Weekly Supply Chain Update: 20

Far East - Westbound

Space is tightening up for the second half of October as the upcoming General Rate Increase (GRI) in November and October’s blank sailings drive a rush for bookings. Ten services have already blanked for November, reducing capacity by 15-18%. In response, shippers are advancing bookings to avoid higher freight costs. The Shanghai Containerized Freight Index (SCFI) reported a $90 per TEU drop for week 43, reflecting October’s rates. However, an increase is anticipated for weeks 44 and 45 if the GRI is implemented and sustained. In response to the limited capacity, carriers are set to reintroduce premium services on November 1, priced at $2,000 per container. These options will offer prioritised space, earlier ETDs, and tailored service times for those needing guaranteed capacity.

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Trans Pacific - Eastbound

Carriers have announced a General Rate Increase (GRI) for Freight All Kinds (FAK), effective November 1, amid strong demand following the Golden Week holiday. Floating rates have now stabilised, moving away from the downward trend observed in the second half of October. With demand rebounding, fixed rates and Peak Season Surcharges (PSS) remain steady heading into November.

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Surcharges

CMA CGM applies new FAK rates form Asia to North Africa & Med.

• These range from US$3,300 to West Mediterranean, US$3,400 to East Mediterranean & US$4,500 to Tunisia.

Hapag–Lloyd applies new PSS from Latin America to Europe.

• The surcharge will be US$900 per reefer from 11th November.

Maersk introduces PSS from Far East to India, Pakistan, Sri Lanka & Maldives. Also from Far East to Saudi Arabia.

• PSS for 20’ containers range from US$1,000 - US$1,500 into India, Pakistan, Sri Lanka and Maldives.
• The PSS into Saudi Arabia is US$550 / 20’.

ZIM announces PSS from Far East to Med, Black Sea and North Europe

• The surcharge will be US$1,000 from 1st November.
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West Africa cape volumes on the rise

Guinea is quickly establishing itself as a major player in capesize shipping for West Africa, driven by rising demand for bauxite exports to China. BRS data shows capesize cargoes from the region have grown 19.6% annually since 2018, with volumes expected to exceed 150 million tons this year. Alongside Guinea, nations like Mauritania, Sierra Leone, Ghana, and Gabon are expanding exports, notably iron ore from Ghana and manganese ore from Gabon. Guinea’s bauxite trade has become crucial, now representing around 13% of global capesize cargoes, up from 5% in 2020. With the upcoming opening of Guinea’s Simandou iron ore mine, the region is poised to become an even more critical supplier for China’s market in the near future.

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Porto Itapoá Sets New Container Volume Record with 1 Million TEUs in 2024

Brazil’s Porto Itapoá reached a significant milestone by handling 1 million TEUs in the first 10 months of 2024, setting a new container volume record. This achievement follows the completion of the port's Phase III expansion in the first half of the year, which enlarged the yard capacity to 455,000 m², the largest in Santa Catarina and among the biggest in Brazil. The infrastructure boost has raised Porto Itapoá's annual capacity to 1.8 million TEUs, with storage capacity increasing to 31,000 TEUs. "This expansion underscores our commitment to enhanced efficiency and greater logistical capacity, positioning Porto Itapoá as a major player in the port industry," noted CEO Ricardo Arten.

Escalating Black Sea Conflict Threatens Global Food Security and Shipping Stability

Russia's intensified attacks on Black Sea ports are endangering global food security and international shipping. UK Prime Minister Keir Starmer condemned the strikes, highlighting the impact on regions reliant on Ukrainian grain exports, like Africa and Asia. Increased attacks have raised war risk premiums and escalated safety concerns in maritime trade. Four merchant ships have been struck in recent weeks, risking further disruptions to Ukraine’s vital grain corridor, which has helped stabilise global food prices. In response, the UK pledged £2.26 billion to support Ukraine and is leading efforts with Norway to secure Black Sea routes, as the stakes rise for Ukraine's economy and global supply chains.