Weekly Supply Chain Update: 8

Rising Ocean Rates Out of Asia Amid Strong Demand and Persistent Congestion

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Ocean rates out of Asia remained stable last week but have started climbing this week due to mid-month Peak Season Surcharge increases as demand remains strong and Red Sea-driven congestion continues in both the Western Mediterranean and the Far East. High demand and elevated spot rates have prompted some long-haul carriers to add transpacific and Asia-Europe services. Additionally, smaller regional carriers are entering transpacific trade for the first time since the pandemic. However, with capacity already stretched thin, shifting vessels to East-West lanes may lead to higher rates on regional and lower-volume lanes, similar to what occurred in 2021 and 2022. US forwarders report increased demand ahead of August tariff hikes on Chinese goods. Rising delays and prices are pressuring shippers to move seasonal goods now to avoid future issues. Concerns over a potential East Coast and Gulf port labour strike in October are also influencing decisions, with some transpacific carriers fully booked through July.

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Severe Congestion at Mundra Port Causes Significant Delays for Indian Importers and Exporters

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Indian importers and exporters face significant cargo delays at Mundra Port due to severe congestion. The Container Freight Station Association Mundra highlights increased backlogs and ineffective measures to improve the situation. A new port entry permit process for freight vehicles is causing long wait times, stranding trucks for hours. Container rail operators are also impacted, with delays in evacuating import containers despite available trains, leading to restrictions on double-stack loading by Indian Railways. Mundra Port, managed by Adani Ports, saw a 15% increase in TEUs in 2023-24, prompting plans for further capacity expansion to handle the growing volumes.

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MSC Launches Britannia Service, Enhancing Connections from China and Vietnam to Liverpool

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MSC has announced the launch of its new Britannia service, enhancing port connections from China and Vietnam to Liverpool in the United Kingdom. This new route provides direct access from Vung Tau to Liverpool, as well as connections to MSC hubs in Rotterdam, Antwerp, and Hamburg, and destinations in Scandinavia and the Baltic region. "This expansion will boost our coverage from China and Vietnam to the UK and the Northwest Continent," stated the Swiss/Italian ocean carrier. The inaugural voyage, MSC DENISSE X, will depart on 1 July.

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CMA CGM Announces Updated Peak Season Surcharges for Asia and Middle East Routes

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CMA CGM Group has announced an updated Peak Season Surcharge (PSS) effective from 20 June 2024, until further notice. This surcharge applies to shipments from all Asian ports to the Middle East Gulf, Red Sea, and Indian Subcontinent. The PSS rates are set at US$1,000 per 20' container (Dry & Reefer of all types) and US$2,000 per 40' container (Dry & Reefer of all types). Additionally, CMA CGM has introduced another Peak Season Surcharge (PSS02), effective from 15 July 2024 (gate-in date) until further notice. This surcharge applies to shipments from the Indian Subcontinent, Middle East Gulf, Red Sea, and Egypt to the US East Coast and US Gulf. The universal charge for all cargo types is US$1,000 per container.

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Bulk Carrier Tutor Sinks in Red Sea After Houthi Missile Strike

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A bulk carrier, Tutor, has sunk in the Red Sea a week after being hit by a Houthi missile. The UK Maritime Trade Operations (UKMTO) confirmed on 18 June that the 2022-built Kamsarmax vessel, owned by Evalend Shipping, sank after being struck 66 nautical miles southwest of Al Hudaydah, Yemen, on 12 June. The crew was evacuated, but the second engineer, a Filipino, was killed and trapped in the engine room. This is the second vessel to sink from a Houthi assault, following the Rubymar in February.

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DP World Opens UK's Largest Warehouse in Coventry as Part of $63.5 Million Investment

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DP World has opened the largest-ever warehouse in the UK, a 55,550 m² facility in Coventry, part of a US$63.5 million investment. Completed last month with developer SEGRO PLC, the warehouse features a fully Automated Case Retrieval (ACR) system and meets high sustainability standards with a BREEAM ‘Excellent’ rating. Denis Doyle, Senior Vice President of Operations, stated, “Our £50 million investment in Coventry, Bicester, and Burton upon Trent extends our reach into the UK supply chain.” He highlighted that this development, along with the upcoming £350 million fourth berth at London Gateway, strengthens DP World's position as the UK’s leading provider of end-to-end logistics.