Stay informed with up-to-date monthly market insights on both domestic and international logistics.
TL and LTL Monthly Market Update
The predictions from our January report on the LTL market will take longer to come to fruition. LTL carriers are budgeting for record levels of capital expenditures, particularly in their real estate. The Yellow real estate is proving to be more expensive to procure and overhaul than expected. Initial reports indicate that they plan to offset these increases in the short to medium term with continued rate increases.
At the same time, we’ve seen major closures occur, and now, with the uncertainty over Coyote, time may rewrite the story. Major LTL providers have added more lanes and dock doors, and some companies have implemented new technologies designed to leverage available capacity better. These advancements are easing the capacity crunch but at an increased cost, which will be passed to shippers.
International Market Update
Over the last few weeks, mass diversions of container ships are now rerouting around Africa’s Cape of Good Hope. Carriers sent a notice that transits through the Red Sea should stop altogether due to the heightened security risk. Safety for the crews is their number one priority. As carriers adjust their schedules to longer routes, the Chinese New Year’s decreased demand will help keep vessels moving. Below is a snapshot released by Marine Traffic at the end of January showing current container ships routing around Africa.Marine Traffic contianer ship locations
With the continued attacks in the Red Sea, rates over the last month have almost doubled. According to the Drewry, the average cost of a 40ft container rose 23%. The increases are not limited to the disrupted trade routes between China and Europe. Spot market rates from China to Los Angeles rose 38% in just one week in January.Drewry weekly World Container Index.
The Federal Maritime Commission (FMC) will hold an informal hearing on February 7, 2024. They will examine how conditions in the Red Sea and Gulf of Adens regions impact commercial shipping and global supply chains.
FMC also announced that Transpacific Eastbound Carriers have recently updated their respective tariffs to implement general rate increases (GRIs) effective February 15 and March 1. The carrier list includes CMA CGM, COSCO, Evergreen, Hapag, HMM, ONE, Yang Ming, and ZIM. The rate increase averages $1000 to $2000 per date for each carrier.
Archive of Domestic Market Reports
Archive of International Market Reports