Weekly Supply Chain Update: 10

Chinese Ports See 8.8% Increase in TEU Throughput from January to May 2024

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From January to May 2024, Chinese ports handled 132.8 million TEUs, an 8.8% year-on-year increase. Shanghai Port saw an 8.6% rise to 20.9 million TEUs, and Ningbo Zhoushan Port grew by 6.5% to 15.8 million TEUs. Beibu Gulf experienced the highest increase at 19.1%, followed by Shenzhen at 15.8%. Shanghai and Ningbo & Zhoushan showed steady growth at 6.6% and 9.3%, respectively. However, Qingdao and Xiamen saw declines in May, with throughput dropping by 7.3% and 5.3% year-on-year. Despite these challenges, most ports demonstrated overall growth during this period.

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Far East-Westbound: Ongoing Equipment Shortages and Port Congestion Lead to Expected Blank Sailings in July and August

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Equipment shortages and port congestion in Asia are improving but still insufficient to meet current demand, leading to expected blank sailings in July and August. Although demand remains strong, it has slightly decreased compared to previous weeks. Floating rates have increased by $1,500-2,000 per 40-foot container for the first half of July. Customers are expected to expedite cargo to avoid further delays. Premium options are available to prioritise equipment and secure earlier departures, reducing the risk of rolling or equipment shortages.

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Transpacific Volumes Strong Despite Blank Sailings and Port Congestion

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Volumes on Transpacific routes remain strong, surpassing last year's numbers. However, structurally blank sailings have occurred due to Cape of Good Hope routings and port congestion in Asia and North America. Shipping lines are offering more premium services with expedited options and equipment guarantees, while extra loader (XL) space is helping reduce backlogs in Asia, particularly to the Pacific Southwest (PSW). The East Coast (EC) remains heavily overbooked. Floating rates: The General Rate Increase (GRI) for July was successfully implemented across all Transpacific Eastbound gateways, with rates adjusted more significantly to the EC to manage high booking volumes. Fixed rates: Carriers have announced a new Peak Season Surcharge (PSS) for July 1, following two successful previous increases.

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Hapag-Lloyd Announces Rate Increases for South America and Indian Subcontinent Routes

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Hapag-Lloyd announced a General Rate Increase (GRI) of US$500 per container for all dry and reefer cargo from the South America East Coast to North America, Mexico, Central America, and the Caribbean, effective 1 August 2024 until further notice. Additionally, Hapag-Lloyd will implement new ocean tariff rates for shipments from the Indian Subcontinent and Arabian Gulf to South Europe and North Africa. This increase will apply to sailings starting on or after 15 July 2024 and remain in effect until 31 July 2024.

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Global Capesize Fleet Surpasses 2,000 Vessels, Doubling in Size Over 14 Years

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For the first time, the global capesize fleet has exceeded 2,000 vessels, doubling in size over the past 14 years. As of this month, there are 2,002 capesize ships with a combined 397 million dwt, including VLOCs, newcastlemaxes, standard capes, and mini-capes, ranging from 130,000 to 400,000 dwt. The fleet consists of 265 VLOCs, 496 newcastlemaxes, 1,098 standard capes, and 143 mini-capes. The average age of the capesize fleet is now 11 years, up from a low of 7.1 years in mid-2013, but not yet reaching the high of 11.9 years in late 2008. Since 2014, newcastlemax designs have dominated the newbuilding market, with 420 contracts compared to 290 for standard capes. Consequently, the newcastlemax fleet has more than doubled, while the standard cape fleet has remained relatively unchanged.