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Updated on December 21, 2023
The following information is built on market data from public sources and C.H. Robinson’s information advantage—based on our experience, data, and scale. Use these insights to stay informed, assist with decision making to potentially mitigate risk, and hopefully help avoid disruptions to your supply chain.
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Rising concerns about global warming and climate change has prompted the EU to make a collective effort addressing environmental challenges. Initiated in 2005, the EU Emission Trading System (ETS) is a market-driven mechanism designed to combat climate change by encouraging entities to reduce GHG emissions.
The ETS is aligned with the EU's goal to achieve carbon neutrality by 2050 and a 50% reduction in greenhouse gas emissions by 2030. The effort operates on a 'cap-and-trade' principle, progressively limiting the total allowable emissions.
Already encompassing over 11,000 installations such as power stations, steel producers, and chemical plants, as well as airlines within the European Economic Area (EEA), beginning January 1, 2024, the EU ETS will include the shipping industry, which is a significant contributor to greenhouse gas (GHG) emissions.
This extension, formally adopted in May 2023, will result in new carbon taxes affecting all shipping customers involved in transporting goods to, from, and within the EEA.
Under the EU ETS, carbon pricing is calculated based on vessels rather than cargo. Ship operators are required to report emissions and allocate allowances for each ton of CO2 generated. The applicable range of EU ETS differs depending on the calling ports of each service, and transshipment port protection measures are applied to neighboring non-EU ports within 300 nautical miles of an EU port if container handling at that port is more than 65% transshipped.
Emissions in the geographical scope of the EU ETS for shipping are as follows:
The carbon pricing increase will be phased in over three years, with companies submitting allowances for a greater percentage of emissions each year:
European Union Allowances (EUA) must be purchased and submitted annually.
Ocean carriers are implementing an ETS surcharge to cover the CO2 charge of shipping in the EU. Calculations per TEU will be based on the Clean Cargo methodology for CO2 multiplied by the market price for EUAs from the ICEDEU3 Index, updated quarterly. The ETS Surcharge, which varies depending on the trade lane, equipment time, and size, will become applicable for all cargo moving from, to or via Europe effective January 1, 2024.
Get help navigating the impact of the EU ETS—connect with our experts today.
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Seasonal demand, in large part made up of ecommerce goods, is expected to continue into late December. This will likely cause elevated general market rates. Capacity is tightening in certain areas, namely China, with other parts of the Asia region are not experiencing the issue as much, aside from the normal end of the year increase in demand. Capacity, rates, and demand are expected to normalize as 2024 begins.
Current market conditions across various regions show strain, characterized by tight capacity and mid-level spot market rates. In Africa, capacity remains flat month over month, contributing to limited options and a notable backlog for exports from Brazil due to airport terminal congestion.
LATAM to Asia experiences similar conditions. There is a downward trend in capacity and spot rates, driven by high demand during fruit season from Chile and Argentina to Asia, are rising. This is amplifying the export backlog from Brazil.
Though capacity is flat month over month, LATAM to Europe faces capacity constraints and rising spot rates. This impacts the ability to secure space for general cargo amid some regular perishables going into the region.
The Middle East encounters limited options and potential challenges in securing space for general cargo as tight capacity persists. There is greater demand for shipments to North America during the fruit season from Chile and Argentina into North America destinations, contributing to tight capacity and rising spot rates.
Latin America to Oceania has very limited options amid tight capacity and escalating spot rates. South Asia is undergoing a decline in capacity and heightened spot rates, especially driven by the fruit season demand from Chile and Argentina into Asia destinations.
Across these regions, a common challenge emerges with a backlog for exports from Brazil due to airport terminal congestion. If anything, it underscores the need for strategic solutions to effectively navigate the strained market conditions.
The U.S. export market is stable as demand remains low relative to capacity. Capacity is generally available globally with few exceptions.
U.S. imports continue to experience stronger demand from Asia during peak season than during the summer months. The record-setting November snowstorms in Alaska created a backlog that has yet to be fully cleared out.
Ecommerce demand has been the primary driver and should slow to some degree as the holidays approach. Since airlines will adjust capacity with demand, rates are likely to remain elevated through year end.
The Trans-Atlantic market has tightened in recent weeks as demand increases. The loss of capacity during the winter schedule is being felt in this market with spot market rates trending up. This condition will persist as long as demand remains elevated—expect relief in January.
The market is expected to return to pre-pandemic conditions in the first quarter of 2024. Capacity to Oceania continues to grow, and demand is softer than typical at this time of year.
For our inbound markets, demand is more than accounted for by available capacity. Outbound cargo is the same with some restricted lanes due to seasonal perishable cargo, such as stone fruit.
Since the start of December, there has been a noticeable uptick in cargo throughput within the air freight market in this region. Prices for shipping to Europe and the U.S. are rapidly rising. Securing available space is challenging, often requiring 3–4 days of lead time. The current scenario is further exacerbated by a peak situation originating from China.
Airline hubs are experiencing congestion due to the influx of high-yield cargo from China destined for the United States and Europe. Expect this challenging situation to persist until the end of the December—potentially continuing until the Chinese New Year.
Ocean freight demand on most trade lanes is not meaningfully increasing, and space continues to trend higher than demand. In parallel, additional capacity continues to be added to the global fleet as the record number of new vessels ordered by steamship lines over the past few years continue to get delivered.
However, the current low water level of the Panama Canal, and its effect on capacity, is another reminder of how external events impact the industry. More details on this to follow.
Rate gains on shipments traveling from Asia to Europe are likely to hold for the month of December due to stronger capacity utilization supported by traditional year-end cargo demand.
Trans-Pacific rates are not holding as strong due disruptions at the Panama Canal, which affected the East Coast. THE Alliance carriers have been forced to divert all three of their Panama all-water services to avoid lengthy delays at the Canal.
Due to the Panama disruptions and more backhaul moves, Asia–Europe and U.S. East Coast (USEC) routings via the Cape of Good Hope have helped partially mitigate the continual new vessel deliveries with the run rate maintained at over 200,000 TEUs a month, after taking into account the deletion of older ships from scrapping.
The extension of EU ETS limitations on ocean shipping starting January 1, 2024, is by far the largest disruption for this region. Read this month’s top story above for more details on this topic and its potential impact on your business.
Be sure to work closely with your C.H. Robinson representative to navigate these changes.
Due to low water levels, the Canal Authority has incrementally limited the number of vessels transiting through the canal per day. By February 2024, it is estimated only half the number of slots will remain compared to before the drought.
This creates three main challenges:
While the current post-pandemic market has brought relief in many aspects for shippers, it is important to keep in mind that planning and flexibility remain key to protect your supply chain.
A more rain-intensive spring has resulted in a decrease in the scheduled volumes of export fruits, reducing the projected shipments from South America to various markets. This includes a reduction in cherry volumes to be shipped, which will be lower than anticipated.
A recent study reports a remarkable 17.5% increase in available TEUs for services to the region in 2023. The total capacity of the container fleet traded to/from and within Latin America has increased by almost 562,000 TEUs in the last twelve months.
While there has been a decrease in imports to the region, the push for exports from South America to various destinations has been constant due to the seasonal commodity diversity of different countries. Shipping lines are focused on increasing volumes and offering competitive rates in the coming months if necessary.
DP World Callao has received 15 new, 100% electric cranes for the Bicentennial Dock. The cranes—3 dock cranes and 12 yard cranes—will increase the loading and unloading capacity at the terminal by 80%, reaching a total capacity of 2.7 million TEUs. This initiative will also reduce emissions by 30% as the cranes utilize 100% renewable energy.
A 20% decrease in Colombian imports means there are container imbalances for some shipping companies. Expect difficulties in replenishing empty containers for export.
The Brazilian coast is struggling with a lack of 20' containers and special equipment. Exporters' forecasts must be considered at least two weeks in advance (on average) to have equipment repositioned and available.
The summer season is impacting the ports in southern Brazil, and excessive rainfall has flooded cities in this region. Navegantes Port closed during the entire month of October, and there still is a backlog. There is no normalization foreseen to operations due to the adverse weather conditions expected.
In the north region, Manaus and Vila do Conde Ports are facing several droughts, and the water level is too low. Port capacities are reduced and ships must operate lighter than usual. Most carriers are applying the low water surcharge (LWS), and transshipping can occur.
The Port of Montréal contract expires December 31, 2024. Negotiation teams continue to discuss demands, but initial discussions are appearing unfavorable. Dock workers at the Port of Montréal are seeking wage increases of at least 20% over four years and full job security after three years.
Given the historical challenges in negotiations at this port, compounded by the recent Vancouver strike, anticipate a protracted negotiation period. As news breaks, review C.H. Robinson client advisories for more detailed information.
U.S.–Asia
U.S.–Europe
U.S.–LATAM
U.S.–Oceania
U.S.–SAMA
The Trans-Tasman market has continued to soften. Space and equipment availability is still widely open. Rates are being reviewed regularly with the introduction of new options in this trade lane.
Direct carrier space is stabilizing from the USEC and continues to be open off the USWC while trans-shipment service options are widely available. Rates have stabilized with supply versus demand being okay.
The Europe to Oceania market continues to see direct carriers trying to hold market share. Rates are revised in small increments as supply continues to outweigh demand, with space and equipment readily available for dry cargo.
Northeast Asia supply continues to tighten as carriers increase blank sailing/port omissions, while demand remains steady from Southeast Asia to Oceania. General Rate Increases (GRIs) are being implemented from Northeast Asia to Australia, Australian East Coast ports, and New Zealand.
Export rates are under pressure. Wastepaper, grain, wool, and cotton/cotton seed are still moving in large numbers with load factors strong for the next month but is coming up against constant competition and rate pressure. It is difficult to forecast 20' GP/food quality capacity for Melbourne and Adelaide during solid grain season.
Feeder space to ISC is tight across most carriers with small allocations against demand from Singapore.
In South Asia, across various trade routes, market conditions are stable with relatively open capacity and low spot market rates. However, tight space and increasing rates in Pakistan are notable due to the ongoing mango season, while potential disruptions in the Middle East, particularly in Israel, may impact services in that region.
In the Middle East, overall market conditions are strained, marked by tight capacity and mid-level spot market rates, particularly from the Gulf, with potential service disruptions due to the conflict in Israel. However, there is a trend of decreasing rates and available space out of Turkey, providing some relief in certain trade routes.
In African trade routes, market conditions vary, with generally stable conditions in Asia and Oceania, but strains in routes to Europe and North America due to tight capacity and mid-level spot market rates. Notably, North Africa rates are consistently up. Recommend booking in advance for certain regions, while conflicts in the Middle East and holiday seasons impact rates and space availability.
The domestic transportation market is stronger with the arrival of the traditional peak season. Freight rates are experiencing a brief rebound compared to third quarter. The transportation market is expected to hold steady until the end of 2023. However, due to the decline in overall demand compared to last year, trucking capacity is still in a surplus state and asset-heavy transport fleets are under pressure to feed drivers and vehicles.
Transit time at Pingxiang port from China to Southeast Asia is around 3–4 days as there is a volatile rise of the cross-border trucking demand. Meanwhile, there is no congestion for import trucking from Southeast Asia to China after fruit season.
A CO2 emissions tax of €200 per ton in road tolls for heavy good vehicles began on December 1, 2023, under an agreement by the ruling of the German Federal Ministry of Transport and Digital Infrastructure.
This increase impacts all cargo movements carried out by vehicles over 7.5 tons, such as:
Atlanta
Savannah
Charleston
Minneapolis/Omaha/Chippewa Falls/St. Louis/Kansas City
Houston
LA/LB ports
The contract between union labor and the port of Montréal authority expires on December 31, 2023. Contract talks have begun. Based on initial reports, the two sides are far apart. If there is any disruption to the port of Montréal operations due to these negotiations, anticipate significant cargo diversion to the USEC and Halifax/Saint John ports.
Australian port logistics and landside container transport services are operating at below optimum levels due to the ongoing Planned Industrial Action at DP World Terminals across Australia.
Work bans and stoppages are scheduled to continue throughout the month of December impacting Brisbane, Sydney, Melbourne, and Fremantle terminals. Monitor the situation and look for updates via C.H. Robinson Client Advisories.
Visit our Trade & Tariff Insights page for the latest news, insights, perspectives, and resources from our customs and trade policy experts.
Australia is experiencing delays with the processing of quarantine entries and longer delays where cargo inspections are required. In New Zealand, customs and processing times are currently operating at levels within capacity with no reported delays.
As a reminder, The Department of Agriculture, Forest and Fisheries, Canberra Office will close from close of business Friday, December 22, 2023, and will re-open at the commencement of business on Tuesday, January 2, 2024.
Receive notices on changing regulations when they happen.
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Use this tool to forecast how capacity and rate trends impact your business. Create customized, shareable reports by adding your preferred trade lanes. Ocean and air shipping routes are updated on the third Thursday of each month.
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Stable: Green – Relatively open capacity and low spot market rates
Strained: Yellow – Capacity is tight and mid-level spot market rates
Critical: Red – Backlog of capacity and high spot market rates
Explore the difference between wheeled and grounded U.S. inland terminals with Jenna Kuehn, Director of Global Forwarding Inland at C.H. Robinson.
Learn about the dynamics behind equipment shortages in the U.S. inland market with Jenna Kuehn, Director of Global Forwarding Inland at C.H. Robinson.
Help minimize supply chain disruptors, while providing ways your supply chain can tackle the peak season. Included are key solutions you can adopt to lift the strain on your business and reduce the impact it can have on operations.
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