July 2024 Freight Market Report

July 2024 Freight Market Report

The current freight market in July 2024 is shaped by multiple macroeconomic factors, including global tensions, potential union strikes, and seasonal demand.

These factors are creating a volatile market that business owners must understand to avoid supply chain delays and rate increases.

Big Rail Freight News: Teamsters Canada Rail Conference Vote to Reauthorize Strike

A worrying development that may soon impact rail freight is the threat of a strike by over 9,300 union members at the Canadian National (CN) and Canadian Pacific Kansas City (CPKC) railways.

The Teamsters Canada Rail Conference (TCRC) has reauthorized strike action due to unresolved negotiations over working conditions that began in May 2024, when an initial vote favored striking.

Each authorization expires after 60 days (the previous one ran from May 1st - July 1st), so the reauthorization was a necessary strategic move.

As of now, no action can be taken while the Canada Industrial Relations Board reviews the situation.

However, if initiated, a strike of this magnitude could paralyze key Canadian ports such as Vancouver, Prince Rupert, Montreal, and Halifax, leading to extensive delays and port congestion.

Importers fearing potential disruptions are proactively rerouting shipments through alternative ports or switching to air freight solutions despite higher costs.

Two Factors Are Leading to Increased Ocean Freight Rates

The rise of ocean freight rates has been making headlines for the past few months, and there are no signs of prices slowing down.

With the ongoing crisis in the Red Sea causing rerouted shipping lanes, ships must now navigate longer paths or seek entirely alternative routes, congesting major shipping channels. This rerouting significantly extends transit times and inflates fuel consumption and operational complexities.

July also signals the beginning of the peak season for ocean freight import rates from China, as businesses stock up for the coming months. Peak season will mean an even higher premium on ocean freight rates as carriers impose Peak Season Surcharges (PSS).

What Businesses Need to Know

These factors will have a major impact on delivery timelines and rates in the coming months and must be navigated tactfully. Without proper planning and preparation, a strike and increased freight costs can completely bottleneck your supply chain.

Anticipating potentially risky scenarios can help you avoid the worst possible outcome. So stay informed and work with a professional freight forwarder to secure your cargo’s booking.