International Shipping Updates: July 2024

07/05/24

Summer is the time of year when most freight orders start to be placed to get ahead on inventory for back-to-school and holiday shopping. According to respondents of the CNBC Supply Chain Survey, based on the freight orders they are scheduled to move during peak season, U.S. companies will be importing slightly more items for the holidays this year as compared to last year.

However, shipping companies seem to be taking a cautious approach during the season.

Noah Hoffman, head of retail logistics at C.H. Robinson, highlighted shippers’ heightened sensitivity to economic and geopolitical uncertainties, such as trade policies and physical disruptions like low water levels in the Panama Canal. He noted that retailers are particularly cautious, waiting to assess economic trends before making decisions.

Port of Baltimore Reopening 

Nearly three months after the catastrophic accident that caused the collapse of the Francis Scott Key bridge, the Port of Baltimore fully reopened on Monday, June 12. The port had been closed since the cargo ship Dali crashed into the bridge early March 26.  Now that the port has fully reopened, authorities expect commercial shipping traffic will soon return to pre-accident levels.  

Ruth Moritz, Vice President and General Manager of Global Relocation at Interstate International, detailed their strategy for navigating the Baltimore port crisis. “We collaborated daily with port operators, making real-time assessments and strategically rerouting shipments to meet client deadlines,” Moritz stated. “Our partnerships with ground, rail, and alternative ports minimized service disruptions.”

Red Sea Crisis Still Plagues International Trade 

Since November, international shipping has been disrupted by Yemen’s Houthi militants’ attacks in the Red Sea. Many vessels are avoiding the Red Sea route to the Suez Canal, opting for the longer journey around Africa’s southern tip. These detours add 10 to 12 days per trip, resulting in significant cost increases and environmental impact.

“About 30 percent of trade goes through the Suez Canal,” said Patrick Ronas, President of the Association of International Shipping Lines. “Longer routes required by the current situation have increased travel distances for cargo and tankers by up to 53%, causing a rise in CO2 emissions due to the additional fuel burned.” 

The Red Sea Crisis has caused a shipping container shortage at some ports. Carriers are skipping ports, reducing time at port, and not picking up empty containers to stay on schedule, resulting in a sharp increase in ocean freight rates recently.

Labor Issues Could Impact Shipping 

A recent New York Times article outlined some of the recent labor issues that could further impact international shipping:  

“Dockworkers have threatened to strike on the East and Gulf Coasts of the United States, while longshore workers at German ports have halted shifts in pursuit of better pay. Rail workers in Canada are poised to walk off the job, imperiling cargo moving across North America and threatening backups at major ports like Vancouver, British Columbia.” 

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