Freight Market Update - 09 August 2023

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• ILWU Canada and BCMEA have reached a labor agreement, ending uncertainty.
• Vancouver's yard utilization rate is currently at 95%, with expectations of further growth, and dwell time is at 7 days.
• Typhoon Kanu has caused port delays in eastern China.
• A Reuters poll of 28 economists forecasts a 12.5% year-on-year drop in outbound shipments, following a 12.4% contraction in June.
• Ongoing aircraft compliance checks (C-Checks) have led to flight rescheduling and cancellations, but rates have only slightly risen due to low cargo volume.
• US imports from China were down by 24% in the first 5 months of 2023.

Read on for more in-depth updates.

Asia → North America
US/CA
 

Transpacific Trends and Market Updates
 

• ILWU Canada and BCMEA have reached a labor agreement, ending uncertainty.
• After causing havoc on the US west coast, labor negotiations disrupted operations on the Canadian west coast.
• The International Longshore and Warehouse Union Canada (ILWU) and the British Columbia Maritime Employers Association (BCMEA) reached an agreement.
• The agreement was ratified last Friday, putting an end to the disagreement between the union and employers.
• The conflict lasted over a month, disrupting billions of dollars worth of trade due to strikes.
• More than 30 ports, including Vancouver and Prince Rupert, were affected, handling 20% of the country's cargo flows.
• The new labor agreement has stopped the potential for more strike-related disruption, but congestion on the Canadian west coast will take time to ease.
• Vancouver's yard utilization rate is currently at 95%, with expectations of further growth, and dwell time is at 7 days.
• Given the current economic climate, it's wise to monitor ongoing and future labor negotiations and have mitigation strategies ready for any potential disruptions.
• Typhoon Kanu has caused port delays in eastern China.
• Currently, the average berth time at Ningbo is 1.5 to 3 days.
• Starting from August 3rd, empty container pick-up and drop-off have been halted, while operations for laden containers continue normally.
• Delays are expected for shipments from Ningbo as operations are scaled down.
• China's export figures for July are expected to show another month of contraction.
• A Reuters poll of 28 economists forecasts a 12.5% year-on-year drop in outbound shipments, following a 12.4% contraction in June.
• This aligns with the fourth consecutive month of declining activity levels for Chinese factories.
• Air shipments from Central China to the USA and Europe have seen a slight rate increase for SHA to Europe and the US.
• Ongoing aircraft compliance checks (C-Checks) have led to flight rescheduling and cancellations, but rates have only slightly risen due to low cargo volume.
• Rates from NGB to Europe and the US have remained stable.
• The final shipping rate is determined on a case-by-case basis.
• Senior forwarding executives had initially predicted a minimal or non-existent peak season for 2023.
• Recent developments in water-based transportation are challenging this prediction.
• The traditional peak holiday season involves high merchandise movement from Asia to North America and Europe between July and October.
• However, market conditions have changed since spring, with capacity withdrawals and the potential for volume recovery due to inventory restocking leading to increased volumes.
• This contrast highlights a discrepancy between the predicted lack of a peak season and the current state of the freight market.
• Vessel utilizations on the trans-Pacific route have notably increased in recent weeks.
• This increase is attributed to diverted booking volumes and more blank sailings, as reported in an August 1 market update by M+R Spedag Group.
• U.S. FMC faces carrier opposition over proposed rule addressing vessel space denial.
• Proposed revisions raise concerns of price regulation, with carriers fearing disclosure of trade secrets.
• Customer groups support stricter rules, while FMC strives to balance carrier and customer interests.

Rates - The rates will remain soft on most origin-destination combinations.

Space - Space open, no issues with equipment.

Recommendations - We recommend blank sailings to continue. Book at least two weeks before the date your vessel gets ready to depart.

• ICAO and WCO have collaborated to update guidelines on air cargo security.
• New TSA regulations requiring 100% cargo screening will be effective from November 1st.
• Challenges include integrating modern technologies for secure cargo movement and screening, with temporary exemptions granted till October end for compliance.
• ICAO Secretary General Juan Carlos Salazar emphasizes increased security threats and the importance of digitizing cargo processes.
• A harmonized data model has been established to enhance customs requirements and provide visibility to shipments via an electronic platform.

Rates - The rates will remain soft on most origin-destination combinations.

Space for capacity - No capacity issues or issues with space.

Space for equipment - No issues with equipment.

• US imports from China dropped by 24% in the first five months of 2023 compared to the same period in 2022.
• This decline is linked to a worldwide trade slowdown amid economic challenges and political tensions between the US and China.
• Reshoring has gained momentum among US importers, and Mexico has replaced China as the US's top trading partner.
• While discussions about Western nations diversifying sourcing away from China have grown, countries like Germany and France have maintained relatively stable import levels.

Rates - Stable rates over the last week.

Space for capacity - No major capacity or space issue.

Space for equipment - Equipment issues have started owing to low levels of import.

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 Global Container Terminals Bayonne and APM Terminals.
• No more waiting time at Maher Terminals LLC.
• No empty shut-out situations at any of the terminals this week.
• Average gate turn times: 51 minutes for single transactions, and 83 minutes for double transactions.

Norfolk:

• Berth for large vessels is congested due to previous multi-day periods of severe weather.
• Vessels are waiting for 2 days for a berth.
• Average gate turn times are 22 / 17 minutes for single and double transactions respectively.
• All cranes are up and running again.

Charleston Terminal:

• 1 day waiting time for vessel berthing at Wando Welch Terminal.
• No waiting time expected at North Charleston Terminal.
• Average truck turn times: 22 minutes at Wando Welch Terminal, and 17 minutes at North Charleston Terminal.

Savannah:

• Waiting time for vessel berth at the terminal is up to 4 days, depending on the size of the vessel.
• Average gate turn times are 38 / 54 minutes for single and double transactions respectively.
• Starting Sunday, July 9, 2023 GPA no longer offers a Sunday gate.
• Monday-Saturday gate hours remain the same.

Houston:

• Barbours Cut Terminal has up to 1 day waiting time for vessel berthing.
• The average gate turn time is 43 minutes.

Oakland:

• Average wait time of up to 4 days at Oakland Int’l Container Terminal (OICT) and up to 3 days at TraPac.
• Average import deliveries can take up to 5.2 days at TraPac and OICT.
• Average gate turn times are 62 / 54 minutes for OICT and TraPac respectively.
• Berth 25 at TRAPAC: All 3 cranes are not working.
• It is currently not known when they will be operational.

Seattle-Tacoma:

• Wait time of up to 5 days at Tacoma.
• Import deliveries are 2.3 days at HUSKY – due to EB/WB railcar imbalance, 0-3 days at Washington United Terminal, and 0-3 days at T18.
• Availability of rail cars in Union Pacific Rail and BNSF Rail continues to fluctuate weekly.
• Average gate turn times are 48 / 31 / 51 minutes for T18, Washington United Terminal, and HUSKY respectively.
• T18 will be closed on August 4 and 11, 2023.
• Washington United Terminals will be closed on August 18, 2023.
• Starting June, SSA Terminals T18 (Seattle), will offer a fee-based weekend gate.
• WUT has received 2 new Post Panamax Cranes.
• WUT will commence commissioning both at same time in the next 2 weeks, operational by end of August.

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 3.5 days, on-dock rail dwell is 3.0 days, and import units on the street are averaging at 4.8 /6.6 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 21-66 minutes, depending on the terminal.

Chassis Pools:

All pools are operating as normal except:
Columbus - Deficit 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.

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.