Freight market update - 19 June 2024

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• While past strikes at U.S. ports have seen shippers use airfreight to avoid shipping disruptions, strike action at East and Gulf Coast ports does offer shippers the option to use services via the U.S. West Coast.

• Strong demand and rates have brought intra-Asia carriers like SeaLead Shipping, BAL Container Line, and TS Lines back to the Trans-Pacific trade after 18 months.

• According to Drewry, China-U.S. rates are already nearing a 20-month high.

• According to the global forecast, U.S. ports handled 2.02 million TEUs in April, a 13.2% increase from last year.

• May's volume is projected to reach 2.09 million TEUs, an 8.3% year-over-year (y/y) increase and will be the highest level reached since August 2022.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Strong demand and rates have brought intra-Asia carriers like SeaLead Shipping, BAL Container Line, and TS Lines back to the Trans-Pacific trade after 18 months.
• Long-haul carriers are also launching new Asia-Americas services to capitalize on the booming market.
• U.S. retailers are forecasting strong imports through September.
• According to Drewry, China-U.S. rates are already nearing a 20-month high.
• Xeneta's chief analyst, Peter Sand, has likened the current issues of port congestion, strong demand, and tight capacity to those experienced during the pandemic.
• SeaLead has announced a new Asia West Coast service in response to "robust demand."
• BAL Container Line is restarting its China-Mexico Express and China Pacific Express services.
• Wan Hai, Cosco, OOCL, Maersk, and MSC are introducing or revamping services connecting Asia to the U.S. West Coast, South America, and Latin America markets.
• Shipping rates are reaching new heights and may soon exceed $20,000 per container on the Asia-Europe trade route.
• The rate spike is driven by limited vessel capacity, high demand, and congestion in Asia.
• The peak season started earlier than usual, in May, as the Red Sea remains closed, and shippers are worried about the longer sailing times around the Cape of Good Hope.
• According to Sea-Intelligence analysis, if the current trends persist, spot rates from Shanghai to Rotterdam could hit $18,900 per FEU, while rates from Shanghai to Genoa could reach $21,600 per FEU.
• During the pandemic, rates on the Asia-Europe route peaked just above $14,000 per container.
• Several liners plan to implement peak season surcharges starting in mid-June, which will further increase freight rates across the Trans-Pacific and Asia-Europe routes.
• The Shanghai Containerized Freight Index recently reached its highest level since August 2022.
• Drewry's World Container Index is up 12%, an 181% increase from last year.
• A market survey found that 70% of BCOs and forwarders with long-term ocean contracts have had shipments rolled, been pushed to the spot market, or are facing renegotiated contracts.
• With overall idling well below 1% of the world’s 29.90 MTEU of cellular vessel capacity, the global liner fleet can be considered ‘fully employed’.
• This near-total utilization leaves little room for flexibility, and the resulting scarcity has driven a sharp increase in charter rates, particularly for shorter-term fixtures.
• Higher-than-expected cargo volumes are placing additional strain on the supply chain, further compounded by the reemergence of congestion at several key ports.
• The ongoing diversions around the Cape of Good Hope add another layer of complexity, effectively ‘inflating’ tonnage demand.
• A Sea Intelligence model examining the global supply-demand balance predicts a peak in 2024 that could rival the disruptions seen during the pandemic.
• The current rising rates are a direct result of this sudden tightness.
• Port congestion and vessel delays exacerbate the situation, absorbing capacity that would otherwise meet the burgeoning demand.
• Currently, 6.3% of global vessel capacity is tied up in port congestion, a significant increase from the 2% typical in a normal market.
• During the height of the pandemic, this figure soared to 11.1% in 2021.
• If congestion in Asian ports remains unresolved, the market pressure in 2024 could escalate even further, with carriers expecting conditions to continue through peak season and into October.

Turkey → North America

• In the latest Global Port Tracker report, released jointly by the National Retail Federation (NRF) and Hackett Associates, NRF Vice President for Supply Chain and Customs Policy, Jonathan Gold, attributes an anticipated surge in U.S. cargo imports to higher consumer spending and retailers replenishing inventories ahead of the peak shipping season.
• Ben Hackett, founder of Hackett Associates, said the import surge is expected to surpass two million TEUs over the next seven months, which he pointed out is partially due to shifts in the traditional peak shipping season.
• “In the last couple of years, we have witnessed a flattened peak season that has stretched out the volume of imports over extra months versus the strong, consolidated surge seen in the past.”
• According to the global forecast, U.S. ports handled 2.02 million TEUs in April, a 13.2% increase from last year.
• May's volume is projected to reach 2.09 million TEUs, an 8.3% year-over-year (y/y) increase and will be the highest level reached since August 2022.
• June's growth is anticipated to increase by +15.2% y/y; July by +9.5% y/y; August by +10.6% y/y; September by +1.7% y/y, followed by a decline in October at -2.3% y/y.
• The NRF expects a total of 12.1 million TEUs in the first half of 2024, a 15% rise from the same period in 2023.
• Retail sales are projected to grow between 2.5% to 3.5% over 2023.

North America → Turkey

• Labor talks between U.S. port employers, represented by the United States Maritime Alliance (USMX), and the International Longshoremen's Association (ILA), representing dockworkers along the U.S. East and Gulf Coast ports, have come to a halt over automation disputes.
• Set against a backdrop of longer transit times and higher costs, Xeneta's chief analyst, Peter Sand, said the possibility of strike action may force importers to pull forward efforts to safeguard their ocean-based supply chains.
• This could lead to a continuous cycle of disruptions for the container freight shipping market.
• While past strikes at U.S. ports have seen shippers use airfreight to avoid shipping disruptions, strike action at East and Gulf Coast ports does offer shippers the option to use services via the U.S. West Coast.
• They can then use intermodal transport to reach their planned destinations.
• This will help relieve some of the pressure on airfreight.
• The ILA contract expires on September 30.
• The union’s leadership has previously stated that ILA members would go on strike if an agreement is not reached.

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: 43 minutes for single transactions, and 66 minutes for double transactions.

Norfolk:

• Currently, most vessels berth on arrival, however, the bigger vessels wait approx. 2 days for a berth.
• Average gate turn times are 34 / 47 minutes for single and double transactions respectively.
• Berth congestion has relaxed.

Charleston Terminal:

• Currently, there are 15 ships at anchor. Omissions from all carriers are slightly reducing the extent of delays, though delays are still expected to be up to 11 days this week, decreasing to 6-8 days next week.
• A section of berth 3 will temporarily reopen around week 26, allowing a third ship of up to 900' to work while berths 1 and 2 are occupied.
• The toe wall construction will pause around the July 4th holiday for two weeks, enabling normal operations in all three berths to clear the anchorage.
• With these measures and omissions factored in, the wait by the end of June should reduce to 4-5 days.
• By the end of July, the wait should decrease further to a maximum of 2-3 days, aligning with initial expectations solely from the construction schedule.
• Average truck turn times are 24 minutes at Wando Welch Terminal and 19 minutes at North Charleston Terminal.
• Dock construction at Wando Welch Terminal began on March 11, 2024, reducing berth space from 3 to 2 berths for one year. Berths will be allocated on a first-come, first-served basis.
• This project will also restrict handling of class 1.1 and 1.2 materials at the terminal during this period.

Savannah:

• Waiting time for vessel berth at the terminal is up to 1 day, depending on the size of the vessel.
• Average gate turn times are 38 / 55 minutes for single and double transactions respectively.
• Import dwell time is 4 days.

Houston:

• Barbours Cut Terminal has up to 1 day waiting time for vessel berthing. The same goes for the Bayport Container Terminal.
• Average gate turn times at Barbours Cut Container Terminal are 38 / 57 minutes for single and double transactions.
• The gate turn times are 34 / 54 minutes for single and double transactions at Bayport Container Terminal.
• Loaded import dwell is at 3.6 days at Barbour's Cut and 3.5 days at Bayport.

Oakland:

• Average wait time of up to 1 day at Oakland Int’l Container Terminal (OICT) and 2 days at TraPac.
• Average import deliveries can take up to 5 days at TraPac and 3.2 days at OICT.
• Average gate turn times are 90 / 75 minutes for OICT and TraPac respectively.
• 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:

• 2 days waiting time at Husky, and 4 days at Washington United terminal at Tacoma. No waiting time in Seattle.
• Import deliveries are 3.7 days at Husky, 4.5 days at Washington United Terminal, and 1-3 days at T18.
• Railcar supply is in severe deficit over the next couple of weeks in Tacoma.
• The average gate turn times are 27 minutes for T18, 30 minutes for Washington United Terminal, and 96 minutes for HUSKY.
• Terminal 18 will be closed on June 19 and 28, 2024.
• Washington United Terminals and Husky will also be closed on June 19, 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 2.9 days, on-dock rail dwell is 4.7 days, and import units on the street are averaging at 3.4 / 4.7 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 21 / 89 minutes, depending on the terminal.

Chassis Pools

All pools are operating as normal except:

• Chicago – Constrained on 40’ chassis.
• Cleveland – Deficit on 20’ and 40’ chassis
• Columbus - Deficit 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, 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.

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.