Freight Market Update - October 20, 2022

Ocean Rates and Trends for US Market | October 20, 2022

Weekly updates on ocean freight market trends, especially focusing on ocean freight rates for the U.S., China, and Turkey. Additionally, stay informed about the latest in trucking, customs, warehousing, fulfillment, and e-commerce news for these markets.

Editor’s note: 

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Highlights for US

• As a result of Hurricane Ian passing though Florida and the Carolinas last week which caused some port and warehouse closures, please expect additional delays in the Southeast area in the next couple of weeks.

• COVID-19 sequels, labor shortage, labor strikes at ports and rail companies, along with hurricane season and strong demand still impact the global supply chain. Lead times remain extended.

Ocean Freight Market Update

Asia → North America (TPEB)

U.S: Decreasing in demands & increasing in capacity in TP, insight in the freight market is rate decline will proceed and market could fall 2019 level earlier than expected. In additionally, decreasing in demand is bringing the service cuts/adjustments and blank sailings together. If instability in freight rates will remain same, there will be more service cancellations/adjustments to balance volume & profitability by ocean carrier players as MSC did for East Cost & Gulf services ( sliding schedules at least 1 week during 46,47 and 48 weeks). 

Canada: Market and rate conditions are similar to the U.S. Vancouver and Prince Rupert both saw a deterioration in the vessel count and berthing delays, with an improvement in rail backlog compared to last week. 

Rates: HMM & YML announced GRI and other Cosco and ONE expected to announce GRI. 

Space: Open. Capacity/Equipment: Open.

Recommendation: Book at least 2 weeks prior to cargo ready date (CRD) and keep in mind upcoming blank sailings.

Turkey → North America (TAWB) 

Capacity is increasing. As from this week capacity to the U.S. East Coast (USEC) increases with new bigger vessels entering the market. Full deployment is expected by mid-November.

Comparing the current market situation with last year, at end of the 2022 Turkey is facing with increasing on manufacturing cost and this is affecting the shipping market. On the other hand, China is becoming the better option again for US importers with lower manufacturing cost and lower ocean freight.

Rates: Indexes show that rates are dropping, but not as rapidly as on other trades. Most Q4 Freight All Kinds (FAK) rates are an extension of Q3 rates.

Space: Still very tight on the USEC with some space open for direct routing to the U.S. West Coast (USWC). Space is becoming available out of Turkey.

Capacity/Equipment: Equipment availability remains the biggest challenge for all EU origins, particularly in the Mediterranean region. Low empty stacks at inland depots, prioritize pick up from the Port of Loading.

North America → Turkey

All carriers continue their booking stop for shipments to Ukraine, Russia, and Belarus.

Rates: Showing stability at their current market price, week over week. 

Capacity/Equipment: Savannah and New York has irregular challenges & congestion. Due to high demand, Houston has very tight capacity.

Chicago remains the most reliable for loading at IPI. Kansas City and Memphis are seeing congestion related to equipment and chassis challenges.

Recommendation: Please place bookings 3 to 4 weeks in advance for East or Gulf Coast sailings and 6 weeks for Pacific.

Intermodal Market Update

Terminal Updates

Due to increased volume and labor shortage, most terminals are experiencing congestion issues, including New York, Savannah, Miami, Houston, and Oakland. 

LA/LB is largely improving, though still congested with imports. 

Ports in Florida and elsewhere in the South East have been greatly impacted by Hurricane Ian. Tampa and Jacksonville were closed at the end of September. Closings or limited operations occurred in Miami, Savannah, and Charleston.

Congestion continues at Canadian ports and rail ramps. Yard utilization at Vancouver and Prince Rupert is >95%. Import rail dwell in Vancouver is over 7 days, and over 14 in Prince Rupert.

Equipment Availability

There are continuous chassis shortages in Los Angeles/Long Beach, New York, Philadelphia, St. Louis, Columbus, Cleveland, Chicago, Memphis, Atlanta, Nashville, and Louisville. 

Equipment availability remains an issue at Atlanta, Chicago, Cincinnati, Columbus, Detroit, Kansas City, Minneapolis, Memphis, Nashville, Omaha, St. Louis, South Florida, and Seattle. 

Trucking capacity is reduced in most areas in the USA, resulting in additional delays for picking and delivering cargo

Trucking Market Update

Hurricane Ian affected trucking capacity, road infrastructure, and port operations throughout the Southeast region.

In the USA trucking market, volumes have witnessed a decline since early March 8. Specifically, the spot market truck load rates, which represents the carrier pool our truck broker operation utilizes, have been on a downward trend from Feb 2022 through Oct 2022. Despite this, the fuel surcharge remains volatile, currently hovering around $5.39 per gallon, accounting for 51-55% of the existing truck load costs. Typically, this period should be the peak season for trucking firms. However, the current scenario presents a softer market landscape. It is unlikely that we'll see an upward shift in conditions for the trucking industry before the second quarter of 2023. In line with the USA trucking market trends for 2022-2023, the upcoming first quarter promises to be challenging for numerous trucking carriers. Moreover, for those interested in a broader scope, it's essential to keep an eye on the ocean freight market updates.