Freight market update - 12 February 2025

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• The decline in cargo volumes in North Asia following the Chinese New Year holidays has helped alleviate congestion at Chinese and Korean ports.

• The total vessel capacity waiting at anchorages in North Asia has dropped by over 50% from its recent peak in January.

• According to Sea Intelligence, schedule reliability dropped 10% year over year (YoY) compared to 2023.

• The 2M Alliance between MSC and Maersk will end in 2025.

• Hapag-Lloyd will join Maersk in the Gemini Cooperation starting in February 2025.

• The Ocean Alliance has extended its agreement until 2032, providing stability amid industry changes.

• The Trump administration’s stance on the de minimis tariff exemption has impacted U.S. trade dynamics.

• This exemption allows goods valued under $800 to enter the U.S. tariff-free.

• The full reopening of the Red Sea remains uncertain.

• Even if the Suez Canal reopens, the impact on global shipping capacity may be limited.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• The decline in cargo volumes in North Asia following the Chinese New Year holidays has helped alleviate congestion at Chinese and Korean ports.
• The total vessel capacity waiting at anchorages in North Asia has dropped by over 50% from its recent peak in January.
• In the past two weeks, 30% to 60% of the regular capacity departing from Chinese ports has been blanked.
• This reduction has significantly slowed vessel activity, enabling ports to recover from the recent surge in volumes.
• Early flash reports indicate trends from January.
• Instead, November capacity has increased by 8% for both the West and East Coasts compared to October.
• Demand remains steady as companies prepare for potential disruptions related to the January 15 labor negotiations for East and Gulf Coast ports.
• Freight rates are slowly declining but remain elevated compared to pre-pandemic levels.

Port Congestion and Shipping Adjustments

China:

• Major transshipment hubs like Shanghai and Ningbo are facing significant congestion.
• Ports such as Shekou and Yantian are operating more smoothly.

Mediterranean-India Routes:

• Shipping routes are evolving with carriers optimizing schedules and reallocating vessels.
• New direct services and strategic port call adjustments are helping mitigate congestion and delays.

U.S. West Coast (USWC) Demand Surge:

• Increased demand for USWC services is driven by:
• Extended transit times via the Cape of Good Hope.
• Cargo diversions from the ILA strike on USEC and USGC ports.
• USWC port volumes have risen by 16–20% compared to the same period in 2023.

Port Congestion and Schedule Reliability

• Asian and USWC ports, along with some USEC ports like Charleston, are facing congestion.
• This congestion is causing schedule unreliability and potential blank sailing weeks.
• Major transshipment ports in Asia, including Busan, Shanghai, Ningbo, and Singapore, are experiencing delays of 14–21 days.

Increased transshipment activity has led some carriers to switch to alternative hubs in:

• Malaysia
• India
• Colombo
• This shift is causing congestion at these alternative ports as well.

Turkey → North America

• The Trump administration’s stance on the de minimis tariff exemption has impacted U.S. trade dynamics.
• This exemption allows goods valued under $800 to enter the U.S. tariff-free.
• Initially suspended, the exemption's delay provides short-term relief.
• The administration has signaled a willingness to revisit the exemption, creating uncertainty for importers.

Red Sea and Suez Canal Reopening Uncertainty

• The full reopening of the Red Sea remains uncertain.
• Carriers are unlikely to resume Suez Canal transits until phases 2 and 3 of the ceasefire are confirmed.
• No immediate changes are expected before mid-year, with a gradual return likely due to a three-month stabilization period for new routings.

Even if the Suez Canal reopens, the impact on global shipping capacity may be limited because:

• 7% of the global fleet remains delayed.
• No major vessel scrapping has occurred in the past five years.

The Suez Canal Authority is working to restore maritime traffic by:

• Enhancing security measures.
• Expanding the canal with a 10 km extension to accommodate 6–8 additional vessels per day.
• For now, shippers should expect continued reliance on the Cape of Good Hope route, especially for backhaul trades.

North America → Turkey

• On October 3, 2024, after three days of strikes at U.S. East Coast (USEC) and Gulf Coast (USGC) ports, the International Longshoremen’s Association (ILA) and U.S. Maritime Alliance (USMX) reached a tentative wage agreement.
• The Master Contract has been extended until January 15, 2025, to allow further negotiations on wage increases, benefits, and port automation limits.
• The ILA is particularly concerned about job security due to automation, fearing job losses from increased automation.
• They are also pushing for better health and retirement benefits to support workers.
• The agreement covers most U.S. East and Gulf Coast ports and aims to establish a new six-year contract.

Impact on U.S. West Coast Ports

• Since September, shipments routed via the U.S. West Coast (USWC) have faced increased dwell times at ports before being loaded onto rail.
• Many shippers, who shifted cargo to the West Coast to avoid East and Gulf Coast disruptions, plan to continue this strategy until a final agreement is reached.
• Significant relief in West Coast congestion is not expected soon due to ongoing railcar shortages.
• Containers continue to pile up at terminals, disrupting the first-in, first-out (FIFO) pattern.

Global Port Congestion

Severe congestion is developing at major transshipment hubs due to:

• Vessel diversions caused by the Suez Canal crisis.
• Adverse weather in Asia and Latin America.
• An early peak season across all Asia trades.
• Asia: Ports like Shanghai, Ningbo, and Singapore are heavily congested.
• Latin America: Key ports such as Santos and Manzanillo are facing similar issues.
• West Mediterranean: Ports like Valencia and Algeciras are experiencing significant delays.
• Cargo diversions from the East to the West Coast due to the ILA strike are causing congestion at ports like Los Angeles and Long Beach.
• Carriers are struggling to maintain schedule reliability.
• According to Sea Intelligence, schedule reliability dropped 10% year over year (YoY) compared to 2023.

Suez Canal Crisis and Its Impact

• Since December 15, 2023, many maritime carriers have opted to bypass the Suez Canal following container vessel attacks from a region in Yemen.
• Most vessels are now rerouting around the Cape of Good Hope, adding approximately 14 days to transit times.
• This alternative route affects global shipping, not just Red Sea trade but all trade lanes worldwide.
• Blank sailings and service disruptions may persist.
• An estimated 6–9% of global shipping capacity is absorbed by this new routing.

The 2M Alliance Dissolution

• The 2M Alliance between MSC and Maersk will end in 2025.
• MSC has formed a vessel-sharing agreement with ZIM on the Trans-Pacific route and with Premier Alliance on the Asia–Europe route.
• Hapag-Lloyd will join Maersk in the Gemini Cooperation starting in February 2025.
• The company will end its cooperation with ACL and adjust its port calls.
• The Gemini Cooperation aims to improve schedule reliability through a hub-and-spoke model, with success dependent on the effectiveness of its transshipment strategy.
• The Ocean Alliance (ONE, Yang Ming Line, Hyundai Merchant Marine) has extended its agreement until 2032, providing stability amid industry changes.

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:

• 3.5 days waiting time expected for APMT, 0.5 days waiting time at Maher Terminals, and up to 4.5 days at Port Liberty Terminal Bayonne.
• Average gate turn times are 49 / 77 minutes for single and double transactions respectively.
• APMT - new cranes arrived and are in process of being commissioned.
• Berth space will still be limited but 2 vessels will now be able to be worked simultaneously.

Norfolk:

• Waiting time for a berth is up to 1.7 days this week.
• Average gate turn times are 30 minutes for single transactions and 47 minutes for double transactions.
• One crane is out of service.
• However, it is expected to be back working next month.

Charleston Terminal:

• 2.5 days waiting time for Wando Welch Terminal and 0.5 days for North Charleston Terminal.
• Average truck turn times are 21 minutes at Wando Welch Terminal and 23 minutes at North Charleston Terminal.
• Average truck turn time at Leatherman is 15 minutes.

Savannah:

• The average waiting time for vessel berth at the terminal is 4.5 to 6 days for class 1 and class 2 vessels.
• Fog continues to impact vessel operations from January 31st.
• Average gate turn times are 33 minutes for single transactions and 49 minutes for double transactions.
• Import dwell time is 3.3 days.
• Rail dwell time is 1 day.

Houston:

• Up to 2 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 31 minutes for single transactions and 49 minutes for double transactions.
• Average gate turn times at Bayport Container Terminal are 34 minutes for single transactions and 56 minutes for double transactions.
• Loaded import dwell is 4.3 days at Barbours Cut and 4 days at Bayport.

Oakland:

• Average import deliveries can take up to 7.1 days at TraPac and 4 days at OICT.
• TraPac has 1900 units out of stock and not available for pick up.
• They are seeing a lot of appointments not being fully used.
• Average gate turn times are 78 minutes at OICT and 76 minutes at TraPac.
• The Port of Oakland has started a bollard and fender replacement project at OICT.
• The Port of Oakland has started a bollard and fender replacement project at OICT, starting with Berth 55 through Berth 59.
• The project is expected to finish at the end of February 2025.
• Berths 55, 56 and 57 are now complete, work has moved to Berth 58.
• OICT will be closed on February 10 and February 17, 2025, for President’s Day.

Seattle-Tacoma:

• 3 days waiting time at Husky and no waiting time at Washington United terminal at Tacoma.
• No waiting time in Seattle.
• Import rail dwell are 3.4 days at Husky, 4.6 days at Washington United Terminal, and 3 days at T18.
• The average gate turn times are as follows: 28 minutes for T18, 25 minutes for Washington United Terminal, and 61 minutes for Husky.
• Effective January 6, 2025, T18 has moved to a 5 day a week operation.
• Washington United Terminal will be closed on February 17, 2025, for President’s Day.
• Terminal 18 will be operating a limited gate on February 12.
• It will remain closed on February 17, 2025.

Los Angeles/Long Beach:

• Port of Los Angeles dwell time for local import cargo is 3.3 days.
• On-dock rail dwell is 6.8 days.
• Import units on the street are averaging at 4.9 / 6.7 days for 20 ft and 40+ ft containers respectively.
• Port of Long Beach dwell times for local imports remain at 4-8 days.
• The average terminal gate turn time is between 23-61 minutes, depending on the terminal.

Chassis Pools

All pools are operating as normal except:

• Chicago – Constrained on 20’ and 40’ chassis.
• 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, 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.