Transportation & Logistics Analysis

Rotterdam - New York: high freight rates considering the season

July 10 2019

Mid-July is usually the beginning of a slower season for transport from Europe to the US, with some rate erosion going with it. But so far this year, this is not the case.

Some key factors can explain why the traditional 1st of July general rates increase has been so successful from the carriers’ side, unlike what normally happens.

- Fear of a US tax policy change on European imports. The fear focuses mostly on two families of products, which are feeling the pressure: wines and spirits, and cars. The first mostly impacts France, while the second impacts Germany. We can’t talk about a cargo rush so far, but some orders are anticipated.

- The shipping company APL (CMA CGM Group) could withdraw, as a brand, from the Transatlantic trade, because of its progressive integration into CMA CGM. This would take a historical player out of this trade route.

- The announcement from the US Customs of the temporary suspension of MSC’s preferential agreement following a record drug seizure. MSC’s customers may have to temporarily re-organize their cargo distribution between carriers to minimize risk during this period of time.

- Capacity is really stable on the trade.

Capture d’écran 2019-07-11 à 10.45.41

Historical view on average rates in Port to Port (with THC) estimated by Upply over the past 24 months – July 10th, 2019

Photo credit : Image by Vlad Man from Pixabay 

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Expert in Ocean shipping for 25 years, Jerome puts all his knowledge of the industry to contribution for Upply. Ship captain at heart, he has written the English-French Lexicon of Containerized Shipping (Paris: CELSE, 2001).
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