Freight market update - 12 December 2024

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• The ILA and the USMX are at an impasse over the use of semi-automated rail-mounted gantry cranes (RMGs).

• Air cargo demand continued its upward trend in October, marking 15 consecutive months of growth.

• Industrial production rose by 1.6% in September, and global goods trade increased by 2.4%.

• South Korea’s exports to the U.S. exceeded 1 million TEUs in 2024, up from 600,000 TEUs in 2017.

• Vietnam’s containerized exports to the U.S. surpassed two million TEUs in the first 10 months of 2024. This figure is double the 2017 levels and represents a 41% year-on-year (y/y) increase in Q2 2024.

• Several Chinese ports, including CNSHA, CNLYG, and CNSHA-YS, faced closures due to strong winds, resulting in berth congestion and delays of 4-5 days in some areas.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Planned U.S. tariffs on Chinese imports are expected to drive increased containerized imports from Vietnam, Thailand, and South Korea, according to Linerlytica.
• Vietnam’s containerized exports to the U.S. surpassed two million TEUs in the first 10 months of 2024.
• This figure is double the 2017 levels and represents a 41% year-on-year (y/y) increase in Q2 2024.
• Vietnam’s export appeal stems from its skilled workforce, low costs, and strengthened ties with the U.S.
• Thailand’s U.S.-bound exports have tripled since 2017, reaching 900,000 TEUs by October 2024.
• This marks a 25% y/y increase, primarily driven by food and farm product shipments.
• South Korea’s exports to the U.S. exceeded 1 million TEUs in 2024, up from 600,000 TEUs in 2017.
• Key export categories include appliances and machinery.
• China’s share of U.S. containerized imports dropped from 70.4% in 2017 to 58.9% in 2024.
• Despite this decline, China remains the largest origin country for containerized imports, though Vietnam, South Korea, and Thailand are steadily gaining market share.
• The planned tariff hikes are primarily focused on Mexico and Canada, with limited impact on maritime traffic to the U.S.
• The proposed 10% tariff on Chinese goods is lower than earlier proposals and does not include a blanket tariff on all imports into the U.S.
• Linerlytica suggested these conditions could further enhance export prospects for Vietnam, South Korea, and Thailand, which have shown significant growth over the past six years.
• Several Chinese ports, including CNSHA, CNLYG, and CNSHA-YS, faced closures due to strong winds, resulting in berth congestion and delays of 4-5 days in some areas.
• Similar disruptions occurred in Indonesia (IDSUB) and South Korea (KRPUS), further compounded by vessel bunching.
• Notable congestion is ongoing in CNSHA (WGQ and YS1), Manila ports (PHMNL), and KRPUS.
• Vessel waiting times in these areas are averaging 2-5 days, significantly affecting operations and schedules.
• Ports such as Singapore (SGSIN) and Qingdao (CNTAO) reported stable operations with minimal delays of less than 1 day.
• Yard utilization in Singapore remains healthy at approximately 70%, while Malaysia's Westport (MYPKG) maintained a yard density of 83%.
• Singapore (70%) and Malaysia (83%) reflect healthy yard utilization levels.
• KRPUS faces higher yard density at 73%, with a significant CMA T/S inventory of 10.8k TEUs contributing to congestion.

Turkey → North America

• Air Cargo Demand Growth: Air cargo demand continued its upward trend in October, marking 15 consecutive months of growth.
• Cargo Tonne Kilometers (CTK): Global air cargo demand, measured in CTK, rose by 9.8% year-over-year (y/y) in October.
• Capacity Growth: Available CTK capacity increased by 5.9%, and the cargo load factor improved by 1.7 percentage points to reach 47.3%.
• Drivers of Capacity Growth: Air cargo capacity growth was driven by an 8.5% rise in international belly capacity and a 5.6% increase in freighter capacity.
• Air Cargo Yields: Global air cargo yields grew by 10.6% y/y in October and are 49% higher than 2019 levels.
• 2024 Outlook: The International Air Transport Association (IATA) anticipates strong growth for 2024.
• 2025 Concerns: IATA's Director General, Willie Walsh, warned of potential challenges in 2025.
• Proposed tariffs by the incoming Trump administration on Canada, China, and Mexico could disrupt supply chains and reduce consumer confidence.
• Walsh emphasized that geopolitical shifts may test the industry's adaptability.

Economic Indicators

• Industrial production rose by 1.6% in September, and global goods trade increased by 2.4%.
• Businesses are stockpiling inventory in preparation for potential disruptions like the U.S. port strike.
• The global Purchasing Managers Index (PMI) stayed above 50, indicating growth, but the PMI for new export orders remained below 50, reflecting trade uncertainty.

Inflation varied regionally in October

• U.S. inflation rose to 2.6%.
• EU inflation increased to 2.3%.
• China’s inflation dropped to 0.3%, raising concerns about an economic slowdown.

Regional Performance

• Latin American carriers led with an 18.5% y/y increase in cargo demand.
• Asia-Pacific airlines recorded a 13.4% y/y growth in demand.
• North American carriers experienced a 9.5% y/y rise, and European carriers saw a 7.6% y/y increase.
• Middle Eastern carriers improved by 4.5%, while African airlines grew by 1.6%, the lowest among regions.

North America → Turkey

• The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) are at an impasse over the use of semi-automated rail-mounted gantry cranes (RMGs).
• After a three-day strike in October 2024, both parties extended their current master contract deadline until January 15, 2025, to address unresolved issues.
• Recent negotiations collapsed when the ILA accused the USMX of introducing semi-automation plans mid-discussion, contradicting previous assurances.
• ILA President Harold Daggett has warned of another potential strike.
• Daggett described automation as a threat to workers' survival and stated that union members are prepared to defend their livelihoods.
• The ILA expressed support for progress, innovation, and modernization but opposed "technology that jeopardizes jobs, threatens national security, and risks the workforce's future."
• USMX argued that automation is essential for improving port efficiency and managing increasing cargo volumes without expanding land use.
• USMX highlighted a port that doubled its cargo volume after implementing semi-automated cranes as an example of automation's benefits.
• The alliance warned that restricting technology would harm capacity and hinder economic growth.
• Less than six weeks remain to reach an agreement before the January 15 strike deadline.
• The potential strike could occur a week before the next U.S. presidential inauguration.
• The ILA stated that a strike would disrupt the U.S. supply chain and economy.

LA/LB On-Dock Dwell

• The average on-dock dwell time for Los Angeles/Long Beach (LA/LB) during week 47 was 4.5 days.
• The Thanksgiving holiday caused a minor slowdown, but overall conditions are steadily returning to normal.
• Off-dock routed cargo from non-FMS terminals and specific FMS locations is experiencing an average dwell time of 11-12 days due to limited space at rail terminals.

VAN and Prince Rupert (PRR)

• Inventory levels in Vancouver (VAN) and Prince Rupert are manageable.
• Dwell times at Deltaport and Vanterm are averaging 3-4 days before rail departure.

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:

• 2.5 days waiting time expected for APMT, no waiting time at Maher Terminals, and up to 5 days at Port Liberty Terminal Bayonne.
• Average gate turn times are 44 / 72 minutes for single and double transactions respectively.

Norfolk:

• Waiting time for a berth is up to 1.5 days this week.
• Average gate turn times are 32 minutes for single transactions and 49 minutes for double transactions.

Charleston Terminal:

• 24 hours waiting time for Wando Welch Terminal and 6 hours for North Charleston Terminal.
• Average truck turn times are 19 minutes at Wando Welch Terminal and 19.5 minutes at North Charleston Terminal.
• Average truck turn time at Leatherman is 20 minutes.

Savannah:

• The average waiting time for vessel berth at the terminal is 2 days for class 1 vessels and 2.5 days for class 2.
• Average gate turn times are 35 minutes for single transactions and 51 minutes for double transactions.
• Import dwell time is 5.6 days.
• Export dwell time is 4.1 days.
• Rail dwell time is 1.4 days.

Houston:

• 1.5 days waiting time for vessel berthing at Barbours Cut Terminal and at Bayport Container Terminal.
• Average gate turn times at Barbours Cut Container Terminal are 32 minutes for single transactions and 51 minutes for double transactions.
• Average gate turn times at Bayport Container Terminal are 40 minutes for single transactions and 61 minutes for double transactions.
• Loaded import dwell is 3.5 days at Barbours Cut and 3.4 days at Bayport.

Oakland:

• 1 day waiting time for Oakland Int’l Container Terminal (OICT) and TraPac.
• Average import deliveries can take up to 6.9 days at TraPac and 3.5 days at OICT.
• Average gate turn times are 78 minutes at OICT and 102 minutes at TraPac.

Seattle-Tacoma:

• 2.5 says waiting time for time at Husky and 2.0 days at Washington United terminal at Tacoma.
• No waiting time in Seattle.
• Import rail dwell are 3.5 days at Husky, 3.2 days at Washington United Terminal, and 1 to 3 days at T18.
• The average gate turn times are as follows: 32 minutes for T18, 30 minutes for Washington United Terminal, and 87 minutes for Husky.
• T18 will be closed on Dec 12 and 20, 2024.

Los Angeles/Long Beach:

• Port of Los Angeles dwell time for local import cargo is 3.2 days.
• On-dock rail dwell is 4.8 days.
• Import units on the street are averaging at 4.5 / 6.7 days for 20 ft and 40+ ft containers respectively.

Chassis Pools

All pools are operating as normal except:

• Chicago – Constrained on 20’ and 40’ chassis.
• Cleveland – Constrained on 40’ Chassis.
• Louisville – Deficit on 20’ Chassis.
• Memphis – Constrained on 40’ Chassis.
• Kansas City - Deficit on 40’ Chassis.
• St. Louis - 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, the market is currently in the course of showing 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.