Freight market update - 12 September 2024

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• Dockworkers on the U.S. East and Gulf Coast may strike unless a contract is reached by September 30.

• Talks between the dockworker’s union, the International Longshoremen’s Association (ILA), and port owners, represented by the United States Maritime Alliance (USMX), have stalled since June.

• Ocean freight rates from Asia-Europe, which experienced an early peak season starting in April, are now decreasing as European import demand slows.

• Asia-North Europe rates have dropped by $2,700 per FEU since July, though they remain four times higher than last year.

• With talks still not producing results, a potential ILA strike on October 1st poses a serious threat to US East and Gulf Coast ports.

• The strike would impact major East and Gulf Coast ports, including key hubs such as New York/New Jersey, Savannah, Charleston, Houston, Miami, and Port Everglades.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Ocean freight rates from Asia-Europe, which experienced an early peak season starting in April, are now decreasing as European import demand slows.
• Asia-North Europe rates have dropped by $2,700 per FEU since July, though they remain four times higher than last year.
• Asia-Mediterranean rates have also seen a steep decline.
• A global freight forwarder highlighted the pulling forward of shipments due to extended transit times via the Cape of Good Hope.
• August bookings were strong, but September saw a -10% drop, despite a positive Q4 forecast from customers.
• Peter Sand, chief analyst at Xeneta, noted that vessel load factors from Asia to Europe were at 95% in the second quarter.
• Sand expects full ships and high rates for the remainder of the year, but the capacity squeeze may not last due to the frontloading of shipments.
• He also mentioned that carriers were not blanking sailings despite reaching peak capacity in August, suggesting the trade lane had found “a balance between supply and demand.”
• Sea-Intelligence Maritime Analysis warned of growing volatility in weekly capacity on the Asia-Europe trade.
• The analyst advised cargo owners to plan carefully, even if pro-forma schedules indicate sufficient capacity.
• A strong Q3, 2024 for air freight has raised expectations for continued performance in Q4.
• Global cargo demand experienced double-digit growth, increasing by 11% in August.
• Lufthansa Cargo noted unusually high freight rates for this time of year, driven by supply and demand pressures, including geopolitical factors.
• Niall van de Wouw, Chief Airfreight Officer at Xeneta, reported double-digit demand growth in August, defying the typical summer slowdown.
• Van de Wouw predicts a busy Q4, noting that e-commerce usually grows significantly in Q4 compared to Q3.
• Export flights from Asia are already 84%-88% full, according to van de Wouw.
• Chinese e-commerce giant Temu, with 37 million app downloads in July, is expected to drive considerable air cargo demand.
• Van de Wouw highlighted the potential impact of Temu’s 37 million consumers on air freight demand.
• Lufthansa Cargo confirmed that peak season rates are expected in the coming months.
• FedEx and UPS also foresee strong international and U.S. domestic demand in Q4.
• Van de Wouw warned that rate changes will vary by trade lane, with rates from India or Bangladesh potentially doubling or tripling.
• Other routes might see rates 20%-30% lower than last year, but the most significant increases are expected on trades out of Asia.
• In Busan, at BNCT on September 4, laden yard density was around 65%, with CMA T/S inventory at approximately 8.4k TEUs.
• Week 36 saw heavy congestion, causing a waiting/delay of 1.5-2 days due to the bunching of late incoming vessels and high transshipment activities from contingencies.
• PSA is cautious about accepting ad-hoc and heavy discharge vessels to avoid disrupting the current stability.
• Several ports in China (CNNSA, CNSHK, CNYTN), Hong Kong (HKHKG), and Japan (JPHKT, JPMOJ, JPOIT, JPSBS) are facing significant disruptions due to severe typhoons YAGI and SHANSHAN.
• These disruptions have led to port closures, suspended pilotage, and potential evacuations.
• Normal operations are expected to resume after the typhoons' landfall or when conditions improve.
• Causes of congestion include the bunching of late-arriving vessels, high transshipment activities, and adverse weather conditions, with wait times ranging from 1-4 days.

Turkey → North America

• With talks still not producing results, a potential ILA strike on October 1st poses a serious threat to US East and Gulf Coast ports.
• Workers are standing firm in their demands regarding pay and automation.
• The strike would impact major East and Gulf Coast ports, including key hubs such as New York/New Jersey, Savannah, Charleston, Houston, Miami, and Port Everglades.
• Freight rates from North Europe to the US East Coast have increased.
• Carriers are maintaining high utilization rates for both North European and Mediterranean services.
• These high utilization rates have led to rate increases in September.
• A follow-up Peak Season Surcharge (PSS) is expected in October.

North America → Turkey

• Dockworkers on the U.S. East and Gulf Coast may strike unless a contract is reached by September 30.
• Talks between the dockworker’s union, the International Longshoremen’s Association (ILA), and port owners, represented by the United States Maritime Alliance (USMX), have stalled since June.
• No new talks are scheduled between the two parties.
• Both sides are at an impasse over issues related to wages and automation.
• A strike would impact 60% of U.S. container volumes, amounting to $588 billion in annualized trade value.
• Some shippers have diverted cargo to other ports to avoid the strike’s impact.
• Significant volumes of cargo are still headed to the U.S. East and Gulf Coasts that cannot be diverted.
• Unlike past negotiations, the USMX is firm in its stance, despite previous concessions to keep goods moving.
• The potential strike comes at a politically sensitive time, with federal agencies aware of the possible economic fallout ahead of the November 5 presidential election.

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:

• 1 day waiting time is expected for a berth at Maher Terminals LLC and 2 days at APM Terminals.
• Waiting time of up to 4 days is expected at Port Liberty Terminal Bayonne.
• Average gate turn times are 51 minutes for single transactions and 75 minutes for double transactions.
• Truck line port congestion continues.
• We are seeing some summer labor shortages so the number of gangs available for certain shifts may be reduced.
• One waterside stack at PLB Bayonne is out of service until next week. There is minimal impact on vessel operations expected.

Norfolk:

• Currently, most vessels berth on arrival.
• Bigger vessels wait approximately 2.5 days for a berth.
• Average gate turn times are 33 minutes for single transactions and 48 minutes for double transactions.

Charleston Terminal:

• 2 days waiting time for Wando Welch Terminal and 0.5 days for North Charleston Terminal.
• Average truck turn times are 17 minutes at Wando Welch Terminal and 24 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.

Savannah:

• The waiting time for a vessel berth at the terminal is up to 1.5 days, depending on the vessel's size.
• Average gate turn times are 34 minutes for single transactions and 55 minutes for double transactions.
• Import dwell time is 2.6 days.
• Export dwell time is 7.4 days.

Houston:

• There is a 1 day waiting time for vessel berthing at Barbours Cut Terminal and Bayport Container Terminal.
• Average gate turn times at Barbours Cut Container Terminal are 33 minutes for single transactions and 51 minutes for double transactions.
• Average gate turn times at Bayport Container Terminal are 28 minutes for single transactions and 46 minutes for double transactions.
• Loaded import dwell is 3.8 days at Barbours Cut and 3.6 days at Bayport.

Oakland:

• No waiting time at Oakland Int’l Container Terminal (OICT) and at TraPac.
• Average import deliveries can take up to 5.3 days at TraPac and 3.2 days at OICT.
• Average gate turn times are 90 minutes at OICT and 79 minutes at TraPac.
• Port of Oakland has started a bollard and fender replacement project at OICT.
• It is starting with Berth 55 through Berth 59.
• The project is expected to last into Q1 2025.
• Berth 55 is complete, and has moved to Berth 56.

Seattle-Tacoma:

• There is a 4 day waiting time at Husky Terminal and 13 days at Washington United Terminal in Tacoma.
• There is a 5 day waiting time in Seattle.
• Import rail dwell times are 5.8 days at Husky Terminal.
• Import rail dwell times are 6.7 days at Washington United Terminal but some places see up to 14 days.
• Import rail dwell times are 5-7 days at Terminal 18 (T18).
• Average gate turn times are 42 minutes at T18.
• Average gate turn times are 28 minutes at Washington United Terminal.
• Average gate turn times are 57 minutes at Husky Terminal.
• T18 will be closed on September 13, 2024.

Los Angeles/Long Beach:

• Port of Los Angeles dwell time for local import cargo is 3.1 days.
• On-dock rail dwell time at Port of Los Angeles is 7.8 days.
• Import units on the street at Port of Los Angeles are averaging 3.7 days for 20 ft containers and 5.8 days for 40+ ft containers.
• Average terminal gate turn time at Port of Long Beach is between 23 and 75 minutes, depending on the terminal.

Chassis Pools

All pools are operating as normal except:

• Columbus – Deficit on 40’ chassis.
• Indianapolis - Deficit on 40’ chassis.
• Louisville – Deficit on 40’ chassis.
• Memphis – Constrained on 20’ and deficit on 40’ chassis.
• Buffalo – Constrained on 20’ 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.