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AI shippers still looking for capacity risk sharp airfreight peak squeeze

AI infrastructure shippers, still seeking peak-season capacity, could push air freight rates sharply higher, as demand for servers, chips, and data centre equipment adds pressure to an already firm market. According to TAC Index, sources have reported that ecommerce customers and other major shippers with product launches had secured peak-capacity, while some AI hyperscalers had yet to book their space. The warning comes despite a Golden Week dip in TAC's global Baltic Air Freight Index, which fell 2.1% in the seven days to 12 October, leaving it 24.3% above a year earlier. China's holiday ended on 7 October. While overall rates from China to Europe and the US softened over the week, nearly all TAC's spot rates out of Hong Kong, Shanghai, and Korea rose, with increases particularly evident in recent days. New analysis of US imports underlines the scale of technology-related demand. Supply chain professor Jason Miller's seasonal adjustment of Census Bureau trade data showed August air freight imports by weight reaching another record, up 20% year on year, and 42% above the 2023 average. Computer parts, including GPUs, contributed an additional 12,932 tonnes, compared with August last year, while prepared unrecorded media, including memory, added 11,111 tonnes. Electrical power equipment and insulated wire and cables were also among the leading contributors. Mr Miller said these categories pointed to the "disproportionate role" of investment in the physical infrastructure supporting AI computing in generating freight demand. His findings concern US air imports, but forwarder Forto also identified a broad shift towards technology in its third-quarter market analysis. Semiconductors, AI hardware, servers, and data centre infrastructure were the principal growth drivers, it said, while ecommerce had declined in relative importance. And the changing demand picture is also influencing how forwarders secure capacity. Speaking at an industry event in Liège last month, DSV's global head of airfreight, Stefan Krikken, said forwarders needed to balance firm capacity commitments with more flexible airline bookings and their own flying programmes, taking account of hyperscaler demand and constraints at cargo gateways. Hyperscaler demand was among the factors shaping those decisions, alongside the ability of gateways to accommodate the cargo. Morrison Express has also identified growing hyperscaler production in South-east Asia, and exceptionally high Taiwanese volumes as factors prompting a reassessment of its gateways. However, stronger demand and higher rates may offer carriers less financial relief than the headline figures suggest. TAC reported that jet fuel prices rose a further 3.1% in the week to 9 October, citing IATA's Jet Fuel Price Monitor, taking the year-on-year increase to 111.2%. And in his latest JTD Advisory briefing, founder David Kerr warned that fuel costs were rising faster than freight rates, putting pressure on operating margins. He expects fuel surcharge resets in the second half of October, and identified four-engine freighters as the aircraft most likely to face pressure to reprice, or be parked. Published surcharges already illustrate the pressure on shipping costs. Cathay Cargo's Hong Kong-origin long-haul fuel surcharge rose almost 26%, from HK$11.20 to HK$14.10 (US$1.42-$1.79) per kg, for the first half of October. DHL Air UK's equivalent charge increased 4.1% week on week, to HK$12.80 per kg for 12-18 October, although it remained below its late-September level. Japan Airlines will raise its fuel surcharge on domestic exports bound for the Americas and Europe from ¥185 ($1.16) to ¥192 per kg on 16 October, an increase of 3.8%. Its medium-haul and short-haul Asian surcharges will rise by around 4%. The impact on individual operators will depend on their fuel exposure and ability to recover costs, but the combination adds another pricing risk for shippers seeking remaining peak-season space. For those AI customers still to secure capacity, the question is how much room remains, and what it will cost.

Low Rhine water level driving barge cargo to capacity-strained road and rail

Terminals at Antwerp and Rotterdam are coming under growing pressure as unseasonably low water along the Rhine continues to restrict container barge movements on the river, with cargo being pushed towards already-constrained rail and road networks. SeasC4U's Gunther Ginckels told The Loadstar barges around Duisburg-Ruhrort were operating at roughly two-thirds of normal capacity, while vessels further upstream were carrying substantially smaller loads. "Some services are suspended further upstream on the Kaub gauge, where low water has severely restricted navigation, while large volumes are being shifted to rail and truck, but alternative capacity is limited," said Mr Ginckels. "Cargo is still moving, but carrying capacity is sharply reduced, transport costs have risen, transit times are longer and less predictable, while inland terminals, rail networks, and trucking markets are absorbing displaced cargo at higher cost and delays." Some 35% of box movements along the Dutch hinterland tend to travel by inland waterway, meaning that even seeing a part of that traffic transferred to alternative modes piles massive pressure onto already constrained transport networks. Back in August, Metro Global stated that more than 200 trucks would be required to replace lost barge capacity, and while low water levels have become part and parcel of the Rhine's summer months in recent years, the persisting into October presented additional problems. One source told The Loadstar: "The low waters and the additional congestion this places on rail and road infrastructure in the summer is a strain, but the with schools out and people on holiday, it is manageable. The same cannot be said for October." The rail operators are reportedly experiencing the biggest difficulties, with sharp increases in demand in the Rhine-Main leaving at least one intermodal operator's train services fully booked for what Mr Ginckels said was "weeks". He warned that rail infrastructure was not sufficient to readily absorb all the displaced cargo, citing shortages of suitable train paths, wagons, locomotives, and drivers, and while noting that road transport offered greater flexibility, he said capacity there was also tight. "In some affected areas, road transport is becoming the only practical alternative, because rail is already full, and even with trucks being used extensively, there is reportedly insufficient capacity for 15% to 30% of affected cargo volumes," Mr Ginckels continued. "Finding replacement truck capacity can take up to two weeks, while securing rail capacity may require up to six weeks' advance notice. Even after water levels recover, logistics experts estimate it may take up to 10 days for vessel schedules to normalise." For terminal operators, a shift back to barges could provoke a new bout of congestion, as the arrival of delayed vessels in close succession could then create further blockages at both Rotterdam and Antwerp. A spokesperson for the port of Rotterdam told The Loadstar it was not currently seeing any disruption to its services and that the port remained fully operational with the flow of goods continuing as normal. "The effects are mainly visible further inland, where low water levels have a greater direct impact on the navigability of rivers and canals. That said, we see that the total volume of inland waterway transport remains reasonably stable compared with last year." Although sources said terminals had implemented a "one teu in, one teu out" policy for the barges and trains making their way to the terminals with containers, demanding they take away an equivalent number to those discharged. This condition of discharge is reportedly applicable for full and empty containers, but sources say the restriction is only complicating container flows and adding to barge waiting times - although neither Antwerp nor Rotterdam had yet to confirm the rule to The Loadstar. Mr Ginckels said the situation was now "one of the most serious Rhine navigation disruptions since the historic low-water events of 2018''. "The strongest effects are those being felt down in southern Germany, Switzerland, and the Upper Rhine corridor."

GFS ship sinks after missile attack, second ship sustains damage

Missiles struck two container ships in Global Feeder Shipping's (GFS) fleet in the Strait of Hormuz in the last 24 hours, with one vessel subsequently sinking after catching fire. Singapore's Maritime and Port Authority (MPA) said that the 2008-built 2,824 teu GFS Pride was damaged and caught fire before sinking. All of its 21 crewmen were evacuated, with no injuries reported. The other ship, 2015-built 4,350 teu GFS Giselle, sustained hull damage but remained operational and proceeded under its own power to a safe anchorage. All 22 crew members were safe, and no injuries were reported. Both ships are Singapore-flagged but had no Singaporeans among their crew. SeaSearcher's AIS data shows that GFS Pride was approximately one nautical mile east of Ras Makhbuq, Oman, when it was hit. Iran's Islamic Revolutionary Guard Corps Navy said an unnamed container ship carrying more than 2,500 containers had struck a mine while transiting what it described as an "unauthorised and dangerous" route through the strait. The sinking of GFS Pride is the second vessel loss since the US-Israel-Iran war began on 28 February, according to data from the International Maritime Organization, the United Nations' shipping agency. The earlier incident involved a bulk carrier, Cape Dao, which sank in the Gulf of Oman yesterday, after being hit by two torpedoes on 23 September. One Indian seafarer was killed and two others were injured. Both GFS Pride and GFS Giselle were originally owned by Dubai-based Simatech Shipping, before the latter's liner operations were acquired by GFS in October 2018. Abu Dhabi-based AD Ports owns 81% of GFS. GFS' website states that GFS Pride served a Khor Fakkan-Fujairah-Karachi service, and was supposed to have arrived in Khor Fakkan on Friday. GFS Giselle is deployed on a Fujairah-Khor Fakkan-India (Nhava Sheva) service and was due to have arrived in Khor Fakkan, also on Friday. MPA said it was in contact with the vessels' management company and was closely monitoring developments. The authority expressed concern over continued attacks on commercial shipping in the Strait of Hormuz, including the latest incidents involving the two Singapore-registered ships. It described the attacks as unprovoked and unjustifiable, saying they violated international law. MPA added that all actions affecting international shipping must comply with international law, particularly the United Nations Convention on the Law of the Sea, and must not jeopardise the safety of vessels or seafarers.