This week:

• Mediterranean and Asian ports are among those facing increased congestion amid several shipping lane disruptions
• CBP suspends shipment access for customs brokers taking advantage of automated filing and no tariffs for low-value items
• Air cargo’s “slow season” busier than expected as eCommerce demand remains high
• Asia-US container shipping reliability rates hit a six-month high
• Ocean shipping rates skyrocket as Red Sea disruptions continue and labor uncertainty

Global Port Congestion Leads to More Delays

Ports worldwide, particularly in the Mediterranean and Asia, face increasing congestion. This is a direct result of continued diversions through the Red Sea, changes in shipping routes, and weather disruptions, among the factors contributing to the worsening congestion.

At affected ports, vessel wait and dwell times are longer, leading to delays and scheduling problems. In response, carriers are consolidating cargo into fewer services. This, in turn, leads to larger parcel sizes, further straining ports’ resources.

According to Fabio Santucci, president of Mediterranean Shipping Co.’s US operations, the global container fleet is expected to reach 30 million TEUs in June, with six to seven percent of that capacity tied up by port congestion.

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CBP Suspends Low-Value Shipment Access for Customs Brokers

US Customs and Border Protection (CBP) suspended access to a low-value import shipments program for several customs brokers last week.

The Type 86 program allows a consignee to have its customs broker provide CBP with data filed through the agency’s automated broker interface. Under the de minimis rule, the program allows the import of one package per day worth $800 or less without filing a formal customs entry and without paying duties or tariffs.

The move intensifies scrutiny of foreign businesses such as Temu and Shein, which rely on the de minimis provision. CBP recently implemented stricter Type 86 filing requirements to crack down on counterfeit goods and illicit substances. The specific reasons for this past week’s suspensions were not made public.

Seko Logistics, one of the most high-profile suspended brokers, processes millions of packages annually under the de minimis rule. Seko spokespersons expressed disappointment with the suspension decision while pointing out the company’s high compliance rate. Seko is seeking reinstatement after receiving its CBP suspension this past week.

Air Cargo’s “Slow Season” Busier, Thanks to eCommerce Demand

Air cargo demand out of Asia to the US and Europe remains high in what is traditionally a slow season. eCommerce demand continues to fill all available air freight capacity out of Asia, just as carriers prepare for the peak summer travel period.

The unexpected air cargo demand spike aligns with Asia-Europe and trans-Pacific ocean trade routes, which are also seeing an early peak season. The ongoing Red Sea conflict helped drive air cargo demand earlier this year.

Analysts are already considering Q4 planning, as that is the traditional peak season. Shippers and forwarders are making early preparations as the industry shifts toward shorter-term contracts. Freight forwarders are seeking longer-term capacity, while airlines must balance current capacity commitments with the potential for higher revenue in Q4.

Asia-US Container Ship Reliability Hits Six-Month High

On-time performance from Asia to the US West Coast increased 9.6 percentage points month-over-month to 58.5% — the highest mark since last November, according to Sea-Intelligence’s Global Liner Performance Report.

Amid Cautionary Market, Ocean Shipping Rates Skyrocket

Rates from Asia to the US West Coast rose 70% from April’s lowest rate, while those to the East Coast increased by 18% week over week. Port congestion in Asia, particularly in Southeast Asian ports, Shanghai and Qingdao, further exacerbates the issue.

Salgado compares the rise in rates to the disruptions of the pandemic era. However, other analysts believe the current situation may not reach the same severity as the pandemic due to more moderate volume increases and the implementation of new strategies like off-port container yards.

Despite the uncertainties, consumer spending remains high and demand is expected to remain equally high. The looming peak season leads industry observers to believe shippers might face months of elevated rates and increased delays.