For this week’s logistics market update, ocean and air capacity out of the Indian Subcontinent remains tight as export demand continues to surge, European port congestion is limiting throughput at major North Sea gateways, a new transpacific GRI is set to take effect August 1st, and a major North American rail agreement could reshape Chicago-area intermodal routing for the future.
Read on for the full scoop, including the latest Section 301 tariff update!
Transpacific – GRI
- Carriers have announced a new General Rate Increase on the transpacific eastbound trade effective August 1st.
- Initial indicators suggest a weakening of demand as we move into August.
We recommend shippers avoid booking in the first week of August where possible and target later sailings.
Air Freight Market
- Air cargo capacity remains tight across Asia and the Indian Subcontinent.
- Most carriers now require several days’ advance booking to secure space to the U.S. and Europe.
- Following the Middle East tensions and a sharp rise in jet fuel prices, Cathay Pacific, EVA Air, All Nippon Airways, and Japan Airlines have announced cargo fuel surcharge increases effective August 1.
- Korean Air is an exception; they are continuing to reduce surcharges on strong cargo demand.
- Airlines continue to prioritize contract cargo, pharmaceuticals, automotive, and e-commerce shipments as spot space remains extremely limited.
Panama Canal Restrictions
- The Panama Canal Authority has reduced daily transit slots due to ongoing drought conditions.
- Several major carriers have announced new Panama Canal-related surcharges on Far East-North America routings.
Ocean Freight
India Export Market & Capacity Response
- Export demand out of India to the U.S. East Coast continues to outpace available vessel space.
- CMA CGM is reviving Suez Canal transits for its India-U.S. East Coast “Indamex” service to restore a full weekly rotation, following a similar move by Maersk.
- The Suez shift is expected to shave several days off westbound transit times once fully phased in.
- Space out of Nhava Sheva and Mundra remains scarce, with monsoon disruptions and Indian port congestion adding further pressure to the trade.
- Maersk has introduced a new “heavy load” handling surcharge on overweight Indian 20-foot export bookings moving to North Europe.
Port Congestion in China & U.S. West Coast
- Typhoon Noul made landfall near Guangdong in late July as the strongest storm to hit China this year. As a result, flights were disrupted at more than 30 southern China airports, and gate operations were suspended at Yantian, Shekou, Dachan Bay, and Guangzhou Nansha.
- Operations are returning to normal, but residual vessel and rail backlogs are expected into next week.
- A mechanical failure at the Long Beach Container Terminal has taken roughly half of its cranes out of service.
- A growing backlog of rail-bound containers has built up and is not expected to fully clear until September.
Europe Port Congestion
- Strong growth in Asia and North America trade volumes was offset by a sharp drop in transshipment activity tied to limited terminal capacity.
- Rotterdam and Antwerp currently have little to no buffer capacity to absorb seasonal spikes, missed berthing windows, or weather disruptions.
- Additional terminal capacity is expected to come later this year.
Customs Update: Section 301 Tariffs
- New Section 301 duties tied to forced-labor concerns took effect July 24, replacing the expired Section 122 global tariff.
- Duty rates now vary by country of origin, with separate rate tiers for a group of 17 economies, for the EU, Japan, South Korea, and Taiwan, and for a broader group of 38 economies including Mainland China, Hong Kong, Vietnam, and Australia.
- Cargo already loaded onto vessels before July 24 and entered before July 28 qualifies for an in-transit exemption.
When submitting for a refund, confirm country-of-origin documentation and classification with your compliance team given these new changes.
North American Rail & Intermodal Update
- Union Pacific and Canadian National have signed an agreement under which CN would withdraw its opposition to UP’s proposed merger with Norfolk Southern.
- In exchange, UP would grant CN new rail rights between eastern Canada and Kansas City, and between Memphis and Eagle Pass, Texas. UP would gain expanded operating rights on CN’s Elgin, Joliet & Eastern beltline around Chicago.
Plan Ahead
With India air and ocean capacity critical, Asia and U.S. West Coast port congestion ongoing, and North Europe gateways running with little buffer capacity, early planning and flexibility remain essential across all modes of transportation.
Be sure to book air shipments several days in advance to secure space to the U.S. and Europe. Book ocean shipments as early as possible and avoid relying on spot market availability, particularly ahead of the August 1 GRI.
If you have upcoming import or export shipments, our team can help you secure space, navigate these market changes, and avoid potential delays!
