Carrier discipline extends the trans-Pacific peak season, and Panama Canal delays reach the East Coast

Figure of the week

56.4% Shipping schedule reliability fell to 56.4% in July - a significant number for several reasons. The figure marks the lowest level since February 2025 , and the weakest performance since the current alliance structure was introduced.

Quote of the week

At the top of every market cycle, we always hear arguments from carriers as to why the order book is not a problem… (and) how they will not allow rates to go below cost. But when we look at the numbers, we get a distinct feeling of déjà vu.

Sea-Intelligence cast doubts on the current bullishness being shown by ocean carriers and warns that the current spike in volumes will be followed by a downturn due to growing capacity.

Carrier discipline leads to peak season payoffs

Tight capacity discipline by ocean carriers has enabled them to sustain the peak season well into September on the Trans-Pacific trade. Last week saw a 3% week-on-week rise from Shanghai to New York , while Shanghai to Los Angeles was up 5% on the previous week. The major reason for the fresh spikes in rates was a new round of GRIs introduced on September 1 . Carriers have had a significant degree of success with their recent rate increases. Strict capacity management has played a big role. One industry insider paid tribute to the extent to which carriers have been able to implement strategically targeted blank sailings, modify vessel rotations, and switch capacity between lanes to maintain pricing power. At the same time, they have been assisted by strong consumer and commercial demand, with volumes rising 9% week on week to the West Coast and 3% to the East Coast. However, there is a hard limit on how long this extended peak season can last. The end of September marks the point when the ex-Asia shipping window to get goods on US shelves closes. For now, however, shippers should prepare for more of the same. Drewry’s Container Capacity Insight said the Trans-Pacific was due to see six more blank sailings next week , twice as many as last week. This is likely to keep rates stable for the next week at the very least and represents a marked contrast with Europe, where several carriers have begun discounting rates. Transatlantic shippers should also expect to see strong demand on the trade start to ease. Volumes are likely to fall despite several carriers’ attempts to impose surcharges. It isn’t clear at this stage whether the market will sustain any attempts to hold up rates. Shippers may find that within a week or two they are beginning to hold the upper hand.

Tight capacity counteracts seasonal air freight lull

There was little sign of the traditional summer slowdown for air cargo rates in August as capacity constraints counteracted the traditional seasonal fall-off in demand. Ultimately, however, that same fall off in demand is likely to lead to a quieter Q4 . “We are not picking up signals on a big uptick in demand in the coming months,” says Xeneta Chief Air Freight Officer Niall van de Wouw. “We think air freight rates will go down further, just not as quickly as shippers want to see. It remains a seller’s market.” Rates from China and Southeast Asia to Western Europe were down between 6% and 7% a month, significantly less than the 22% drop seen in July. However, it was a different story from Asia to North America, as AI-related demand remained strong. Spot rates from Northeast Asia and Southeast Asia to North America are up 36% and 34% from this time last year. IATA’s Marie Owens Thomsen said that higher fuel prices, geopolitical tensions, and tariff uncertainty would need to be watched closely by shippers looking ahead. However, overall economic conditions were likely to continue to foster air cargo demand, she said. Witness some of the latest data indicating that manufacturing output and export orders in August were set to expand. Markets such as Vietnam and Taiwan that play a major role in producing semiconductors and data center-related equipment are particularly strong. Other factors impacting markets out of Asia include maxed-out freighter demand, with little change likely to be seen in coming months. Shippers, then, should be prepared for more volatility ahead in air freight markets as Q4 progresses.

Panama Canal delays start to impact US East Coast

A growing backlog of ships at the Panama Canal caused by low water levels and draft restrictions is having major knock-on effects on US East Coast vessel delays. In some cases, delays are stretching to weeks and pushing peak season cargo towards the West Coast. Delays for vessels entering the Panama Canal have forced some carriers, such as OOCL, to avoid the canal completely on their latest services. That came after the OOCL Lavender spent nine days outside the canal’s Pacific locks. CMA CGM has also decided to bypass the canal and use a one-time Suez Canal transit. Another factor complicating service reliability is the ongoing recovery from the string of typhoons in China . Analysts had warned that the series of typhoons would cause congestion for weeks ahead, and they have been proved right. At this point, cargo is piling up at affected ports. Shanghai is estimated to be seeing loading delays of between three and eight days . Delays at Ningbo are up to four days. Many carriers have begun to skip port calls at the worst-affected Chinese ports. Shippers have been warned not to expect any quick relief. Congestion at Chinese ports is expected to persist through September . Further draft limits at the Panama Canal are likely to cause even more delays in that area. Shippers, then, should be on the alert for other carriers to divert or reroute services and for further delays. ❓ Got a question about your flows? We answer it in an upcoming edition.

Ask your question Did you know?

With Chinese port disruption and Panama Canal draft restrictions already causing schedule unreliability, shippers are bracing for new delays as a result of strikes at key European ports . Strikes by dock workers in Germany and Dutch unions are set to add to delays.

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Sources

• The Loadstar - Late peak demand sees container spot rates to the US surge
• The Journal of Commerce - Asian exports lift air freight demand as summer slowdown fails to bite
• The Journal of Commerce - Ocean carriers skipping Panama Canal, China ports as delays mount
• Seatrade Maritime - Shippers getting less bang for lots of bucks
• The Loadstar - Congestion and ship delays take 2-3M TEU capacity off the market
• The Journal of Commerce - Port strikes hit Europe as schedule reliability drops to single digits