Freight market update - 14 November 2024

Greetings!

Our objective is to make your shipping experience easier by offering you the latest and most informative details and insights regarding the freight market. We aim to provide accurate and relevant content that brings benefits to your business.

We highly value your feedback as we continuously strive to improve the quality of our weekly market updates. We value your thoughts on our current content and encourage you to suggest specific topics that you would like us to cover in more depth.

We wish to create the most informative newsletter possible. We appreciate your continued readership and subscription, and we thank you for taking the time to provide us with your valuable feedback, which will help us enhance our future performance.

• Container shipping may experience potential overcapacity, according to market outlook assessments.

• S&P Global reports that carriers project a 9% growth in capacity, while cargo volume is expected to rise by only 3% in 2025.

• Drewry projects container shipping profits in 2024 could reach $50 billion, providing carriers with financial resilience for an unpredictable 2025.

• In September, global schedule reliability dropped to 51.4%, marking the lowest level in 24 months.

• This represents a 1.2 percentage point decline, with reliability staying between 50% and 55% throughout 2024 but trending downward since May.

• None of the top 13 carriers showed year-over-year improvements, and the average delay for late arrivals increased by 0.21 days to 5.67 days.

• Port congestion is most severe in Asia, especially at ports in China, Singapore, Hong Kong, and Korea, according to Linerlytica.

• The world’s top 20 airports handle approximately 42% of global cargo volumes, despite a -3.2% year-over-year decline, as reported by ACI World.

• In 2023, global air cargo volumes dropped by -1.8% to 115 million tonnes, yet the leading airports maintained their rankings.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Container shipping may experience potential overcapacity, according to market outlook assessments.
• S&P Global reports that carriers project a 9% growth in capacity, while cargo volume is expected to rise by only 3% in 2025.
• BIMCO forecasts a 16% increase in capacity, with cargo volumes predicted to grow by just 4-5%.
• However, Maersk CEO Vincent Clerc believes that concerns over a supply-demand imbalance are unwarranted.
• Clerc suggests that, even if vessels could transit the Suez Canal in 2025 and all absorbed capacity returns, the market would not experience severe oversupply.
• Clerc highlights that demand remains strong and notes, “The fact that there is no sign of an inventory correction or a sharp decrease around the corner is maybe more optimistic than it was a year ago.”
• Vessel scrapping is also expected to reduce supply, as many older ships approach the end of their operational life.
• Approximately 2-3% of capacity is likely to be scrapped annually as freight rates stabilize.
• Clerc explains that this level of scrapping will significantly reduce capacity in the coming year.
• So far in 2024, only 75,998 TEUs of capacity have been scrapped, compared to 2.5 million TEUs delivered.
• HSBC’s global head of transport and logistics research, Parash Jain, points out Maersk’s supply management strategy, which includes slow steaming, blanked sailings, and vessel scrapping.
• Delays at Asian and European ports are also contributing to absorbed capacity.
• Sea-Intelligence notes that these delays predate the current Red Sea disruptions.
• Drewry projects container shipping profits in 2024 could reach $50 billion, providing carriers with financial resilience for an unpredictable 2025.

Turkey → North America

• In September, global schedule reliability dropped to 51.4%, marking the lowest level in 24 months.
• This represents a 1.2 percentage point decline, with reliability staying between 50% and 55% throughout 2024 but trending downward since May.
• Alan Murphy, CEO of Sea-Intelligence, noted that despite lower reliability, minimal volatility has helped shippers predict month-to-month performance.
• A brief improvement in global schedule reliability occurred in mid-2023, reaching 64%.
• However, Houthi attacks in the Red Sea disrupted container schedules, leading to a reliability decline in December 2023.
• Maersk led as the top carrier in September with a reliability score of 55.5%, down from 70% in 2023.
• CMA CGM was the only other carrier scoring above 50%, at 50.9%.
• Wan Hai had the lowest reliability among carriers, with a score of 40.4%.
• None of the top 13 carriers showed year-over-year improvements, and the average delay for late arrivals increased by 0.21 days to 5.67 days.
• Port congestion is most severe in Asia, especially at ports in China, Singapore, Hong Kong, and Korea, according to Linerlytica.
• Additional pressure points have emerged at the U.S. port of Savannah and major container ports in Northern Europe.
• Maersk anticipates that disruptions due to Red Sea conflicts will extend into 2025.

North America → Turkey

• Ocean carriers at ports in Mexico and Central America are adjusting routes and creating contingency plans to maintain schedule reliability.
• Carriers and forwarders cite high trade volumes, particularly from Mexico, as a primary factor behind these challenges.
• In response to ongoing port congestion and berthing delays, Maersk and CMA CGM have modified their service loops, prioritizing specific ports.
• This updated port rotation aims to enhance transit times and improve schedule consistency.
• Other carriers, such as Hapag-Lloyd and Ocean Network Express, are facing similar issues at ports in Mexico, Panama, and Colombia.
• Delays are attributed to high yard utilization, which is disrupting cargo flow and affecting vessel schedules.
• A global forwarder reported substantial disruptions at Manzanillo, Christobal, and Acajutla ports, with vessel wait times ranging from three to seven days.
• The world’s top 20 airports handle approximately 42% of global cargo volumes, despite a -3.2% year-over-year decline, as reported by ACI World.
• In 2023, global air cargo volumes dropped by -1.8% to 115 million tonnes, yet the leading airports maintained their rankings.
• Hong Kong ranked first among cargo airports, followed by Memphis, Shanghai Pudong, Anchorage, and Incheon in the top five positions.
• Diederik Meijerink, senior director of data and analytics at ACI World, attributes the concentration of cargo at major hub airports to their infrastructure, strategic locations, and large handling capacities.
• Chinese airports experienced significant growth, driven by rising e-commerce demand and increased aircraft movements, enhancing belly cargo capacity.
• Guangzhou and Shanghai saw aircraft movements increase by 71.1% and 112.3%, respectively.
• Meijerink anticipates that more Chinese airports may enter the global top 20 cargo rankings next year.
• European cargo hubs continued to decline, with only Paris and Frankfurt remaining in the top 20.
• Middle Eastern airports like Doha returned to pre-pandemic rankings, while U.S. airports displayed mixed results.
• Cincinnati climbed in the rankings, benefiting from robust e-commerce activity and its strategic location as a hub for Amazon and DHL.
• Overall, European top cargo gateways are slipping, with only Paris and Frankfurt still in the top 20.
• ACI World forecasts that global cargo volumes will reach 121 million tonnes by the end of 2024 and 126 million tonnes by 2025.
• Meijerink notes that the air cargo sector has demonstrated resilience and growth momentum, despite uncertainties in trade policies.
• IATA’s data from last year similarly reflected cautious optimism among carriers in the air cargo industry.

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 days waiting time expected for APMT, 1 day at Maher Terminals, and up to 4 days at Port Liberty Terminal Bayonne.
• Average gate turn times are 40 / 59 minutes for single and double transactions respectively.
• Crane delivery at Port Liberty Terminal in Bayonne is complete.
• Berths 1 and 2 are now available for vessels.

Norfolk:

• Currently, most vessels berth on arrival.
• Bigger vessels wait approximately 3 days for a berth.
• Average gate turn times are 43 minutes for single transactions and 64 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 20 minutes at North Charleston Terminal.

Savannah:

• The waiting time for a vessel berth at the terminal is up to 2.8 to 5 days, depending on the vessel's size.
• Average gate turn times are 34 minutes for single transactions and 54 minutes for double transactions.
• Import dwell time is 3.2 days. Export dwell time is 4 days.

Houston:

• There is no waiting time for vessel berthing at Barbours Cut Terminal and at 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 35 minutes for single transactions and 54 minutes for double transactions.
• Loaded import dwell is 3.3 days at Barbours Cut and 3.3 days at Bayport.

Oakland:

• No waiting time at OICT, and 1 day waiting time at TraPac.
• Average import deliveries can take up to 4.3 days at TraPac and 3.5 days at OICT.
• Average gate turn times are 78 minutes at OICT and 60 minutes at TraPac.

Seattle-Tacoma:

• No waiting time at Husky and Washington United terminal at Tacoma.
• No waiting time in Seattle.
• Import rail dwell are 2.9 days at Husky, 1.9 days at Washington United Terminal, and 3 to 5 days at T18.
• The average gate turn times are as follows: 39.4 minutes for T18, 23.2 minutes for Washington United Terminal, and 115 minutes for Husky.
• T18 will be closed on November 8,11 and 22, 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 8 days.
• Import units on the street at Port of Los Angeles are averaging 3.6 days for 20 ft containers and 5.8 days for 40+ ft containers.
• Port of Long Beach dwell times for local imports are starting to go up to 5-9 days.
• The average terminal gate turn time is around 21-90 minutes, based on the terminal.

Chassis Pools

All pools are operating as normal except:

• Minneapolis / St. Paul - Constrained on 40’ chassis.
• Cleveland – Deficit on 40’ chassis.
• Louisville – Deficit on 20’ and 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.