Freight market update - 10 April 2024

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• Container carriers are reducing the number of blank sailings on Trans-Pacific routes compared to the past two years.

• In March, carriers blanked 11.7% of total vessel capacity from Asia to the U.S. East and West Coasts, a decline from 21.5% in 2022 and 29% in 2021.

• February saw carriers blanking 19.4% of capacity, down from 41.5% in 2023 and 29.6% in 2022.

• China remains at the top of the ranking for the best port connectivity, according to a report from Sea-Intelligence.

• Alliances such as Gemini Cooperation, THE Alliance, and Ocean Alliance have excluded Hong Kong from many routes for 2024 and 2025.

• Maersk, a global leader in integrated container logistics, reached a significant milestone with the maiden green methanol bunkering of the large vessel Astrid Maersk at Yangshan port in Shanghai.

• The North America logistics market is poised for significant growth, driven by the rising demand for e-commerce.

• In 2023, the market size reached US$ 1.44 trillion, and it is projected to grow to US$ 1.75 trillion by 2032.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Container carriers are reducing the number of blank sailings on Trans-Pacific routes compared to the past two years.
• In March, carriers blanked 11.7% of total vessel capacity from Asia to the U.S. East and West Coasts, a decline from 21.5% in 2022 and 29% in 2021.
• February saw carriers blanking 19.4% of capacity, down from 41.5% in 2023 and 29.6% in 2022.
• While fewer blank sailings are expected in April and May, experts warn against relying heavily on projections beyond four to five weeks due to the instability surrounding the Red Sea crisis.
• Carriers are providing shorter notice for canceled sailings amidst this uncertainty.
• The Port of Hong Kong, once the world's largest container port, is experiencing a significant decline in throughput due to hub consolidation among major global shipping alliances.
• Alliances such as Gemini Cooperation, THE Alliance, and Ocean Alliance have excluded Hong Kong from many routes for 2024 and 2025.
• Notably, the new Gemini alliance formed by Maersk and Hapag-Lloyd does not have a direct service to Hong Kong.
• This shift reflects a trend towards fewer but larger transshipment hubs aimed at enhancing economic efficiency, as noted by Sea-Intelligence, a Danish consultancy.
• Sea-Intelligence warns that more ports could face a similar fate as the industry consolidates.
• Container throughput in Hong Kong decreased by 14% in 2022 to 14.3 million TEUs, marking the most significant decline among major ports globally.
• As a result, the Port of Hong Kong has slipped to 10th place in the global container port rankings.
• In February, air cargo volumes experienced an 11.9% increase compared to the previous year, as reported by IATA.
• This marks the third consecutive month of double-digit year-on-year demand growth in the air cargo sector.
• The growth was driven by improved global economic performance.
• The return of belly capacity contributed to a 13.4% year-over-year increase in February.
• Despite the growth, the average load factor declined by -0.6 percentage points to 45.1%.
• Willie Walsh, the Director General of IATA, credited air cargo's resilience amidst ongoing political and economic uncertainties for this strong start in 2024.
• He highlighted the surging e-commerce industry as the primary driver of demand for air cargo transportation, along with a recent increase in the utilization of sea-air logistics services to a lesser extent.
• Export performance outlooks varied regionally, with the U.S. and China expecting growth, while Europe and Japan anticipate a contraction.
• Rolf Habben Jansen, CEO of Hapag Lloyd, predicts an early peak season driven by low stock levels and importers advancing purchase orders due to extended transit times along the Asia route, despite overall low demand.
• Rate declines on the Asia-Europe route have ceased, with carriers attempting to implement General Rate Increases (GRI) for April rates, although new ship deliveries are increasing capacity for the month. Carriers are also announcing more blank sailings to balance demand and supply.
• In the Transpacific trade, rates are gradually decreasing, leading carriers to reinstate services, especially on the Asia/North America East Coast (NAEC) trade route.
• Port congestion is on the rise in Asia, primarily due to berthing delays in Ningbo, Shanghai, Singapore, Port Klang, and Busan.
• China's largest delivery company, S.F. Express, is aiming to go public through a merger with a listed rare-earths producer, shedding light on Beijing's approach to backdoor listings, which has become increasingly controversial.
• Maanshan Dingtai Rare Earth & New Materials Co., a relatively unknown entity, disclosed in a filing to the Shenzhen Stock Exchange on Monday its intention to merge with S.F. Express. The merger involves complex transactions including asset swaps and new share issuance. The resulting combined company is expected to be valued at $6.61 billion, according to the filing.
• If finalized, this deal would represent another instance of private Chinese firms, including some prominent ones, opting for backdoor listings instead of traditional initial public offerings. Backdoor listings allow companies to circumvent China's challenging IPO process, characterized by government controls on the number and pricing of public listings, resulting in years-long waits and a backlog of nearly 800 companies.
• Interest in shell companies and struggling firms perceived as potential vehicles for backdoor listings has surged, particularly after Beijing announced a delay in its long-anticipated overhaul of IPO regulations in March.
• This delay led to a significant increase in the share prices of such companies.
• Maersk, a global leader in integrated container logistics, reached a significant milestone with the maiden green methanol bunkering of the large vessel Astrid Maersk at Yangshan port in Shanghai.
• This historic event marked the first simultaneous cargo and bunkering operations involving green methanol in China and was accomplished through a partnership with the Shanghai International Port Group (SIPG), as stated in an official release from Maersk.
• The occasion holds particular significance as Maersk commemorates its 100th anniversary of serving China's foreign trade. It highlights the company's commitment to decarbonizing the maritime industry and acknowledges its longstanding collaboration with partners and stakeholders involved in Chinese international trade.

Turkey → North America

• The Maersk-operated containership, DALI, recently collided with the Francis Scott Key Bridge in Baltimore.
• As a result, the port is now closed indefinitely, with demolition work already in progress. The closure is due to the fact that the only route to the port was under the bridge.
• In 2023, Baltimore Port handled 4.5% of the total containers for main East Coast ports.
• However, the closure is not expected to have a significant impact as neighboring ports such as Norfolk and New York have sufficient handling capacity.
• Cargo is currently being diverted to these ports as an alternative.
• According to the Global Liner Performance Report by Sea-Intelligence, on-time performance from Asia to the U.S. West Coast dropped to 44.2% in February from 48.5% in January.
• Asia-U.S. East Coast on-time performance also declined to 33.4% from 33.9%. Globally, schedule reliability improved to 53.3% from 51.6%.
• Carriers are planning to deploy 2.69 million TEUs of capacity in the Asia-U.S. trades in May, up from 2.58 million TEUs at the same time last year.
• U.S. imports from Asia increased by 18.1% year-over-year in January and 39.7% in February.
• The National Retail Federation has raised its import projections through July, while S&P Global forecasts a 2.4% GDP growth in 2024, up from 1.7% earlier.
• China remains at the top of the ranking for the best port connectivity, according to a report from Sea-Intelligence.
• The report is based on data from the United Nations Conference on Trade and Development (UNCTAD).
• Despite global conflicts, China's connectivity improved by three percent.
• Russia also saw significant growth in connectivity, with a 39% increase despite facing sanctions.
• Following China, the next best-connected countries for maritime trade are South Korea, Singapore, the U.S., and Malaysia.
• The evaluation by the UNCTAD report considered factors such as the number of weekly ship calls, total shipping capacity, the number of trading shipping firms, and direct connections to other countries.

North America → Turkey

• The North America logistics market is poised for significant growth, driven by the rising demand for e-commerce.
• In 2023, the market size reached US$ 1.44 trillion, and it is projected to grow to US$ 1.75 trillion by 2032.
• This growth represents a compound annual growth rate (CAGR) of 2.2% during the period of 2023-2032.
• Key factors fueling this growth include the expansion of international trade, the booming e-commerce sector, advancements in logistics technology, and evolving consumer preferences for faster delivery services.
• The demand for logistics services is experiencing significant growth, driven by the expansion of the e-commerce sector and the increasing volume of international trade.
• Cross-border trade is also on the rise, further escalating the demand for logistics services as businesses seek efficient networks to transport goods across borders securely.
• The expansion of the e-commerce sector is a major contributor to this growth, with more consumers opting for online shopping, leading to increased reliance on logistics for order fulfillment and product delivery.
• E-commerce companies heavily depend on logistics services to meet customer demands, driving further growth in the market.
• The rapid growth of online retail has also spurred the need for robust last-mile delivery solutions, warehousing facilities, and efficient order fulfillment capabilities to support the growing demand.
• Fulfillment provider Stord has recently acquired ProPack Logistics in a move aimed at enhancing its temperature-controlled and last-mile shipping services for omnichannel brands.

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: 51 minutes for single transactions, and 81 minutes for double transactions.
• Terminal change to Port Liberty New York.
• An earthquake hit New York City, New Jersey with 4.8 Magnitude on April 5, 20204.
• However, no issues were reported at Maher, Port Liberty, APMT NYC or Greenwich terminal in Philadelphia.
• 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 29 / 42 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: 18  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.
• This project will also limit the amount of class 1.1 and 1.2 that can be handled at the terminal during this time.
• 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.
• Frequent river closures are expected due to fog during this week.
• Average gate turn times are 36 / 53 minutes for single and double transactions respectively.
• Import dwell time is 2.1 days.
• Berth 2 is back online helping to reduce waiting times.

Houston:

• Barbours Cut Terminal has up to 1 day 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 36 minutes and Bayport Container Terminal is 58 minutes.
• Loaded import dwell is at 3.6 days.

Oakland:

• Average wait time of up to 4 days at Oakland Int’l Container Terminal (OICT) and 1 day at TraPac.
• Average import deliveries can take up to 5.2 days at TraPac and 5.4 days at OICT.
• Average gate turn times are 67 / 73 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:

• No waiting time at Husky and 4 days at WUT at Tacoma.
• 2 days waiting time in Seattle.
• Import deliveries are 2 days at Husky – due to EB/WB railcar imbalance, 3.7 days at Washington United Terminal, and 1-3 days at T18.
• The average gate turn times are 31 minutes for T18, 31 minutes for Washington United Terminal, and 109 minutes for HUSKY.
• Terminal 18 will be closed on April 12, 19, and 26, 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 2.7 days, on-dock rail dwell is 4.5 days, and import units on the street are averaging at 3.7 /5.2 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 22 / 68 minutes, depending on the terminal.

Chassis Pools

All pools are operating as normal.

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.