North American Market:

As the traditional peak season in the third quarter approaches, there is a slight increase in market freight volume. However, with high inventory levels and slow recovery in consumer capacity, market demand is expected to be weaker than previous years’ level. By the end of June, there is still downward pressure on market freight rates, especially with the announcement of a six-year contract agreement between PMA and ILWU covering 29 ports in the US East Coast route, which is yet to be signed.

The dry season in Panama Canal leads to strict restrictions on goods shipped bound for East Coast of US. However, the effective date for the canal surcharge previously announced by some shipping companies has been postponed to July 1.

Latin American Market:

Currently, overall demand for cargo in South America remains relatively weak, but the spaces are generally tight. Some European shipping companies are facing tight supply of 20’containers, which are expected to ease by the end of June or early July. Reefer container supply is stable. The SCFI index has been rising for seven consecutive weeks. Short-term freight rates to West Coast have dropped at the end of June, while freight to East Coast have experienced a slight increase.

Europe & Mediterranean Market:

The overall cargo volume in the Europe trade market is relatively weak, with sufficient empty container supply from shipping companies. The situation of some shipping companies facing slight container shortages has improved. The SCFI index has been showing a slight continuously decline recently. As the suspensions reduced  in the European routes in June, resulted in increased overall capacity and downward pressure on short-term freight rates.

Since June, the Mediterranean trade market has started to cool down, with overall space availability open. The SCFI index has declined for three consecutive weeks, and there was a significant drop in short-term rates in late June. The market downward trend expects to continue in July. Some European shipping companies are experiencing inventory shortages of 20’ containers, which are expected to improve by the end of June.

Article source: KuehneNagel