International Shipping Updates: July 2024

Summer is the time of year when most freight orders start to be placed to get ahead on inventory for back-to-school and holiday shopping. According to respondents of the CNBC Supply Chain Survey, based on the freight orders they are scheduled to move during peak season, U.S. companies will be importing slightly more items for the holidays this year as compared to last year.

However, shipping companies seem to be taking a cautious approach during the season.

“The past few years have made many shippers hypersensitive to the highs of the highs and the lows of the lows,” said Noah Hoffman, head of retail logistics for C.H. Robinson. “They’re wondering when the next shoe will drop – whether that might be geopolitical, new trade policy, or another physical disruption like the low water levels in the Panama Canal. But especially for retailers, they may wait to see how the economy shakes out.”

Port of Baltimore Reopening 

Nearly three months after the catastrophic accident that caused the collapse of the Francis Scott Key bridge, the Port of Baltimore fully reopened on Monday, June 12. The port had been closed since the cargo ship Dali crashed into the bridge early March 26. 

Now that the port has fully reopened, authorities expect commercial shipping traffic will soon return to pre-accident levels.  

Ruth Moritz, Vice President and General Manager of Global Relocation, outlined Interstate International’s plan for guiding clients through the Baltimore port crisis. “We worked closely with port operators on a daily basis to make real-time assessments to capabilities, strategically rerouting shipments based upon client needs and delivery date requirements,” said Moritz. “Leveraging our partnership with ground, rail and alternative port authorities ensured minimal disruption to our service offering.”  

Red Sea Crisis Still Plagues International Trade 

International shipping has been disrupted since November by attacks launched by Yemen’s Houthi militants in the Red Sea. Many vessels have opted to avoid the Red Sea route to the Suez Canal, taking the longer journey around the southern tip of Africa instead. These detours add 10 to 12 days per trip, leading to not only substantial cost increases, but serious environmental impact. 

“About 30 percent of trade goes through the Suez Canal,” said Patrick Ronas, President of the Association of International Shipping Lines. “Longer routes required by the current situation have increased travel distances for cargo and tankers by up to 53%, causing a rise in CO² emissions due to the additional fuel burned.” 

The Red Sea Crisis is also leading to a serious shipping container crunch at certain ports. Ocean carriers are skipping ports or decreasing their time at port, not picking up empty containers, to keep vessels on track for delivery. This container capacity crunch has fueled a sudden and surprise spike in ocean freight rates in recent weeks. 

Labor Issues Could Impact Shipping 

A recent New York Times article outlined some of the recent labor issues that could further impact international shipping:  

“In recent weeks, dockworkers have threatened to strike on the East and Gulf Coasts of the United States, while longshore workers at German ports have halted shifts in pursuit of better pay. Rail workers in Canada are poised to walk off the job, imperiling cargo moving across North America and threatening backups at major ports like Vancouver, British Columbia.” 

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