• 11 min

Current Position | Weekly Briefing August 12th - 18th

The Expeditors Podcast

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You're listening to Current Position, a weekly briefing from Expeditors mapping the shifts across trade compliance, regulatory changes, and global supply chains, plus some market insights from our Senior Vice President of Global Ocean, Adam Kord.

I'm Chris Parker, and here's the latest from August 12th to August 18th.

Global Customs & Trade Market

Starting off with global customs and trade, a US trade report shows the White House wants an AI-driven process to support a crackdown on tariff dodging through transshipment. The report states the administration believes moving China-based goods through other countries may cost the Treasury tens of billions of dollars a year, with 40 countries carrying an elevated risk for these activities.

The UK is moving customs checks to facilities at Dover and Eurotunnel beginning early 2027. HMRC plans to transfer customs functions from the Sevington and Holyhead inland border facilities into port operated infrastructure. This means Sevington will stop acting as an office of departure or destination for common transit convention movements, and certain types of transits may require new approvals. 

Global Ocean Market

Moving on to the ocean market, container rates rose a second straight week as transpacific gains outweighed softer Asia-Europe trades. Drewry's World Container Index showed routes such as Shanghai to New York jumping 10% and Shanghai to Los Angeles up 6% as carriers blanked a large number of sailings. Routes along the Asia to Europe trade lane softened, with Shanghai to Genoa down 8% and Shanghai to Rotterdam down 5%. The wider market stayed disrupted by Suez and Hormuz security concerns, Panama Canal limits, typhoon impacts on port congestion in China, and record low Rhine River water levels.

An earthquake off the western coast of Colombia last week has had lasting effects. CMA CGM says it is actively monitoring the situation and implementing measures to ensure operational continuity despite continued effect on port operations in and around Buenaventura. Part of the continued disruption stems from ongoing landslides and instability of the Cali-Buenaventura corridor leading to the port.

German dock workers staged 24-hour strikes at six North Sea ports in an escalating wage dispute. The ver.di Union called out roughly 11,000 workers this week at Hamburg, Bremerhaven, Wilhelmshaven, Bremen, Emden, and Brake after members rejected a recent offer. ver.di is seeking an 8.2% wage increase, whereas employers are offering 5.1% over 19 months. No date is set for additional bargaining, so additional strikes are possible. 

Global Air Market

Moving on to global air, early August saw global air cargo volumes and prices sliding. Numbers from World ACD reported Week 32 global tonnage was down 4% week on week, with declines from every origin. The average rate slipped to $2.95 per kilo but was still up 22% year on year. Typhoon Dolphin cut Shanghai outbound weight by 8% and triggered 1,000 plus flight cancellations.

And finally, onto global ground transport. US truckload line haul rates hit a four-year high in July, even as freight volumes stayed soft. Cass Information Systems' Truckload Linehaul Index rose 2.3% from June and 8.6% year on year, its 19th straight annual gain and the largest in four years, despite shipments falling 4.8% year on year. Cass attributed the pricing strength largely to declining carrier capacity, plus a 'flight to quality' as shippers favor compliant, reliable carriers ahead of peak season. The read-through: contract rates are firming into 2027 bids, even in a soft volume market.

Irish haulers warn some operators, 'Won't make it to Christmas,' as diesel costs climb. Irish diesel jumped 19 cents in a month to average 1 euro and 92 cents per liter, an 11% increase. This occurred as the government plans to begin restoring 32 cents of fuel taxation between September and December. The diesel rebate scheme's maximum repayment also drops from 12 to 7.5 cents on October 1st.

Next up, Adam Kord.

Chris Parker: Adam, what is on your mind this week?

Adam Kord: So, Chris, uh, thanks for the time today, but when we discussed a couple of weeks ago, I was talking about the Panama Canal and what that could do to capacity. And, uh, things haven't improved in, in Panama. Still really dry. Uh, Lake Gatun is not getting all that, that nice rainwater and other things that they need. And, uh, over the weekend, I heard there was about 100 vessels waiting access to get in. Okay. So those are all different types of vessels, so they're starting to do some restrictions of all different types of watercraft. It hasn't started to hit the container market yet, so container vessels have not been restricted. However, the Port Authority has started to reduce the draft levels. So, in case you may or may not know, a draft is how far that vessel can be in the water. Clearly, if there's a vessel that's carrying a lot of containers, it's going to draft deeper than a vessel that's not carrying a lot of containers. And what the Port Authority did is they reduced that by six inches on August 15th to 48 and a half feet. On August 26th, they're gonna reduce it by another six inches to 48 feet, and then September 3rd by another six inches to 47 and a half feet. So again, they're reducing the depth that the vessels can go in, and after they get to a certain threshold, that's when they'll start doing restrictions of the amount of vessels that can go through.

So we're gonna continue to watch the situation in Panama close, but what I really wanna talk about, what's on my mind today, is on the other side of the earth, in Europe, the Rhine River is at historically low water levels, and it's causing some significant disruptions and causing some issues to container traffic. So, a little background. The Rhine River is, uh, a primary thoroughfare for barge traffic and for containers that are coming into Antwerp or Rotterdam. So cargo gets unloaded coming from Asia or from Latin America or from all over, gets unloaded in a place like Antwerp at the terminals or Rotterdam at the terminals, and then there's a lot of containers that move on barges that ultimately end up in Germany and other places in Central Europe. And, and what's going on right now is there's been a drought in Central Europe. We hear about that. There's been a record heat, which causes higher evaporation rates, which is also bringing down the water levels, and last year wasn't a very good snow season. So there was reduced snowpack, it melted earlier, and the water levels are just low. And rainy season hasn't happened, and it's really, really hurting capacity. So the amount of barges that typically go through have been... They can't carry as much cargo. So let's just say that if you're a, a small container barge and you typically handle 80 containers, we're seeing instances where they're only able to carry 20 to 30% of what they, they once had. 

Chris Parker: Oh, wow. That's a big cut. 

Adam Kord: Yeah. So what they're doing is the operators have introduced more barges to fill up that capacity, so they've brought in additional barges, but what does that do? That causes congestion both in Antwerp and in Rotterdam, but at also the downstream destinations. 

Chris Parker: By adding those barges in through the Rhine River, is that causing equipment shortages on, on other routes or, or for, for other uses? 

Adam Kord: Yeah, absolutely. Yeah. So they're having to move equipment and pull from other markets. And it's not only affecting the barge or the river traffic, but when you're reducing capacity by more than 50% in certain cases, that's pushing a lot of cargo that was once moving on the, on the rivers to trucks. So it's caused strain on that market as well. And with these things we see, and with the cost of fuel up substantially now, not as much capacity on the road due to extra traffic coming through, it's causing quite a bit of a mess over in Europe. 

Chris Parker: So, regardless, equipment strain had happening either on water or on land and having ripple effects out in their respective markets. 

Adam Kord: Exactly. And it has caused an issue too then on, you know, domestic as well. 

Chris Parker: So then, for folks listening, what can they be thinking about as they're doing their planning, their forecasting and, and such? 

Adam Kord: Well, a couple things. One, clearly, if you're moving cargo into Central Europe, right, there's delays. Right? So with the, with the congestion, don't be surprised by delays. Don't be surprised that if you're expecting a 30-day transit, it becomes a 35-day transit. Expecting a 55-day transit, it becomes 65 days. Transits will be elongated. Second one is, as we, we hate it in these situations, but costs are clearly going up. The operators having to bring in additional equipment, additional barges, not able to handle as much. That throws off the economies of scales. We're seeing rates go up, surcharges in the markets, et cetera. So, elongated transits, additional costs. So this is why we say, yeah, do your best, engage with your service provider, you know, your Expeditors representative if you're using us. And then also be flexible, right? Because everything is changing rapidly, and you might have to, if you're typically moving your goods via ocean, you might need to pull a few orders out and move them via another means. Or, or look at a different route. 

Chris Parker: And I know it's hard to pin down, like, what kind of example good flexibility looks like, but it sounds like no matter where you go, there's strain, right? Whether you're moving on ground or on, on ocean. How can one be flexible and mitigate that kind of strain? 

Adam Kord: Yeah. And I think it's just looking at everything at the time of booking. Our, most companies are, are dropping a purchase order 90 days out, 120 days out, or even 60 days out, right? When people are sourcing goods or, or planning, that's typically not the week before. So when you do that, engage, talk about what could happen. Look at legacy transit times, might not be a good legacy transit time. You have to look at something different. So it's just planning, communication, and keeping your options open. 

Chris Parker: Well, what's getting you out of bed these days, then? What's the good news? 

Adam Kord: What's the good news? Um- Good news is, uh, you know, uh, sports, NFL's right around the, the corner. And then, uh, and then my kids, right? Yeah. Family's always keeping me super active. Yeah. So there you go. All is good. Sports and family. 

Chris Parker: All right. Cool. Thanks a lot, Adam. 

Adam Kord: Appreciate it. All right. Thanks, Chris. Talk to you again next week. 

You are now at our current position. Links to everything we covered today, plus some extra articles of interest, are in the show notes.

And while you're there, check out the events and webinars we flagged for the weeks ahead. Thank you for listening, and we'll see you next week.

Be sure to subscribe to your preferred podcast platform so you don't miss future episodes. To learn more about Expeditors, you can find us on LinkedIn, Facebook, Instagram, and X, or simply visit us at expeditors.com. Take care, and I'll see you next time!