Posted on May 27, 2024
Global shipping news

Weekly Shipping & Logistics News Wrap, Week 22 

Top Highlights

  • Spot rates continue to rise 
  • Increase in transit times on Asia-Med route 
  • Port congestion takes toll on sea-air services 
  • DHL launches virtual cargo airline 
  • AI in logistics faces challenges 

Spot Freight Rates Skyrocket, Shippers Furious Over Ignored Contracts 

North European shippers and freight forwarders are expressing frustration as spot freight rates skyrocket. Drewry’s WCI Shanghai-Rotterdam leg climbed 20% week-on-week, reaching $4,999 per 40ft, with real terms rates hitting $6,000-$7,500. Tight vessel supply and high demand are exacerbating container shortages at key export hubs in Asia. Carriers’ preference for higher-paying spot cargo over contracted volumes is infuriating customers, forcing some to suspend shipments once current bookings are completed. The ongoing turmoil has led to renewed calls for regulatory intervention to stabilise rates. 

Transit Times Surge 39% on Asia-Mediterranean Routes Amid Red Sea Crisis 

The Red Sea crisis has significantly increased transit times, with shipping lines rerouting around the Cape of Good Hope. According to Sea-Intelligence, the average minimum transit time from Asia to the Mediterranean has risen by 39% since January 2024. The Asia-North Europe routes experienced a 15% increase. This extension in sailing distances is impacting the competitiveness and efficiency of these routes. As the crisis persists, logistics companies are seeking alternative solutions to mitigate delays. 

Port Congestion Makes Sea-Air Logistics Barely Viable 

Sea-air logistics are becoming increasingly impractical due to port congestion at key transshipment points. Congestion at Port Klang, Singapore, and Jebel Ali is causing substantial delays. The seven-day average vessel waiting time in Jebel Ali is now around three days. Transshipment lead times are increasing, and the viability of sea-air as a logistics solution is being questioned. Logistics providers are exploring new strategies to navigate these challenges and maintain service levels. 

DHL Launches Virtual Cargo Airline in Brazil to Enhance Supply Chains 

DHL Supply Chain has partnered with Levu Air Cargo to launch a private air transport service in Brazil. This new venture aims to provide a more reliable alternative to commercial passenger airlines and trucking for high-value goods in sectors such as automotive and healthcare. The new air cargo operation will initially connect Campinas and Manaus daily, with service between Campinas and Recife three times a week. This initiative is expected to enhance supply chain resilience and efficiency in Brazil’s logistics landscape. 

AI in Logistics Aims for Efficiency Beyond the Hype 

Despite the hype surrounding artificial intelligence, its practical application in logistics remains limited. While AI’s potential to enhance efficiency and productivity is recognised, integration challenges and the need for substantial data infrastructure are significant barriers. AI’s role in logistics is expected to grow, but human oversight will remain crucial for the foreseeable future. The industry continues to grapple with the gap between AI’s promise and its current capabilities, striving to unlock its full potential. 

House of Shipping Insight 

The latest Shipping and Logistics Industry News highlights significant challenges and innovations shaping the sector. The surge in spot rates and container shortages underscores the volatility in the shipping market, demanding strategic responses from shippers and carriers alike. Extended transit times and port congestion illustrate the ongoing logistical hurdles, while DHL’s venture into virtual cargo airlines marks a step towards more resilient supply chains. AI’s evolving role in logistics promises future efficiencies, but its full potential remains on the horizon. As the industry navigates these dynamics, proactive adaptation and technological integration will be key to maintaining competitiveness. 

Weekly Shipping & Logistics News Wrap, Week 22 

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