The global freight market in September 2024 continues to face numerous challenges, including supply chain disruptions, rising costs, and labour unrest, affecting ocean, air, and road freight.
Situation summary
In September 2024, freight markets remained constrained due to labour disputes and supply chain inefficiencies. The threat of strikes in key US ports and ongoing equipment shortages intensified pressure across all transport modes, while rate fluctuations persisted due to fluctuating demand and seasonal surges. The market faces an uncertain outlook as geopolitical tensions and economic instability continue to influence global freight operations.
OCEAN
Ocean freight has been significantly impacted by labour unrest. The Canadian rail strike, which began on 23rd August, was swiftly halted by government intervention, restoring operations for Canadian Pacific Kansas City and Canadian National. In India, a potential strike involving 20,000 port workers was narrowly avoided, easing pressure on global supply chains. However, the risk of potential strike action is Germany continues and labour negotiations in the US East and Gulf Coast ports remain unresolved, with a strike potentially starting from 1st October. This could lead to widespread disruptions, causing backlogs and forcing cargo diversion to the already congested West Coast ports.
The collaboration between MSC and the Premier Alliance, scheduled for 2025, aims to stabilise the Far East-Europe route by slot-swapping on several services. However, the broader ocean freight market remains strained, with strong demand surpassing supply growth, especially on the Asia-to-Europe and Asia-to-Americas trade lanes. Equipment shortages, port congestion, and route diversions continue to limit capacity.
Freight rates have stabilised but remain significantly above pre-pandemic levels. While Asia-Europe rates are slightly declining due to excess capacity, Transpacific and Latin American routes are experiencing consecutive rate drops. However, potential strikes at US East Coast ports may cause further disruptions and price hikes.
AIR
The airfreight market has maintained steady growth, driven by ocean freight disruptions, eCommerce, and high-tech components. As we move towards Q4 2024, capacity remains tight, especially on routes from Asia to Europe and North America. The surge in demand, combined with ongoing capacity constraints, has led to rising rates, particularly on transpacific routes.
Security concerns have also shaped recent developments in the air freight sector. The US Transportation Security Administration (TSA) and Transport Canada introduced new air cargo security protocols in September, tightening regulations for cargo entering North America from Europe and Central Asia. These changes add another layer of complexity, potentially impacting capacity and pushing rates higher.
Demand is expected to peak during the upcoming holiday season, with Asia-Pacific leading the charge. Spot rates from China to Europe and the USA have risen sharply in recent weeks. Capacity imbalances in key regions, particularly Northeast Asia and the Middle East, continue to drive market volatility. As peak season approaches, shippers should prepare for sustained upward pressure on rates, with further disruptions likely due to potential labour strikes in the US.
ROAD
The TEG Road Transport Index saw a 2.24% rise, reversing the previous year’s decline. Rising operational costs, driven by high fuel prices and labour shortages, continue to place pressure on transport providers.
Demand for road freight services has surged, with haulage prices increasing by 3.47% month-on-month and by nearly 9.5% year-on-year. This surge coincides with higher operational costs, making it difficult for businesses to keep up with rising demand.
However, challenges remain. The UK government’s delay of post-Brexit border checks for fruit and vegetable imports from the EU until July 2025 adds another layer of uncertainty to the road freight market. Further rate adjustments are expected as demand continues to grow.
Our teams in the UK, Europe and across Asia continuously scan the evolving global multimodal operating environment, to identify potential issues and adapt operations, to avoid pitfalls that may challenge our customers’ supply chains.
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