Interlog Insights

August 2023

The following is an archived collection of our weekly insights through the month of August. Those who had signed up to our Interlog Insights newsletter received each week’s update to their inbox on the original release date. If you like what you see below, please feel free to sign up yourself to get these updates right as they come!

This month's insights

Week 4 - Originally released August 25

Recap: A Wild Month of Weather for Logistics

Week 1: A Hot Summer and its Impacts on the Supply Chain

Recap: Wildfires and flooding in Canada have been running rampant throughout this summer, which has caused some Class I railroads to adapt their operations.

Additionally, low water levels on the Rhine River in Europe also gradually returning to normal, after dealing with drought. The waterway is an important shipping route for many commodities including grains, minerals, coal and oil products.

Week 2: Humanitarian Logistics Groups Start Relief Efforts after Hawaii Wildfires and NOAA Forecasters Revise Original Hurricane Season Prediction

Recap: We discuss how American Logistics Aid Network (ALAN) has put together relief efforts to help aid in the aftermath of the Hawaii wildfires.

Plus, the National Oceanic and Atmospheric Administration has revised their original Atlantic hurricane season prediction.. they say it will be an “above-normal” level of activity.

Week 3: Congestion/Delays at the Panama Canal Likely to Continue Due to Drought

Recap: The Panama Canal has constantly been in the news throughout this year, due to the drought and the El Nino Phenomenon.

This has cause the Panama Canal Authority to implement draft restrictions and limiting the number of authorized vessels to pass through per day.

Latest Updates: The Panama Canal has extended transit restrictions through September 2nd. This will keep the number of vessels that are authorized to pass per day, to a maximum of 32.

Recap: A Year in Review, Celebration of One-Year of Interlog Insights!

Week 3 - Originally released August 18

Insight: Transatlantic - The Lane of Pain for Carriers

The last two weeks we’ve covered the market acceleration in the Pacific. From aggressive capacity management to higher demand, this sphere of global trade has sharpened in the second half of 2023.

While the Pacific continues to step with some pep, America’s other notable import market has stuttered in comparison.

The transatlantic westbound lane is currently juggling low demand and a surplus of capacity. Shipping lines are treading water to make a profit as floating rates are drowning under pre-pandemic levels.

With great pace, we’ve arrived at a soft Atlantic market

This current status of inbound trade arrived in the Atlantic with great pace.
Towards the beginning of the year, this trade was actually one of the few remaining that shipping lines could still net generous returns from.

As the transpacific softened like an elephant getting eight-hours’ sleep on a Tempur-Pedic mattress, the Atlantic miraculously staved off the impacts of a global decline in international shipping.

In fact, the lane became a gold rush as its high rates went unperturbed earlier in the year.

Major lines shifted their vessel capacity from the Pacific to the Atlantic opting for lucrative westbound services into the U.S. from Europe.

The party was fun while it lasted, but the profitable rates posted in this lane were not a sustainable trend. They were more left over from a wild two-years rather than a residual reflection of high demand.

Just like other trades, import volumes have been declining in the Atlantic since the start of the year and, unlike the Pacific currently, still are.

The Journal of Commerce reported an 8.2 percent decline in first-half volumes at Rotterdam, Europe’s largest port, while Belgium’s Antwerp-Bruges endured a sharp drop as well in its throughput.

The lane of profit is now the lane of pain (for the shipping lines).

Rates have tumbled, shippers find themselves in control

“In some cases, we are not even making our costs,” shipping line Hapag-Lloyd’s CEO Rolf Habben Jansen said in an online panel discussion organized by the carrier.

Since the turn of the second half, inbound rates from Europe to the East Coast have tumbled. Freightios Baltic Container Index reports average rate is at $1,634 per unit. In late June, this number was $2,082 per unit.

Shipping lines prospecting high Atlantic rates like 49ers for gold can be mostly blamed for the trade’s second-half downfall.

Their profit pilgrimage, which included reallocating ships to the Atlantic, ultimately has led this pickle—a market with dormant demand oversaturated with excess capacity.

Many services are underutilized as shippers have a lot of options to sift through. It’s a similar phenomenon the Pacific experienced earlier in the year—the shippers are in the driving seat.

How will carriers react?

The question that remains—will carriers be an annoying backseat driver?

The answer is yes…if we’re going off what we observed in the Pacific. Rampant blank sailings, noisy rate increases, and even slow steaming could be playing cards to resuscitate the market in their favor.

However, as unpopular as those tactics are for shippers, they have also proven to be unsustainable to prop up a weak market. They really only leave their mark once there’s enough organic demand to stimulate a playing field.

At this time, there’s been no sign that shipping lines are taking an aggressive approach in the transatlantic, but if they do, we should expect to see something fairly soon.

Insight: Humanitarian Logistics Group Starts Relief Efforts after Hawaii Wildfires

American Logistics Aid Network (ALAN) has started relief efforts in response to the Hawaii wildfires.

ALAN, which was founded in 2005 after Hurricane Katrina, exists to provide supply chain assistance to humanitarian organizations whenever weather disasters occur.

ALAN is also an active logistics disaster relief educator and integrator.

Late on August 9, ALAN received its first request for logistics assistance – moving communications equipment to support shelter facilities near Lahaina, per the group’s website.

ALAN expects to see more requests in the coming weeks and months, after more assessments have been made.

Insight: NOAA Forecasters Revise Original Hurricane Season Prediction

The National Oceanic and Atmospheric Administration (NOAA) have increased its original Atlantic hurricane season prediction.

The original prediction thought the hurricane season would be “near-normal” level of activity… their revised predictions says it will be an “above-normal” level of activity.

According to a lead forecaster, Matthew Rosencrans, “some of the main climate factors that have been expected to influence the hurricane activity is the ongoing El Nino phenomenon and the warm phase of the Atlantic Multi-Decadal Oscillation, including record-warm Atlantic sea surface temperatures.”

Week 2 – Originally released August 11

Insight: Transpacific - Carriers Reenter an Approachable Market

Last week, we attributed the rate rise in the transpacific market to crafty capacity management by carriers and a gradual increase in shipper demand.

The latter is intriguing as it serves as a healthy, organic, driver of elevating the market.

FreightWaves SONAR reported bookings were near their 2023 high last week, up 13 percent from levels at the same time of year in the pre-pandemic 2019.

As a result, it’s clear to see carrier tactics, like rate increases or blank sailings (a capacity crunching technique), have a little more umph too them when propped with waking demand.

Shipping lines eye profit after months of losses

Throughout 2023, the issue for carriers, or shipping lines, has been bookings being placed on the spot market at rates much lower than contracted ones committed earlier in the year.

While many importers awarded a mix of their volumes right away to contracts, they also left a fair share behind as poker chips to cash out on deteriorating open market rates.

For much of the year, they were rewarded by hedging their bets. The balance of power between shipper and carrier reversed dramatically—the carriers no longer had firm control and shippers could skip stones across the Pacific at pre-pandemic rates.

One would think this role reversal would panic the shipping lines—and, to a degree it did—but they ultimately insisted the market would pick up later in the year, thus propping up spot rates at or above contract levels.

This bravado was prophetic.

Xeneta reported last week’s container rates to the West Coast averaged $1,954 per FEU, a notch higher than average long-term contract rates of $1,874 per FEU.

This is the first time since June 2022 where the spot rose above contracted rates.
While there’s still a lot of time left in the year, the gradual rise of rates continues, signaling a more approachable market for shipping lines.

Mid-August rate increases are queued up

As said earlier, growing demand has made carrier tactics a lot stickier.

In early spring, very few importers would bat an eye at carrier-imposed rate increases. These surcharges would slide right off within a week or so.

But, now it’s different. The summer waves of July and early August increases have shown no signs of receding.

By Tuesday, major carriers are implementing another round of increases as we hit mid-August. China’s base ports to the West and East coasts are anticipated to see a $400 to $500 knock up per FEU.

NEW Podcast Episode: Trucking Giant's Downfall and Ship Congestion Talk

Interlog’s Emily and Rachel discuss current industry headlines for the eleventh installment of the FreightFM podcast. Get comfortable – this includes ship congestion at the Panama Canal, LTL-giant Yellow’s bankruptcy, and August freight rates.

Insight: Congestion and Delays at the Panama Canal Likely Continue Due to Drought

It’s been quite the dry season for the Panama Canal and with that, has caused a significant drought, causing congestion and delays at the Canal.

As of Wednesday August 9th, CNBC reported 154 commercial vessels were waiting to cross the Panama Canal, with an average wait time of 21 days.

The Panama Canal Authority is continuing to limit slots for carriers to book, so they can manage and reduce the congestion.

Back at the end of July they limited the daily transit capacity of the Panama Canal, to 32 vessels per day. Before the water conservation measures, those transits were 34 to 36 a day.

“Through regular updates, transparent dialogue, and close collaboration with shipping lines and stakeholders, we strive to manage expectations and provide real-time information that enables our customers to make informed decisions,” Ricaurte Vásquez Morales, administrator of the Panama Canal, said.

The Panama Canal Authority says the canal is continuing to have an open line of communication to keep customers informed about the booking slot availability.

Read more about this ongoing situation.

Week 1 – Originally released August 4

Insight: Transpacific - Rates Are Rising Thanks Partly to Higher Demand, But Also Ocean Line Tactics

The transpacific market is no longer as soft as Charmin toilet paper like it had been since the start of 2023. Rather, it has observed some hardening in the past few weeks.

Shipping lines, who have implemented general rate increases (GRIs) since the spring, have finally seen some success in keeping ocean freight costs elevated above or at pre-pandemic levels. After several months of failing to prop up rates, a modest boost in organic demand has played well into the shipping lines’ hands.

GRIs are sticking, container rates are climbing

Major shipping lines started July off with GRIs, varying in the ballpark of $300 to $400. At the time, it wasn’t particularly concerning news, as any carrier increases in the months leading yielded no significant padding to rates, however this early July wave did not crash and recede. It stuck around.

By the time the second half of the month rolled by, even more GRIs were ushered in, again at a $300 to $400 clip.

While logistics pros bumbled back into the office from extended Independence Day vacations, the transpacific underwent a modest metamorphosis—rates jolted nearly a $1000 within four weeks.

According to the Freightos Baltic Index, China to U.S. West Coast rates rose 28 percent from June 30 to July 24.

GRIs sticking like white on rice isn’t random, but a typical sign that import volumes are picking up. This organic rise in demand signals a lift in the market enabling ocean lines to execute routine tactics, such as rate increases, more successfully.

Liners’ tighten capacity amid rising demand

In the capacity department, the transpacific has treaded in strange waters as of late. Ironically, higher demand has not yet led ocean liners to loosen available capacity. Rather, they’ve been focused on tightening transpacific services instead.

Some stakeholders attribute these mild capacity constraints as an effort from liners to limit space and force shippers to book earlier under high GRI-infused rates.

In other words, GRIs and blank sailings are a tandem ocean liners are deploying to regain some control—the likes of which has been absent earlier in the year.

However, it’s not as straightforward as just pure carrier strategy. There are other factors, outside of their control, in play.

Sailings to the U.S. East Coast have taken a capacity crunch thanks to ongoing draft restrictions on the Panama Canal, the critical waterway that connects Asia-USEC routings.

The apocalypse is not returning

If this reassuring phrase – at least, it’s not 2021 or 2022 –hasn’t been adopted by operations teams yet, it’s time for them to get on it.

Even though ocean freight costs are climbing and leading into what could be or not be a traditional peak season, logistics pros ought to quell any harsh anxieties these sudden market changes may have triggered.

At least, it’s not 2021 or 2022. No matter what plaque forms from aggressive GRI implementation, the following months won’t be apocalyptic like the years prior.

Containers won’t cost the MSRP of a Toyota Corolla and securing space won’t be like Jack giving up a spot on the lifeboat for Rose (there was room for both, darn it!).

If anything, sustained rate increases are a love tap to the industry that the market is gradually arising from its dormant hangover after a wild ride in 2021 and 2022.

Insight: A Hot Summer and its Impacts on the Supply Chain

Not only has Canada been dealing with labor talks out on the West Canada ports, but the country has also been dealing with a summer that keeps throwing obstacle after obstacle at them.

First, the wildfires, which made national news (remember those dystopic looking images from the smoke that made its way to New York). Canadian National Railway has taken the bull by its horns to adapt their operations during these wildfires.

Specifically, the railway has sprinkler systems that are attached to wooden structures in high-risk areas to support against the wildfires – which have burned much more this year than in a typical season, per the Journal of Commerce. The railroad has also deployed firefighting trains to help battle the wildfires out in Alberta.

Flooding has also been an issue in Canada this summer, specifically in the Nova Scotia province.

Canada is not the only region that has seen serious weather events.

Back in June, the Rhine River in Germany became too shallow (due to the dry weather) for vessels to sail fully loaded. This caused ship operators to impose surcharges on freight rates in order to compensate for the vessels being partially empty.

Now, the Rhine’s levels are finally back to normal after they received much needed rain. The rise in water levels has now allowed cargo vessels to sail fully loaded, Reuters reports. 

LIVE Content: Have you checked out our webinar?

This month, Interlog’s experts were joined by Gaston Ansaloni with Argentinian partner ITALOG SRL. Topics included: U.S. import forecast, Argentina’s trade regulations, and recent election results in the South American country.

What did you think?

In addition, please email us at with any news or topics you’d like our experts to cover in future issues!