Ocean carriers on the trans-Atlantic route have announced peak season surcharges (PSSs) set for September 1, 2024, in an effort to reverse the ongoing decline in westbound rate levels, despite a 7% increase in US import volume from North Europe during the first half of the year. This marks the first rate increase attempt since February, with Mediterranean Shipping Co. imposing a $1,000 per FEU surcharge, Hapag-Lloyd setting theirs at $800 per FEU, and other carriers following suit with varying increases. However, market response has been mixed, with some carriers offering long-term deals despite the planned rate hikes, and concerns over the sustainability of these increases due to continued overcapacity and minimal blank sailings.

In addition to the rate increase attempts, the trans-Atlantic trade lane faces potential disruptions from looming labor disputes at US East and Gulf coast ports. Negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) have stalled, raising fears of a strike if an agreement isn’t reached by September 30, when the ILA’s master contract expires. A strike could severely impact supply chains, with few alternatives available for shippers. Market analysts suggest that unless significant disruptions or port closures occur, carriers may struggle to enforce the proposed rate increases. As the September deadline approaches, shippers are preparing for potential turmoil, which could drive a surge in cargo movement and further complicate the rate dynamics on the trans-Atlantic route.

Source: Journal of Commerce