Freight market update - 06 March 2024

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• Alan Murphy, CEO at Sea-Intelligence, notes that the need to move empty containers has grown 2½ times faster than the need to move full containers, affecting back-haul trades significantly.

• According to John McCown from Blue Alpha Capital, key American ports show a 54% increase in cargo imbalances from 2018 to 2023 compared to the preceding decade.

• Volume development in various markets is noted to be fluctuating, with certain commodities being deemed "mandatory" to be transported via air.

• Major container lines dominate the intra-European shortsea market, holding a commanding 71% share, while regional carriers and feeder operators have a modest 29% share, as per Alphaliner's recent analysis.

• The Ocean Alliance, consisting of major container carriers like CMA CGM, Cosco Shipping, Evergreen, and OOCL, has extended its partnership for an additional five years.

• Hapag-Lloyd will enter a new collaboration named Gemini Cooperation with Maersk, scheduled to commence in February 2025.

• Berth congestion in key Chinese ports like CNNGB, CNSHA, and CNTAO has stabilized, with minor waiting/delay of approximately 0.5 days.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Berth congestion in key Chinese ports like CNNGB, CNSHA, and CNTAO has stabilized, with minor waiting/delay of approximately 0.5 days.
• The stability is attributed to effective management strategies, including blank sailings and reduced vessel calls.
• Japanese port JPYOK has announced a temporary restriction on vessel alongside activities in D4 terminal on March 3rd from 0700 to 1300, due to the removal of an old crane in YOK D1 terminal.
• This restriction impacts vessel operations in the specified terminal during the designated period.
• Singapore's SGSIN continues to face significant berth congestion, with waiting/delay persisting around 1-1.5 days.
• High yard utilization is identified as a contributing factor, affecting overall productivity in the port.
• Despite efforts to manage congestion, challenges in optimizing terminal operations persist in Singapore.
• Rates are experiencing a decline in the first half of March, particularly in the UK market, as compared to North Continent Ports. This trend is attributed to low demand post-Q4, extending into Q1 2024.
• Negotiations for long-term deals are being considered after the Chinese New Year, with carriers reassessing demand patterns. While some carriers are open to such deals, the majority are waiting for additional clarity on the market situation.
• February's shipping capacity is fully booked, and the availability for March varies among carriers.
• Blank sailings are prevalent this week and the next due to factory closures related to the Chinese New Year, contributing to fluctuations in shipping schedules.
• In early May, Ocean Network Express (ONE) is set to initiate a new shipping route named Vietnam-China-Taiwan-USA AP1 loop in collaboration with Wan Hai Lines.
• This 8-week loop will include stops at Cai Mep, Shekou, Xiamen, Taipei, Ningbo, Shanghai, Los Angeles, Oakland, and then return to Vietnam.
• The vessels operating on this route will have a capacity ranging from approximately 5,500 to 14,000 TEU (Twenty-foot Equivalent Units).
• The agreement involves a minimum 12-month contract for the operation of this new shipping loop, reflecting a commitment to the route for at least that duration.
• Premier Li Qiang's announcement of an ambitious economic growth target signals China's intention to boost investment in logistics infrastructure.
• Dalian, in response, plans to invest over $33 billion in its north-eastern transport network, emphasizing the expansion of port infrastructure and the construction of new rail bridges.
• The ministry of transport outlines 187 projects, with Dalian aiming for a 12% year-on-year increase in container volumes, actively opening ocean routes in the Americas, Middle East, India, and Pakistan, and introducing five new container routes.
• Dalian also aims to enhance sea-rail intermodal transport volumes by 3% and improve the port collection and capacity of the North Grain South transportation channel.
• This significant investment reflects a broader effort in China to strengthen supply chain connectivity, with Shanghai's regional government focusing on increasing flows in the Yangtze River Delta, including the construction of the Xiao Yangshan container terminal at an estimated cost of $7.3 billion.

Turkey → North America

• Major container lines dominate the intra-European shortsea market, holding a commanding 71% share, while regional carriers and feeder operators have a modest 29% share, as per Alphaliner's recent analysis.
• Key ocean carriers are strategically investing and expanding their global footprints, entering niche European markets, and operating more of their feeders and shuttle services.
• MSC leads in capacity with 339,978 TEU, followed by CMA CGM with 181,177 TEU, and Maersk in third place, growing its intra-European capacity to 133,622 TEU.
• Arkas Line, a Turkish carrier, has surpassed Unifeeder to become Europe's largest independent shortsea operator, securing the fifth spot among intra-European operators with Arkas Group and its feeder branch EMES narrowly surpassing DP World-owned operator.
• The Ocean Alliance, consisting of major container carriers like CMA CGM, Cosco Shipping, Evergreen, and OOCL, has extended its partnership for an additional five years.
• Initially established in 2017 with a 10-year agreement, the alliance's vessel-sharing pact will now continue until March 2032.
• This extension stands in contrast to changes in other global liner partnerships, such as the upcoming conclusion of the 2M alliance between Maersk and MSC next year, and Hapag-Lloyd's departure from THE Alliance.
• Hapag-Lloyd will enter a new collaboration named Gemini Cooperation with Maersk, scheduled to commence in February 2025.
• Dedicated operational teams from both companies will manage the cooperation, allowing for flexible adjustments in operations outside the network to meet customer capacity requirements.
• Aiming for a schedule reliability of above 90%, the agreement is supported by a robust governance model and contractual obligations.
• Leveraging their combined global networks and terminal presence, as well as logistics expertise, the cooperation involves around 290 vessels with a combined capacity of 3.4 million containers (TEU), with Maersk deploying 60% and Hapag-Lloyd 40%.
• Encompassing 7 trades, including Asia/US West Coast, Asia/US East Coast, Asia/Middle East, and others, Gemini Cooperation will consist of 26 mainline services complemented by a global network of dedicated shuttles centered around transshipment hubs.
• The shuttle services, totaling 32, will offer fast connections with flexible capacity between hubs and ports served, enhancing efficiency in cargo transportation.
• The Panama Canal Authority has unveiled plans to allocate more than $8.5 billion in capital investments for sustainability projects over the next 5 years.
• This commitment to combat climate change follows persistent low water levels, hovering around 13.4 meters, with uncertain prospects for a return to normal levels.
• The proposed investment exceeds the $5.4 billion spent on the Panama Canal expansion, marking it as the most significant improvement project in the Canal's history.
• Presently, only 5 containerships are allowed to transit per day since the beginning of 2024, leading to delays of up to 3 days. In regular conditions, the canal would facilitate the passage of up to 32 vessels per day.

North America → Turkey

• The recent analysis by Sea-Intelligence emphasizes the surge in empty container repositioning, highlighting growing trade imbalances.
• The report points out that the demand for relocating empty containers has exceeded the growth in filled container volumes.
• Alan Murphy, CEO at Sea-Intelligence, notes that the need to move empty containers has grown 2½ times faster than the need to move full containers, affecting back-haul trades significantly.
• Head-haul shippers are burdened with increasing costs for moving empty containers, leading to a rise in overall expenses related to head-haul containers.
• According to John McCown from Blue Alpha Capital, key American ports show a 54% increase in cargo imbalances from 2018 to 2023 compared to the preceding decade.
• McCown identifies the inefficiency in the container system, attributing it to the imbalance between revenue-generating outbound loads and inbound loads, causing financial strain on multiple parties.
• Diverging narratives in news headlines regarding post-Lunar New Year market developments are evident within the air cargo sector.
• Shipco believes that the air cargo market will see improvements throughout the year, with a gradual increase in global volumes anticipated.
• The Red Sea crisis is considered as a potential factor contributing to higher-than-usual air freight volumes, as container vessels continue to divert around the Cape of Good Hope, leading to extended transit times.
• Shippers may opt for airfreight over sea freight, or a combination of both, given the current market dynamics, and Shipco is well-positioned to provide reliable solutions to ensure continuous cargo movement.
• Volume development in various markets is noted to be fluctuating, with certain commodities being deemed "mandatory" to be transported via air.
• The Bab Al-Mandab Strait situation remains unsettled as Houthi forces persist in attacks, prompting the EU's deployment of 4 frigates on February 20th under the Aspides Mission to protect ships in the Suez Canal region.
• Carriers are opting to reroute through the Cape of Good Hope due to the ongoing unrest, leading to increased transit times and a subsequent impact on TEU*Miles.
• Sea-Intelligence notes that diversions around the Cape of Good Hope may cause a 16% rise in TEU*Miles in 2024.
• In 2023, the global TEUMiles stood at 860 billion, and moving an equivalent cargo volume in 2024 would result in a demand of 994 billion TEUMiles, highlighting the potential increase due to the situation in the Bab Al-Mandab Strait.

Terminal Updates

• Vessels heading to North America via the North Atlantic Sea are expected to have a change in schedule due to severe weather conditions.

New York:

• No waiting time is expected for a berth at Maher Terminals LLC and APM Terminals.
• Up to 3 days waiting time is expected at Port Liberty Terminal Bayonne.
• Average gate turn times: 48 minutes for single transactions, and 74 minutes for double transactions.
• Terminal change to Port Liberty New York.
• MV La Traviata V019 E/W and MV Dalila V026 E/W are expected to arrive in New York on February 1, 2024, and February 17, 2024, respectively.
• All other vessels on AL6 will continue to call Maher terminals.

Norfolk:

• Currently, most vessels berth on arrival, however, the bigger vessels wait approx. 2 days for a berth.
• Average gate turn times are 37 / 54 minutes for single and double transactions respectively.
• Berth congestion had relaxed overall but it is expected to worsen after severe weather delays.
• This is mainly for ships arriving from New York later this week.

Charleston Terminal:

• Waiting time for vessel berthing is 1 day at Wando Welch Terminal and 0.5 days at North Charleston Terminal.
• Average truck turn times: 19  minutes at Wando Welch Terminal, and 20 minutes at North Charleston Terminal.
• Dock construction at Wando Welch terminal is starting in March 2024.
• It is reduced from 3 to 2 berths for one year.
• Berths will be given on a first come, first serve basis.
• Sunday gates are by appointment only.

Savannah:

• Waiting time for vessel berth at the terminal is up to 2 days, depending on the size of the vessel.
• Average gate turn times are 38 / 56 minutes for single and double transactions respectively.
• Import dwell time is 2.3 days.
• Berth 2 is back online helping to reduce waiting times.

Houston:

• Barbours Cut Terminal has up to 3 days waiting time for vessel berthing.
• 2 days waiting time at Bayport Container Terminal.
• Bad weather in the Gulf of Mexico continues to cause closures at ports south of Houston and delays on arrival.
• Due to vessel bunching the yard is facing congestion impacting the discharge productivity and extending port stays.
• Average gate turn time at Barbours Cut Container Terminal is 37 minutes and Bayport Container Terminal is 49 minutes.
• Loaded import dwell is at 3.6 days.

Oakland:

• Average wait time of up to 9 days at Oakland Int’l Container Terminal (OICT) and 3 days at TraPac.
• Average import deliveries can take up to 5.8 days at TraPac and 4 days at OICT.
• Average gate turn times are 66 / 71 minutes for OICT and TraPac respectively.
• OICT - Berth 55 is operational.
• Hoot shifts are being worked to help alleviate the backlog of vessels waiting for berthing.

Seattle-Tacoma:

• Wait time of up to 4 days at Husky and 4 days at WUT at Tacoma.
• 2 days waiting time in Seattle.
• Import deliveries are 1.5 days at Husky – due to EB/WB railcar imbalance, 1 day at Washington United Terminal, and 1-3 days at T18.
• The average gate turn times are 34 minutes for T18, 33 minutes for Washington United Terminal, and 55 minutes for HUSKY.
• Terminal 18 and Husky terminals will be closed on March 8, 2024.

Los Angeles/Long Beach:

• All terminal gates are running as published and in line with the Pier Pass program.
• Port of Los Angeles dwell time for local import cargo is 3.2 days, on-dock rail dwell is 4.8 days, and import units on the street are averaging at 4.4 /5.5 days for 20 ft and 40+ ft containers respectively.
• Port of Long Beach dwell times for local imports are stable, and the average terminal gate turn time is between 24 / 84 minutes, depending on the terminal.

Chassis Pools

All pools operating as normal except for:

• Cleveland – Constrained on 40’ Chassis.

Intermodal Operations

Truck power can be secured within 1-3 days for the majority of locations, including marine terminals, rail ramps, and depots.

Port Status

Final Thoughts

In light of the latest updates and trends, it is evident that the market is currently in the course of demonstrating robust performance and is equipped with ample capacity and resources.

Individuals and businesses involved in import/export activities must stay well-informed about market dynamics and strategies to make informed decisions. To ensure a smooth and hassle-free experience with your import/export operations, it is recommended to seek guidance from industry experts.

Conduct thorough research on ports that offer available space and suitable equipment despite the ongoing conditions. By doing so, you can minimize complications, facilitate shipments, and maximize efficiency.

Taking proactive measures and staying proactive in your approach will help you navigate the market effectively. We greatly appreciate your continued readership and encourage you to subscribe to our weekly market updates to stay abreast of the latest developments and insights.