Freight market update - 10 July 2024

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• Global trade in 2024 could potentially reach $32 trillion, based on the United Nations Conference on Trade and Development's (UNCTAD) July trade update.

• In Q1 2024, global goods trade increased by 1% and services trade by 1.5%, potentially adding $200 billion and $100 billion respectively to their sectors.

• U.S. imports from Asia have increased by 18.2% year-over-year through May 2024, according to PIERS data.

• Panama Canal daily transits are increasing to 35, up from 24 in May, as water levels return to normal.

• With rising water levels in Gatun Lake, carriers are now reinstating services through the Panama Canal that were previously suspended.

• Elevated spot rates have led to higher contract rates, with 74% of Xeneta's customers facing premium surcharges since the onset of the Red Sea crisis.

• The Port of Baltimore channel has been officially reopened by the US Coast Guard, allowing normalized transit conditions with a 50-foot draft.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Shippers concerned about securing capacity for the upcoming peak season are rushing to book space and equipment on the Trans-Pacific container market.
• Container spot rates from Asia to the U.S. West and East coasts have steadily risen since April.
• U.S. imports from Asia have increased by 18.2% year-over-year through May 2024, according to PIERS data.
• Importers are accelerating shipments due to concerns about ongoing labor contract talks at U.S. East and Gulf Coast ports.
• Negotiations were paused in June due to disputes over automation, heightening the risk of a port strike.
• More container capacity is expected soon, with at least ten Trans-Pacific services scheduled to launch.
• Forwarders with reduced contracted allocations are finding themselves without guaranteed slots despite agreements.
• Some ocean carriers have failed to fulfill contracted cargo due to ship delays in Asia or equipment shortages.
• Other instances involve carriers prioritizing higher-paying cargo over contracted freight with lower rates.
• Recent data from the US Census Bureau for April 2024 indicated stable sales and inventory levels, failing to foresee the sudden spike in container bookings in May, which has caused significant disruption.
• The market to the USA remains highly active, characterized by high demand and limited space availability.
• Rates have continued to rise across all segments, particularly FAK rates, which have seen sharp increases.
• While congestion has slightly improved, it remains a persistent issue at several ports.
• Space remains highly limited across global markets in July, particularly on the Transpacific route, despite carriers adding capacity.
• The global fleet has expanded to a historical high of 30 million TEUs, with an increase of 10 million TEUs over the past seven years.
• Port congestion persists, notably in Singapore and Colombo, impacting feeder vessel connections.
• Rail transport from China remains 40% more expensive than ocean freight but has seen a significant increase in volumes, primarily comprising high-value commodities and urgent shipments.
• Strong demand in June has led carriers to continue raising rates into July, with vessels fully booked for the next 2-3 weeks instead of the typical 3-4 weeks.
• The supply chain faces significant challenges due to space constraints across all trade routes from Asia, particularly on the Transpacific route.
• Congestion at key transshipment hubs like Singapore and Colombo continues to disrupt operations, causing delays in feeder vessel connections.
• Equipment resupply is improving but remains a concern for live bookings; some carriers note increased availability, which could help mitigate issues if demand decreases.

Turkey → North America

• Freight costs are escalating due to supply chain volatility, becoming a significant concern for shippers and forwarders, as highlighted by a Xeneta poll.
• Xeneta's mid-year update noted 2024's freight market volatility, with initial spikes in spot rates on Far East trades early in the year, followed by fluctuations and renewed increases in May.
• Despite challenges like the Red Sea crisis, the market has shown flexibility in adjusting rates.
• Elevated spot rates have led to higher contract rates, with 74% of Xeneta's customers facing premium surcharges since the onset of the Red Sea crisis.
• Maersk's CEO, Vincent Clerc, attributed higher freight rates to increased charter costs and longer cargo journeys during a recent online event, assuring customers that these rates are temporary and expected to normalize as challenges ease.
• Lars Jensen, CEO of Vespucci Maritime, highlighted over 200 days since vessel diversions began around South Africa, emphasizing uncertainty about when normal sailing routes will resume and suggesting it could take years.
• Panama Canal daily transits are increasing to 35, up from 24 in May, as water levels return to normal.
• The Panama Canal Authority (ACP) will allow nine neo-Panamax and nineteen super-Panamax ships to transit daily starting in August.
• This increase follows Panama's worst drought in 70 years, which began in mid-2023 and initially reduced transit capacity.
• Carriers rerouted Asia-North America East Coast sailings away from the canal due to concerns about prolonged reduced transits lasting into early 2024.
• The drought disrupted scheduling reliability and impacted spot rates significantly.
• With rising water levels in Gatun Lake, carriers are now reinstating services through the Panama Canal that were previously suspended.

North America → Turkey

• Global trade in 2024 could potentially reach $32 trillion, based on the United Nations Conference on Trade and Development's (UNCTAD) July trade update.
• In Q1 2024, global goods trade increased by 1% and services trade by 1.5%, potentially adding $200 billion and $100 billion respectively to their sectors.
• Despite projected growth, this figure remains below the record set in 2022.
• China, India, and the U.S. were key contributors to global trade growth in Q1 2024, with growth rates of 9%, 7%, and 3% respectively.
• Europe saw no growth in exports, while Africa experienced a decline of -5% in exports.
• Sectors such as green energy and AI-related products showed robust growth, with high-performance servers and electric vehicles both increasing in trade value by 25%.
• Other computers and storage units also saw an 8% rise in trade value.
• UNCTAD warns that geopolitical issues, rising shipping costs, and industrial policies could impact the outlook for 2024.
• There is a growing emphasis on domestic industries and trade restrictions, which might constrain international trade growth in the coming year.
• The Port of Baltimore channel has been officially reopened by the US Coast Guard, allowing normalized transit conditions with a 50-foot draft.
• Evergreen's TWS will make a call to Baltimore on July 16th with MV EVER FAME, marking the first time since the bridge collapse.

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.
• A 0.5-day wait is expected at APM Terminals.
• Waiting time of up to 3 days is expected at Port Liberty Terminal Bayonne.
• Average gate turn times are 55 minutes for single transactions and 81 minutes for double transactions.

Norfolk:

• Currently, most vessels berth on arrival.
• Bigger vessels wait approximately 3 days for a berth.
• Average gate turn times are 36 minutes for single transactions and 50 minutes for double transactions.
• Berth congestion has eased.

Charleston Terminal:

• Currently, there are 2 ships at anchor.
• Omissions from all carriers are slightly reducing the extent of the delays, but there is still up to a 3-day delay this week.
• A slight decrease to a 1-2 day delay is expected next week.
• Average truck turn times are 18 minutes at Wando Welch Terminal and 22 minutes at North Charleston Terminal.
• Dock construction at Wando Welch Terminal started on March 11, 2024, reducing berth space from 3 to 2 berths for one year.
• Berths will be given on a first-come, first-serve basis during this construction period.

Savannah:

• The waiting time for a vessel berth at the terminal is up to 3 days, depending on the vessel's size.
• Average gate turn times are 36 minutes for single transactions and 55 minutes for double transactions.
• Import dwell time is 3.1 days.

Houston:

• There is up to a 2 days waiting time for vessel berthing at Barbours Cut Terminal.
• There is a 1 day waiting time for vessel berthing at Bayport Container Terminal.
• Average gate turn times at Barbours Cut Container Terminal are 32 minutes for single transactions and 48 minutes for double transactions.
• Average gate turn times at Bayport Container Terminal are 30 minutes for single transactions and 51 minutes for double transactions.
• Loaded import dwell time is 3.7 days at Barbours Cut and Bayport.

Oakland:

• The average wait time is up to 1 day at Oakland International Container Terminal (OICT).
• The average wait time is 2 days at TraPac.
• Average import deliveries can take up to 10.1 days at TraPac.
• Average import deliveries can take 3.2 days at OICT.
• Average gate turn times are 90 minutes at OICT.
• Average gate turn times are 106 minutes at TraPac.
• The Port of Oakland has started a bollard and fender replacement project at OICT, beginning with Berth 55 through Berth 59.
• The project is expected to last into Q1 of 2025.

Seattle-Tacoma:

• There is a 3-day waiting time at Husky Terminal.
• There is up to a 3-day waiting time at Washington United Terminal in Tacoma.
• There is a 2-day waiting time in Seattle.
• Import rail dwell times are 5.3 days at Husky Terminal.
• Import rail dwell times are 8.6 days at Washington United Terminal.
• Import rail dwell times are 1-3 days at Terminal 18 (T18).
• Rail car supply is in severe deficit over the next couple of weeks in Tacoma, causing higher import rail dwell times.
• Average gate turn times are 30 minutes at T18.
• Average gate turn times are 32 minutes at Washington United Terminal.
• Average gate turn times are 72 minutes at Husky Terminal.
• Husky Terminal will no longer offer flex gate but will offer Hoot gates Tuesday through Thursday, effective June 25, 2024, for 3 months.
• Washington United Terminal is limiting their operations to a maximum of 3 gangs on vessels and 1 berth operation until further notice due to a lack of rail cars to evacuate imports.
• All terminals closed on July 4 and 5, 2024.

Los Angeles/Long Beach:

• Port of Los Angeles dwell time for local import cargo is 3 days.
• On-dock rail dwell time at Port of Los Angeles is 3.3 days.
• Import units on the street at Port of Los Angeles are averaging 3.6 days for 20 ft containers and 5.4 days for 40+ ft containers.
• Port of Long Beach dwell times for local imports are stable.
• Average terminal gate turn time at Port of Long Beach is between 23 and 70 minutes, depending on the terminal.

Chassis Pools

All pools are operating as normal except:

• Cleveland – 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.

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.

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.