In an ever-changing global environment, ThemaTrans wishes to update you on the latest trends that may impact your air and sea freight for the end of 2024, as well as provide forecasts for the beginning of 2025.
Our aim is to offer a clear and concise analysis to help you anticipate and efficiently manage these challenges.
Air Freight: Capacity and Rates Under Pressure
The air freight sector experienced remarkable growth in August 2024, with demand increasing by 11% compared to the previous year. This growth is primarily driven by:
- E-commerce expansion : Chinese exports to Europe surged by 38%, reflecting strong consumer demand for online shopping in Europe.
- Iconic product launches, such as the new iPhone, will take up significant capacity on air freight routes at the end of this year.
- Supply chain disruptions : Shippers are seeking quicker alternatives to counteract maritime delays, leading to increased use of air freight.
- Geopolitical events impacting logistics :
- In India, tensions in Bangladesh have caused a shift in freight to northern India, heavily congesting airports in the region.
- The ongoing war in Ukraine continues to prevent aircraft from flying over the conflict zone, affecting flight schedules to and from Asia, which are delayed due to rerouting.
Impact on Your Shipments
The fourth quarter is traditionally the busiest period. With the continued rise of e-commerce and preparations for the holiday season, increased demand is expected. Europe–North America and Europe–Asia routes show significant price increases, though some return routes have seen slight rate declines.
Flight availability may be limited, resulting in longer lead times and potentially higher costs.
Below are some key dates to keep in mind for the coming months :
- Golden Week : Tuesday, October 1, 2024, to Monday, October 7, 2024
- Black Friday : Friday, November 29, 2024
- Noël : Tuesday, December 24, and Wednesday, December 25, 2024
- Chinese New Year (CNY) : Wednesday, January 29, 2025 (holidays in China from 28/01/2025 to 03/02/2025)
Recommendations
Proactive planning will be our ally at the end of this year! For your air freight, we recommend :
- Plan ahead : Book your shipments as early as possible to secure capacity.
- Be flexible : Be prepared to use alternative airports or express services if necessary.
- Monitor rates : Take advantage of temporary rate fluctuations to optimize costs.
Maritime Transport: Turbulence and Adjustments
In 2024, the maritime market faced a mismatch between supply and demand. After experiencing high rates through the summer months, prices have been steadily decreasing since August. However, volatility is expected due to the following factors:
- Red Sea conflict : The crisis in the Red Sea continues to disrupt global shipping routes, forcing vessels to bypass the Cape of Good Hope, increasing transit times and reducing overall capacity.
- Port strike threats in the U.S. : Tensions between port unions, particularly the International Longshoremen’s Association (ILA), and employers could lead to strikes on the East and Gulf coasts. These disruptions may cause delays, logistical challenges, and increased freight costs.
- Exceptional demand : Trans-Pacific and Asia-Europe routes continue to exceed demand forecasts, fuelled by the e-commerce boom and restocking needs.
- Freight rate fluctuations : Due to uncertainty surrounding union negotiations and heightened seasonal demand, freight rates may rise significantly. Shippers could face unexpected cost increases.
- Reduced capacity and port congestion : Potential disruptions could exacerbate congestion in European and Asian ports, impacting transit times and container availability.
Regional Focus: Route Forecasts
- Europe-North America routes : Importers on the U.S. East Coast may face cargo delays if port strikes materialize. Transatlantic freight rates continue to decline, though the situation remains volatile.
- Middle Eastern routes : Congestion persists in key Middle Eastern ports, particularly Jebel Ali in the UAE and Dammam in Saudi Arabia. This congestion is often due to high cargo volumes and operational inefficiencies, occasionally driving up rates due to high demand for limited capacity. However, port efficiency initiatives could lead to slight rate decreases in the medium term.
- Asian routes : Southeast and Northeast Asia routes to North America and Europe continue to see strong demand. Vessel load rates remain high, sometimes reaching up to 86-87%. Given this demand and the peak season associated with the year-end holidays, freight rates tend to rise. The outlook for Q4 indicates sustained demand, with a potential increase in rates.
- South America/Mexico routes : Overcapacity on some routes has driven down freight rates in the region. However, port congestion, particularly in major Brazilian and Mexican ports, is beginning to reverse this trend. Due to congestion and delays, an increase in rates is expected. Carriers are adjusting capacity to better match demand, which may also influence pricing.
Impact on Your Shipments
Proactive planning is essential this year-end ! We recommend:
- Plan ahead : Anticipate your transportation needs and book shipments early to secure space and current rates.
- Diversify your routes : Consider using alternative ports or different transport modes (such as rail freight or multimodal SEA+AIR) to mitigate disruption risks.
- Monitor the market actively : Stay informed about union negotiations, port conditions, and rates to adjust your strategies in real-time.
- Work closely with your partners : Maintain regular communication with your suppliers, carriers, and logistics partners to proactively manage challenges and find tailored solutions.
Please do not hesitate to contact your ThemaTrans advisor for personalized assistance.
