Freight market update - 19 December 2024

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• Negotiations between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX) remain unresolved.

• Direct import and export services through Los Angeles and Montreal provide options to bypass East and Gulf Coast disruptions.

• Ocean freight rates are 117.6 points higher than January levels, with no expectation of returning to pre-crisis levels soon.

• Global container volumes grew 8.3% year-on-year in Q3, with North American demand surging by 18.2%.

• Extreme factors, such as EU and U.S. tariffs on Asian imports, make air freight rate trends unpredictable over the medium to long term.

• Global trade is projected to reach a record $33 trillion, reflecting a 3.3% increase from 2023, according to UNCTAD.

• The Transpacific (TP) trade has experienced a 4.2% year-on-year increase in container fleet capacity.

• MSC will launch its standalone East-West network, ‘Mustang,’ in 2025.

• The threat of strikes at Indian ports has subsided after a wage and pension contract agreement was officially approved.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• The Transpacific (TP) trade has experienced a 4.2% year-on-year increase in container fleet capacity.
• The threat of strikes at Indian ports has subsided after a wage and pension contract agreement was officially approved.
• This resolution alleviates concerns about disruptions to cargo flow from major ports in the region.
• Adverse weather and congestion continue to impact schedules at Colombo, a key transshipment hub.
• Carriers are preparing for an anticipated rise in demand in early January as the traditional peak season begins.
• Shippers are encouraged to confirm bookings early to mitigate potential space constraints.

MSC Mustang

• MSC will launch its standalone East-West network, ‘Mustang,’ in 2025.

The network will connect key hubs, including:

• Xiamen
• Ningbo
• Shanghai
• Busan
• Seattle
• Vancouver
• Portland

Expanded TP7/WC5 Loop by Maersk and HPL

• In September, Maersk and HPL announced the introduction of an additional TP7/WC5 loop.
• The expanded service coverage now includes:
• Busan
• Ningbo
• Los Angeles (LA)
• Yokohama

Global Trade Surge

• Global trade is projected to reach a record $33 trillion, reflecting a 3.3% increase from 2023, according to UNCTAD.

The growth includes:

• A 7% rise in trade in services, contributing an additional $500 billion.
• A 2% increase in trade in goods, which remains below its 2022 peak.

Outlook for 2025

• UNCTAD warns of uncertainties heading into 2025, including escalating trade wars and geopolitical tensions.
• There are also some foreseen potential shifts in U.S. trade policy, such as the imposition of broader tariffs.
• These factors could disrupt global value chains and impact key trading relationships.

Countries at Risk

• Nations with large trade surpluses with the U.S. face heightened risks, including:
• China (approximately $280 billion surplus).
• European Union ($205 billion surplus).
• Vietnam ($105 billion surplus).
• India ($45 billion surplus).

Turkey → North America

• Ocean and air freight rates have risen significantly in 2024 due to unpredictable market dynamics, according to Transport Intelligence (Ti).
• Ocean freight rates are 117.6 points higher than January levels, with no expectation of returning to pre-crisis levels soon.
• Peter Sand, Xeneta’s chief analyst, identified ocean carriers as 2024’s “financial winners,” transitioning from losses to record-high rates.
• Ocean freight rates are expected to rise slightly in Q4 as the market stabilizes.
• Global headhaul rates in November dropped -5.6 points from October due to improved supply chain dynamics.
• A 4.9% increase in global shipping capacity during Q3 influenced the decline in rates.
• Low vessel scrap pages and high new deliveries indicate liners are anticipating strong future demand.
• Global container volumes grew 8.3% year-on-year in Q3, with North American demand surging by 18.2%.
• European markets remain weak due to ongoing economic challenges.
• Airfreight has been described as “a beneficiary of uncertainty,” with global air rates consistently rising.

Global headhaul rates increased by:

• 5.9% month-to-month
• 8.8% quarter-to-quarter
• 4.6% year-over-year

Backhaul routes showed more modest growth:

• 3.7% month-to-month
• 2.7% quarter-to-quarter
• A decline of -3.2% year-over-year.

Market Stability Predictions

• Ti warns that despite strong growth in air freight rates, market stability is not guaranteed.
• Extreme factors, such as EU and U.S. tariffs on Asian imports, make air freight rate trends unpredictable over the medium to long term.
• Ti’s Market Sentiment Index suggests air freight rates will edge higher in the coming months.

North America → Turkey

• Negotiations between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX) remain unresolved.
• The current master contract extension is set to expire on January 15, 2025.
• A murky stance on automation has created ambiguity for negotiators.
• Concerns about outdated U.S. infrastructure further complicate the negotiations.
• Infrastructure modernization could emerge as a significant bargaining point in discussions.
• A strike could disrupt cargo flows through major East Coast gateways.
• As of now, there are no signs of shippers or carriers front-loading cargo in anticipation of potential disruptions.
• Key U.S. East and Gulf Coast ports could face another strike if an agreement is not reached.
• Limited media coverage of these negotiations makes it essential for shippers and forwarders to proactively plan.
• Considering alternative routes is advisable to mitigate potential disruptions.
• A strike would disrupt operations at key East Coast and Gulf Coast ports.
• Major hubs potentially affected include New York/New Jersey, Savannah, Charleston, Houston, Miami, and Port Everglades.
• If the strike occurs, expect higher demand, congestion, and costs at alternative ports, particularly on the West Coast and in Canada.
• Possible sympathetic actions from fellow labor unions at non-striking ports could worsen disruptions.
• Extended delays are likely as alternative ports struggle to handle overflow cargo.

Short-Term Strike (1-2 days)

• Port congestion and delays may take 5-7 days to clear.
• Costs and logistical challenges would be minimal unless carriers declare force majeure, rerouting containers to foreign ports.

Extended Strike (1-2 weeks)

• Severe congestion would overwhelm ports, Container Freight Station (CFS) facilities, and strain transportation networks, including trucking and rail.
• Higher costs and delays would impact the entire supply chain.
• Direct import and export services through Los Angeles and Montreal provide options to bypass East and Gulf Coast disruptions.
• These services help ensure supply chain continuity.
• Dedicated import and export intermodal solutions offer single-source management with end-to-end control and visibility.
• Decisions to reroute cargo should consider transit times, costs, and specific shipping requirements.
• While these services may not be optimal under normal circumstances, they provide practical solutions to navigate challenges posed by labor strikes.

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 40 / 68 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 2.3 days this week.
• Average gate turn times are 36 minutes for single transactions and 56 minutes for double transactions.
• One crane is out of service.
• However, it is expected to be back working next month.

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 1.5 days for class 1 vessels and 2.9 days for class 2.
• Average gate turn times are 38 minutes for single transactions and 53 minutes for double transactions.
• Import dwell time is 3.8 days.
• Export dwell time is 6.0 days.
• Rail dwell time is 1.3 days.

Houston:

• 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 39 minutes for single transactions and 59 minutes for double transactions.
• Average gate turn times at Bayport Container Terminal are 30 minutes for single transactions and 46 minutes for double transactions.
• Loaded import dwell is 3.6 days at Barbours Cut and 3.5 days at Bayport.

Oakland:

• No waiting time for Oakland Int’l Container Terminal (OICT) and 2 days waiting time at TraPac.
• Average import deliveries can take up to 6 days at TraPac and 3.5 days at OICT.
• Average gate turn times are 78 minutes at OICT and 91 minutes at TraPac.
• The Port of Oakland has started a bollard and fender replacement project at OICT.
• The project is now expected to finish at the end of Q4 2024.
• So far, berths 55, 56 and 57 are complete.
• The work has now moved to Berth 58.

Seattle-Tacoma:

• 5 says waiting time for time at Husky and 1 day at Washington United terminal at Tacoma.
• No waiting time in Seattle.
• Import rail dwell are 4 days at Husky, 3 days at Washington United Terminal, and 1 to 3 days at T18.
• The average gate turn times are as follows: 26 minutes for T18, 28 minutes for Washington United Terminal, and 72 minutes for Husky.
• T18 will be closed on December 12,13 and 24, 2024.
• All terminals will be closed on December 25, 2024.

Los Angeles/Long Beach:

• Port of Los Angeles dwell time for local import cargo is 3.2 days.
• On-dock rail dwell is 4.7 days.
• Import units on the street are averaging at 4.9 / 7.3 days for 20 ft and 40+ ft containers respectively.

Chassis Pools

All pools are operating as normal except:

• Minneapolis / St. Paul - Constrained on 20’ and 40’ chassis.
• Chicago – Constrained on 20’ and 40’ chassis.
• St. Louis - 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.