Freight market update - 15 May 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.

Moreover, we are open to adjusting the style of our updates to better align with your preferences. If there are any ports or regions that we haven't addressed yet but you're interested in, please let us know.

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.

• Air cargo demand maintains strength with double-digit growth reported by IATA for March and an additional 11% increase in April according to Xenata.

• Panama Canal transits are increasing as drought conditions in the region improve, although a full recovery isn't expected until 2025. Rainfall in the area is boosting water levels on Gatun Lake, according to the Panama Canal Authority.

• IATA reports continued strong demand for air cargo, with total demand increasing by 10.3% compared to March 2023 levels, while capacity has increased by 7.3%.

• Singapore Airlines Group finalizes an agreement to purchase 1,000 tons of Sustainable Aviation Fuel (SAF) from Neste, marking the first receipt of fuel from Neste's Singapore refinery for the group's two airlines.

• Xeneta, a freight analytics company, reports a new record high Carbon Emissions Index (CEI) of 104.7 in the first quarter of the year, measuring emissions per ton of cargo shipped across 13 key trades.

• US Central Command (Centcom) confirms the successful interception of a ballistic missile launched from Houthi-controlled Yemen into the Gulf of Aden on April 24, targeting a Maersk vessel.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Singapore Airlines Group finalizes an agreement to purchase 1,000 tons of Sustainable Aviation Fuel (SAF) from Neste, marking the first receipt of fuel from Neste's Singapore refinery for the group's two airlines.
• Neste's Singapore refinery expansion in May 2023 enables production of one million tons of SAF annually.
• My Freighter, based in Uzbekistan, gains approval to include Mainland China in its international network, expanding operations with the recent addition of their third Boeing 767 freighter.
• The carrier, specializing in dangerous goods and perishable transportation, currently operates four freighters, including one 747-200F, but has not disclosed the start date for its Mainland China operations.
• CMA CGM launched the new M2X (Mexico Express) service on May 11, connecting far east Asia ports with Mexico ports, as part of its Transpacific portfolio.
• The service enhances connectivity for reefer containers, directly linking refrigerated containers from the west coast of Mexico and Central America to key markets in northern Mainland China and Japan, reflecting regional market trends and CMA CGM's commitment to quality service and business growth.
• Dnata plans to introduce new technological innovations to enhance visibility in supply chain operations, aligning with its global strategy to digitize operations.
• The company has initiated the use of drones at Dubai International Airport (DXB) to monitor shipments.
• Qatar Cargo aims to enhance operational efficiency through index-linked long-term contracts and increased integration of data into its systems, offering greater insight into supply chains and dynamic market conditions.
• Index-linked contracts help mitigate price volatility and streamline renegotiation processes during market rate fluctuations.
• Oman Air Cargo partners with Revenue Technology Services (RTS) to automate essential revenue and pricing processes, aiming to improve efficiency in cargo operational systems and deliver seamless customer experiences through transformative strategic collaboration.
• DP World, a Dubai-based maritime services company, completes the acquisition of Savan Logistics, operator of Savannakhet dry port in Laos' Savannakhet Special Economic Zone (SEZ), as part of its strategic investments to enhance regional connectivity.
• Xeneta, a freight analytics company, reports a new record high Carbon Emissions Index (CEI) of 104.7 in the first quarter of the year, measuring emissions per ton of cargo shipped across 13 key trades.
• Containers routed through the Cape of Good Hope add an average of 5,800 nautical miles, contributing to increased vessel carbon emissions.
• US Central Command (Centcom) confirms the successful interception of a ballistic missile launched from Houthi-controlled Yemen into the Gulf of Aden on April 24, targeting a Maersk vessel.
• The vessel, identified as the US-flagged Maersk Yorktown, belongs to Maersk Line Ltd., part of the Danish company's US-owned fleet.
• Major shipping lines are introducing new express routes between Asia and Mexico's ports, coinciding with a rise in container volumes and freight rates reaching nearly two-year highs.
• COSCO and its subsidiary OOCL have initiated the Transpacific Latin Pacific 5 (TLP5) service, offering transit times of 15 to 20 days and direct connections between China, South Korea, Japan, and Mexico.
• CMA CGM is set to launch the M2X Mexico Express service on May 11, linking ports in China, South Korea, and Japan with Mexico.
• MSC will commence its loop shuttle service on May 15, featuring port rotations covering China, South Korea, and Mexico, while also adjusting its services by canceling U.S. port calls to prioritize Central America.
• Container shipping imports from China to Mexico have surged over 33% year-on-year in the first quarter of 2024.
• Factors driving this increase include the relocation of manufacturing operations to Mexico (nearshoring) and ongoing geopolitical tensions between the United States and China.
• The container shipping market for the Asia-Europe trade has experienced chaos in recent weeks, marked by soaring spot freight rates and tightening capacity.
• Drewry’s World Container Index (WCI) indicates a 20% surge in 40ft rates from Shanghai to Rotterdam and a 16% increase in rates from Shanghai to Genoa within a week.
• Carriers are prioritizing higher-paying shipments over contracted cargo due to the combination of skyrocketing spot rates and limited capacity out of Asia, as reported by shippers and forwarders.
• Peter Sand, chief analyst at Xeneta, predicts carriers will impose new surcharges on contracted shippers.
• Further rate hikes are anticipated in the coming months, potentially exceeding previous peak levels observed in mid-January.
• Xeneta’s spot rate index for the Asia-North America trades demonstrates a similarly robust performance, with a 145% increase per 40ft, while the WCI shows a 116% surge for the week.
• Ocean carriers like ONE, Hapag-Lloyd, and X-Press Feeders are experiencing increased waiting times at ports in China and Southeast Asia due to rising congestion.
• Delays are attributed to longer vessel transits around the Cape of Good Hope, adverse weather conditions, and higher volumes passing through the region.
• Port congestion in key hubs such as Singapore, Shanghai, Ningbo in China, and Port Kelang in Malaysia is causing ship turnarounds to be delayed by three to six days, according to a shipper.
• X-Press Feeders, serving smaller ports not accessible to larger container ships, reports delays of 0.96 days in Singapore and 2.03 days in Shanghai.
• Chinese ports are also grappling with a container shortage, compounding challenges for cargo owners on the supply side.
• The ongoing conflict in Gaza and Houthi attacks on commercial vessels pose additional challenges to overcoming these delays. Recent data shows that slightly over half of vessels arrived on time in March.

Turkey → North America

• Starting July 1, new Food and Drug Administration (FDA) regulations mandate cosmetics companies to submit product listings and facility registrations. These regulations encompass makeup, nail polish, skincare items, and others.
• Manufacturers and processors must register facilities, update information within 60 days of changes, and renew registrations every two years. Cosmetic products and their ingredients must be listed with the FDA, with annual updates.
• Certain small businesses and products are exempt. Non-compliance may result in import detention or refusal.
• US Customs and Border Protection (CBP) proposes reclassifying wireless headphone sets as headphones and earphones under HTSUS 8518.30.20 (duty-free) category instead of as apparatus for transmitting data HTSUS 8517.62.0050 (duty-free).
• The Bluetooth-enabled headsets include speakers, microphones, and transceivers for wireless communication. CBP considers them primarily as devices for converting signals into sound, with transmission functions being secondary.
• The EU progresses towards final formal approval from the EU Council for a regulation prohibiting goods produced using forced labor from sale, import, or export.
• Upon approval, violative products must be withdrawn from the EU market and either donated, recycled, or destroyed within three years.
• U.S. retailers are forecasting sustained high import volumes exceeding 2 million TEUs monthly throughout the 2024 peak shipping season, according to the latest Global Port Tracker (GPT) by the National Retail Federation (NRF).
• Jonathan Gold, NRF's vice president for supply chain and customs policy, highlights a significant increase compared to the past two years.
• May imports are expected to reach 2.06 million TEUs, up 6.8% year-on-year (y/y). June is projected at 2.03 million TEUs, marking a 10.7% y/y increase, while July’s imports are estimated at 2.02 million TEUs, up 5.5% y/y.
• August’s projections have also been upgraded, with expected imports of 2.1 million TEUs, reflecting a 7.1% y/y increase.
• Despite economic and geopolitical uncertainties, retailers maintain optimism and anticipate import growth throughout the peak season.
• The steady year-on-year increases in the second half of 2024 indicate a return to normal seasonal growth patterns for imports.
• Containers currently on the water will be discharged and Bill of Lading (BL) terminated at Port of Discharge (POD) Norfolk.
• For any ad hoc inland delivery required to Baltimore, please contact the Import Customer Service team. Inland deliveries will be invoiced at cost. No barge solution can be provided until further notice.
• Containers still at quay or yet to be ingated in Asia can be rerouted to alternative PODs such as Norfolk or New York. Bookings will be rated according to existing Norfolk/New York contract rates.
• For any ad hoc inland delivery required to Baltimore, rates can be quoted as per the public tariff. No barge solution can be provided until further notice.
• Due to lack of visibility on access to Baltimore Seagirt terminal by water, no booking requests to POD Baltimore can be accepted until further notice.
• Additionally, barge solutions into Baltimore at the moment cannot be offered until further notice.

North America → Turkey

• Air cargo demand maintains strength with double-digit growth reported by IATA for March and an additional 11% increase in April according to Xenata.
• Global spot rates for air cargo are on the rise, although this trend might shift as carriers implement their summer travel schedules.
• Panama Canal transits are increasing as drought conditions in the region improve, although a full recovery isn't expected until 2025. Rainfall in the area is boosting water levels on Gatun Lake, according to the Panama Canal Authority.
• Nearshoring took center stage during the recent Mexico presidential debate, with candidates proposing strategies to attract business interest in Mexico.
• Candidates discussed plans to modernize border crossings, improve legal certainty, and enhance roads and rail networks to bolster Mexico's investment appeal.
• The Biden administration introduces new guidelines for its Sustainable Aviation Fuel (SAF) subsidy program, allowing corn-based ethanol to qualify if farms adhere to climate-friendly practices, aiming to reduce US air travel industry carbon emissions, which constitute about 2% of total US carbon emissions.
• Air Canada scales back planned expansions to its freighter fleet, cancelling the addition of two Boeing 767 freighters due to declining cargo revenue, particularly in the Transatlantic market, while experiencing increased volume on Pacific lanes, maintaining its current fleet of eight freighters.
• IATA reports continued strong demand for air cargo, with total demand increasing by 10.3% compared to March 2023 levels, while capacity has increased by 7.3%.
• Willie Walsh, IATA’s Director General, attributes the performance to a global uptick in cross-border trade and industrial production, resulting in a strong first quarter.
• Port of Baltimore officials anticipate the removal of the Dali container vessel from its current position by Friday, May 10. Following removal, plans are in place to open a 13.7 meter channel, with the main channel expected to reopen by the end of the month.

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 and APM Terminals.
• Up to 2 days waiting time is expected at Port Liberty Terminal Bayonne.
• Average gate turn times: 48 minutes for single transactions, and 72 minutes for double transactions.
• Terminal change to Port Liberty New York.
• An earthquake hit New York City, New Jersey with 4.8 Magnitude on April 5, 20204.
• However, no issues were reported at Maher, Port Liberty, APMT NYC or Greenwich terminal in Philadelphia.
• All other vessels on AL6 will continue to call Maher terminals.

Norfolk:

• Currently, most vessels berth on arrival, however, the bigger vessels wait approx. 2 days for a berth.
• Average gate turn times are 30 / 43 minutes for single and double transactions respectively.
• Berth congestion had relaxed overall but it is expected to worsen after severe weather delays.
• This is mainly for ships arriving from New York later this week.

Charleston Terminal:

• Waiting time for vessel berthing is 2.5 days at Wando Welch Terminal and 0.5 days at North Charleston Terminal.
• Average truck turn times: 17  minutes at Wando Welch Terminal, and 20 minutes at North Charleston Terminal.
• Dock construction at Wando Welch terminal started on March 11, 2024.
• It is reducing berth space from 3 to 2 berths for one year.
• Berths will be given on a first come, first serve basis.
• This project will also limit the amount of class 1.1 and 1.2 that can be handled at the terminal during this time.

Savannah:

• Waiting time for vessel berth at the terminal is up to 2 days, depending on the size of the vessel.
• Frequent river closures are expected due to fog during this week.
• Average gate turn times are 35 / 55 minutes for single and double transactions respectively.
• Import dwell time is 2 days.
• Berth 2 is back online helping to reduce waiting times.

Houston:

• Barbours Cut Terminal has up to 1 day waiting time for vessel berthing. The same goes for the Bayport Container Terminal.
• Bad weather in the Gulf of Mexico continues to cause closures at ports south of Houston and delays on arrival.
• Due to vessel bunching the yard is facing congestion impacting the discharge productivity and extending port stays.
• Average gate turn times at Barbours Cut Container Terminal are 36 / 58 minutes for single and double transactions.
• The gate turn times are 37 / 57 minutes for single and double transactions at Bayport Container Terminal.
• Loaded import dwell is at 3.5 days at Barbour's Cut and 3.3 days at Bayport.

Oakland:

• Average wait time of up to 3 days at Oakland Int’l Container Terminal (OICT) and 1 day at TraPac.
• Average import deliveries can take up to 7.3 days at TraPac and 3.3 days at OICT.
• Average gate turn times are 65 / 76 minutes for OICT and TraPac respectively.
• OICT reported two cranes are non operational.
• Port of Oakland has started the bollard and fender replacement project at OICT, starting with Berth 55 through Berth 59.
• The project is expected to last into Q1 of 2025.

Seattle-Tacoma:

• 3 days waiting time at Husky, Washington United terminal at Tacoma, and Seattle.
• Import deliveries are 2.3 days at Husky – due to EB/WB railcar imbalance, 1.1 days at Washington United Terminal, and 1-3 days at T18.
• The average gate turn times are 59 minutes for T18, 55 minutes for Washington United Terminal, and 56 minutes for HUSKY.
• Terminal 18 will be closed on May 10, 17 and 24, 2024.

Los Angeles/Long Beach:

• All terminal gates are running as published and in line with the Pier Pass program.
• Port of Los Angeles dwell time for local import cargo is 2.8 days, on-dock rail dwell is 4.7 days, and import units on the street are averaging at 3.1 / 4.6 days for 20 ft and 40+ ft containers respectively.
• Port of Long Beach dwell times for local imports are stable, and the average terminal gate turn time is between 22 / 62 minutes, depending on the terminal.

Chassis Pools

All pools are operating as normal except:

• Indianapolis – 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.

Conduct thorough research on ports that offer available space and suitable equipment despite the ongoing conditions. By doing so, you can minimize complications, facilitate shipments, and maximize efficiency.

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.