DSV Global Market update – December 2024

Dear Customers,
Please find attached a new monthly market update December 2024.
DSV Israel

LOCAL UPDATE

Airfreight
• Due to the security situation in the area, several international airlines have temporarily canceled flights to Israel, some of them should gradually return to operations.
• The situation creates a great burden on the Israeli airlines and the international companies operating to and from Israel. The load and the reduction of the capacity causes the extension of the transit time.

Ocean
• The red sea crisis is still influencing the traffic from the Fareast to Israel and the global market as well.
• Most of the shipping lines have decided, to stop all voyages through the Suez Canal for the time being, and to have their vessels operate via the Cape of Good Hope.
• Other options are shipping by ocean from the Fareast to Bahrain or Jebel Ali ports, trucking to Sheikh Hussain, clearing from customs at the cross border, trucking the shipments to final destinations in IL.
• The situation causes longer transit time, lack of capacity, and shipments switched from Ocean to Air to meet the lead time.

Land border crossings
• The Allenby cargo terminal is working partially operates according to the instructions of the Israeli customs.
• The other border crossings are working as usual, but there is a load due to the regulation of deliveries from Allenby to other crossings.

Political crisis with Turkey
• The political crisis with Turkey gives its signals in the supply chain especially in ocean/air traffic to Israel, direct sailings from Turkey are possible for Palestinian customers only and without the involvement of an Israeli forwarder.
• DSV Israel is working to find alternative solutions for its customers
Please contact our service and sales representatives for additional information and import solutions.

Global

General Update

Please find attached latest monthly market update. It has been over one year since the Red Sea disruptions started and we can confirm that this has really impacted the industry and the year, here is very limited hope that this will be resolved anytime soon.
We need to get ready for a Month of January future of potential events/disruptions:
• Jan 15th: End of current ILA-USMX agreement and potential date for a container port strike in the US East coast.
• Jan 20th Donald Trump inauguration day, as president of USA and potential announcement of new imposing 25% tariffs on Canada and Mexico and additional 10% tariffs on China
• Jan 29th : The Chinese New Year begins on 29 January, ushering in the ‘Year of the Snake’. This year is a bit earlier than other year, the official dates are from 28 January to 4 February and may extend unofficially for a few weeks..
• Feb 1st : Starting of the new shipping alliances, cooperations & services: MSC, Gemini Cooperation, Premium Alliance and THE alliance.

OCEAN
Market is partially rebounding we see rates from Asia to Europe increasing after general rate increases being implemented., SCFI during last month decreased -3,2 % driven by a normalization of North American destinations. stopping the downtrend from previous months. During the coming weeks we will expect some cargo surge before Chinese New Year (this year is earlier than last year). Port congestion rebounded sharply over the past week with both Chinese and North European ports experiencing severe delays.

AIR
We are officially in peak season, rates are volumes from Asia are growing, specially to Europe and North America. The congestion in Brazil's Guarulhos Airport is improving, but situation is still critical. Lack of freighter capacity in America and Europe has also pushed rates up.

Tenders
Workload is increasing, it is starting the negotiation for 2025 key ocean contracts while Airfreight is also being discussing for mid and long term.

General Update
• In Q3 2024, US retail e-commerce reached 16.2% of total retail sales; It was close to the all-time high reached in Q2 2020 during COVID
• E-Commerce: developing markets provide significant potential
• Trade Sector Eyes a New Wave of U.S.Tariffs Under Trump
• China Inflation Data Signals Continued Demand Weakness
• German economy to underperform euro zone until 2026, EU forecasts

Ocean freight highlights
• Global container port congestion increased at 2,71m TEU (8,7% of fleet)
• US East Coast potential port strike from January 15th – 2025
• Despite of +200K TEUs added of new vessels, active capacity remains at 25,73 M Teus
• Brazil port Congestion, Santos terminal has an average 5 days vessel waiting time
• Chinese New Year 2025 – A January full of potential disruptions:
• Carrier on time Performance at 51,5%
• COSCO retains transpacific volume lead
• ETS (Emissions Trading System) changes 2024 vs 2025; 40% allowances of carrier verified emissions 2025 – rise to 70% of carrier verified emissions
• US: November 2024 imports reflect a softer seasonal slowdown, but it is the second largest November month ever registered

Airfreight highlights
• YTD we are seeing a global demand growth of 11% to 13% (including e-commerce volumes), while capacity grew limited to 8%
• Key growing markets are Middle East (18%) due to Red Sea disruption, Asia Pacific (17%) due to e-commerce effect and while North America was growing +4%
• The recent increase in global freighter cargo capacity is reflected in the high utilization of large freighters
• International air cargo capacity has grown 10% over the last four weeks compared to 2019 levels
• European passenger airlines reduce capacity to China
• Freighter capacity into Mexico grew by ~5.5k tonnes through Anchorage in Q4 2024 compared to last year
• North American integrator capacity is down, primarily due to a decrease in domestic capacity
• Cargo operations at Brazil's Guarulhos Airport are slowly going back to normal
• Global tonnages (+4%) and rates (+12%) continue to show strong YoY improvements during December