North American Market:

The blank sailing rate increase in the 1H of July, especially on west coast. About 15% overall shipping capacities have been affected by the suspensions. The available spaces will be tight in the coming two weeks, as a result, some shipping companies shut out some containers. The freight rate increased in the beginning of July but quickly experienced a slight decline. Due to the reduced shipping capacity, a significant drop of freight rate won’t happen in the short term.

Vancouver port and Prince Rupert port have been affected by the strike in west coast ports of Canada, which started from 1^st July. It’s not clear when the strike will turn to an end.

Latin American Market:

The freight rate will maintain a gaining momentum shortly, the shortage of 20’containers has eased to some extent while the 40’containers in some shipping companies are facing tight supply. Supply and demand of reefer containers are balanced.

Overall cargo demand in Latin America remains weak, the availability of spaces in Mexico is relative tight.

Europe & Mediterranean Market:

In the short term, there is no significant improvement of European market in terms of cargo volume. Generally, shipping companies have sufficient supply of empty containers, but there are occasional shortages of 40’ containers. The SCFI (Shanghai Containerized Freight Index) has been declining recently. It is highly likely that shipping companies will balance the supply and demand by means of adjusting the shipping capacities in order to stabilize the freight rate market.

The Mediterranean market has an overall open capacity, and the shortage inventory of 20’containers by some European shipping companies has improved. In the first half of July, short-term freight rates dropped sharply and the downward trend probably will continue in the second half of the month. Shipping companies have announced that they will start independent operations on new routes from the third quarter, including routes from the Far East to southern Turkey and North Africa (Libya), as well as routes from the Far East to western Mediterranean and the Adriatic Sea.

Article source: KuehneNagel