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Ocean Freight Market Outlook July 2024

by Freddy Castillo 15 Jul 2024
Ocean Freight Market Outlook July 2024

Demand Outlook 

Shippers have brought forward order volumes in light of the crisis, leading to a prolonged peak. Historically, seasonal demand peaked in August in US ports. There is increased demand for TP due to concerns over potential changes in customs regulations after the US election. Wage negotiations among port workers on the US East Coast are scheduled for September. 

Cannabis Demand Outlook

Capacity Outlook 

The ongoing conflict in the Red Sea led to a 17% capacity rise on the Asia-Europe route. However, effective capacity only grew by 2% due to the longer detour around Africa. Port congestion is at an 18-month high. Further escalation was expected following strike actions at German ports, leading to omitted port calls and further blanked sailings. Equipment issues persist, especially in Asia.

Capacity Outlook Cannabis Supply

Freight Rates 

Spot rates out of China continue to rise. SCFI recorded its 11th consecutive week of increase. Spot rates from Shanghai to California are nearly five times higher than a year ago. Weekly PSS on all Asia outbound trades was introduced. There was also a steep increase in secondary trades like intra-Asia in June.

Freigth Rates Cannabyz Supply

Regulations/News 

The Suez Canal Authority has extended discounts for containerships on specific long-distance trades to address the decline in vessel transits and revenues. The Panama Canal Authority has raised its maximum authorized draft to 13.7 meters due to an early rainy season. As a result, the canal can now accommodate thirty-two ships per day. 

OFR market demand continues to be higher than last year. Accenture Cargo predicts growth of around 5% in the first half of this year. We expect Asia's outbound lanes to continue growing above global growth.

We expect demand to be strong on Asia outbound lanes for at least the next 3 months. We are closely monitoring whether capacity is being shifted to strong outbound lanes, which may create challenges on currently balanced lanes in terms of capacity.

Spot rates ex-China on major East-West trade lanes continue to increase enormously amid strong demand, tight capacity, and port congestion. On other lanes, rates remain relatively stable. They expect this uptick to last into Q3 and then eventually level out.

Cannabis Regulation News

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