stuck at ports in Asia, Europe, and North America.Chinese ports, particularly in the Yangtze River and Pearl River Delta, saw heavy congestion as shippers rushed to export goods before the holiday. The southern port of Yantian, handling a significant portion of China’s US trade, has increased its daily container capacity by 15% to manage demand.The effects of Lunar New Year are still being felt.Recovery from congested ports and reduced freight capacity are causing slight delays.
Trump’s tariff standoff: trade tensions rise with China, Mexico, and Canada
President Trump has imposed a 10% tariff on all Chinese imports, prompting China to retaliate with its own tariffs on US coal, gas, and machinery. Meanwhile, proposed 25% tariffs on Canada and Mexico have been paused for 30 days, after both nations agreed to enhance border security, particularly targeting fentanyl trafficking. In response,Canada is implementing a $1.3 billion border plan, and Mexico has deployed 10,000 National Guard troops to its northern border.While Trump argues tariffs will boost US manufacturing and protect jobs, they could raise consumer prices, particularly for cars, steel, food, and energy. The EU may be next, with Trump warning tariffs on European goods could come “pretty soon.”
Fire-stricken cargo ship abandoned in the Red Sea
The ASL Bauhinia, a Hong Kong-flagged vessel, is stranded in the Gulf of Aden after a fire broke out onboard on January 27, forcing the crew to abandon ship. The fire is suspected to have been caused by dangerous goods, but its location in the Red Sea has raised concerns of a possible attack by Iran-backed Houthi militants.The Houthis had vowed to target only Israel-linked ships, but past cases suggest misidentification is possible. The crew is safe after being rescued, but the abandoned vessel poses navigational risks. Salvage efforts and a General Average declaration are expected, though questions remain about insurance coverage in the conflict zone.
Bangladesh’s supply chains are in turmoil as railway strikes and transport operator walkouts disrupt freight movement, creating new opportunities for Indian companies. Railway staff walked out, halting passenger and freight services and worsening congestion at Chittagong and Dhaka’s inland container depots (ICDs). Workers are demanding better wages and benefits after the government scrapped a 162-year-old pay structure in 2021.With political instability in Bangladesh and continued labour unrest, global buyers are shifting focus to India, where major brands report strong demand for alternative sourcing.
Air Freight Updates
UK approves Heathrow expansion and Thames Crossing to boost trade
The UK government has approved plans for a third runway at Heathrow and the Lower Thames Crossing, aiming to enhance trade capacity and ease supply chain congestion. The Heathrow expansion will increase air cargo capacity, supporting UK imports and exports, while the Thames Crossing will reduce delays at key ports like Dover and Felixstowe, improving freight movement. However, concerns remain over delays in planning and execution, with industry leaders stressing the need for faster infrastructure investment to maintain the UK’s competitiveness in global logistics.
Our Airfreight team are here to help
Our Heathrow office, backed by a team of experienced Senior Key Account Managers, is fully equipped to provide tailored support for your air freight movements. Whether you're managing urgent shipments, high-value cargo, or navigating complex customs requirements, our team is here to ensure a seamless and efficient process. We specialise in:
Route Optimisation: Identifying the most efficient and cost-effective flight paths to meet your deadlines.
Capacity Management: Leveraging strong airline partnerships to secure space, even during peak seasons.
Tailored Solutions: Designing bespoke air freight solutions for unique cargo requirements, including temperature-sensitive goods and oversized shipments.
Get in touch
No two logistics challenges are the same. We understand this and tailor our solutions to meet your specific needs. Our teams work closely with you to develop strategies that address your unique challenges effectively and efficiently. Our expertise allows us to provide tailored solutions that address the complexities of the market. As shipping companies show signs of flexibility in contract allocation coverage and equipment release, our team can navigate these changes effectively, ensuring smooth operations for our clients. Our strategic approach includes offering guidance that allows businesses to plan and adjust their logistics strategies accordingly.
For companies dealing with EU-origin goods that are shipped back to the EU, Returned Goods Relief (RGR) can help you reclaim import duties on eligible goods.
Effective 31 January 2025, the UK government will require safety and security declarations for all goods imported from the EU to Great Britain. Here’s everything you need to know about these new requirements and how to prepare for them.
