Freight market update - 20 September 2023

From the Editor’s Desk

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Key takeaways for the US

• U.S. ports imported 2,196,268 twenty-foot equivalent units (TEU) in August.
• The Port of Los Angeles experienced its first monthly year-over-year increase in 13 months in August.
• Carriers have increased the number of blank sailings in preparation for the approaching Golden Week holiday.
• The Vietnamese government has given the green light to a $1.7 billion plan for the development of inland container depots (ICD).
• During the first half of 2023, major container ports in both Europe and the United States faced substantial declines in throughput, with decreases ranging from 5% to 25%.

Read on for more in-depth updates.
 

Ocean Freight Market Updates

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Descartes reported that U.S. ports imported 2,196,268 twenty-foot equivalent units (TEU) in August.
• This figure was an increase of 0.4% compared to July and a 5.5% increase compared to June.
• August's import volumes were also 2.5% higher than those recorded in August 2019, before the COVID-19 pandemic.
• Chris Jones, executive vice president of industry and services at Descartes Systems Group, mentioned in the monthly import report that August imports resembled the typical rise seen during peak seasons in non-pandemic years.
• He also observed that U.S. import volumes remained consistent with the results from 2019.
• The Global Port Tracker report, published by the National Retail Federation (NRF) and consultancy Hackett Associates, revealed that August saw a 5% increase in imports compared to July.
• The report predicts that total imports will surpass 2 million TEUs per month for three consecutive months, from August through October.
• Jonathan Gold, NRF vice president for supply chain and customs policy, expressed optimism about these numbers, indicating that retailers are importing goods they believe they can sell for the upcoming holiday season.
• According to Global Port Tracker's projections, the ports it covers are expected to handle 22.3 million TEUs in full-year 2023, representing a 2% increase compared to 2018 and a 3% increase compared to 2019, pre-pandemic levels.
• Carriers have increased the number of blank sailings in preparation for the approaching Golden Week holiday.
• Specifically, 29 blank sailings have been added on the Trans-Pacific route, and an additional 18 on the Asia-Europe route.
• The Golden Week holiday, which occurs in early October, typically sees a slowdown in manufacturing activity, as factories close, leading to reduced demand for container shipping to and from Asia.

An analyst's report indicates significant scheduled capacity reductions on various shipping routes:

1. Asia-North America West Coast: Capacity reductions have risen from 3.7% to 14.1%.
2. Asia-North America East Coast: Capacity reductions have increased from 2.2% to 16.1%.
3. Asia-North Europe: Capacity reductions have gone up from 6.8% to 19.9%.
4. Asia-Mediterranean: Capacity reductions have seen an increase from 7.7% to 21%.

• The Vietnamese government has given the green light to a $1.7 billion plan for the development of inland container depots (ICD).
• The ICD development plan is set to be completed by 2030 and is expected to significantly enhance Vietnam's logistics infrastructure.
• The overall capacity of the Vietnamese depot system is projected to range from 11.9 million to 17.1 million twenty-foot equivalent units (TEUs) annually.
• Deputy Prime Minister Tran Hong Ha approved this plan with the goals of meeting transportation demands for imports and exports, reducing logistics expenses, shortening cargo storage durations at ports, enhancing port handling capacity, and ensuring cargo safety.
• The plan anticipates that by 2030, ICDs in Vietnam will have the capacity to handle 17.1 million TEUs annually, addressing approximately 25% to 35% of the demand for export and import container shipping.
• Vietnam has experienced substantial growth as a result of the "China-plus-one" strategy, capturing 10% of manufacturing activities due to its favorable business environment and cost-effectiveness.

Conclusions

Rates - The rates will remain soft on most origin-destination combinations.

Space - Space open, no issues with equipment.

Recommendations - We recommend blank sailings to continue. Book at least two weeks before the date your vessel gets ready to depart.
 

Turkey → North America

• The Port of Los Angeles experienced its first monthly year-over-year increase in 13 months in August.
• Cargo volumes at the port grew by 3% compared to the same month the previous year.
• Loaded imports saw a notable increase of 7%, while loaded exports surged by 22%.
• Conversely, the number of empty containers declined by 10% during this period.
• Gene Seroka, the executive director of the Port of Los Angeles, described August as a strong month for the port, with growth evident in both import and export activities.
• He also noted that global trade has shown signs of easing throughout the year, a trend expected to continue in the coming months.
• Seroka highlighted the significance of the recent ratification of a six-year contract between the International Longshore and Warehouse Union and the Pacific Maritime Association.
• He emphasized that this contract, in effect through 2028, provides stability and confidence for customers, ensuring the uninterrupted flow of cargo through the nation's busiest port.

Conclusions

Rates - The rates will remain soft on most origin-destination combinations.

Space for capacity - No capacity issues or issues with space.

Space for equipment - No issues with equipment.
 

North America → Turkey

• During the first half of 2023, major container ports in both Europe and the United States faced substantial declines in throughput, with decreases ranging from 5% to 25%.
• The impacted ports included Los Angeles/Long Beach, New York/New Jersey, Savannah, Rotterdam, Antwerp-Bruges, and Hamburg.
• These declines were primarily linked to the economic slowdown taking place in Western countries.
• Los Angeles/Long Beach, for instance, experienced a sharp 25% reduction in volume, resulting in a net loss of 2.6 million twenty-foot equivalent units (TEUs) compared to the same period in 2022.
• The recent ratification of a new labor agreement for US West Coast dockworkers is expected to potentially assist Los Angeles/Long Beach in recovering some of its lost business to East Coast ports.
• Meanwhile, US East Coast ports such as New York/New Jersey and Savannah also reported significant declines of 24% and 18%, respectively, during this period.
• According to data from Sea-Intelligence, the inventory trends in the United States show a decrease in wholesalers' inventories, an increase in retailers' inventories, and relatively stable inventories for manufacturers.
• This information is based on data from July 2023 provided by the US Census Bureau.
• Overall, the total level of inventories in the United States has remained relatively consistent since the beginning of 2023, indicating the absence of a significant inventory correction.
• The juxtaposition of rising retailer inventories and declining wholesaler inventories suggests that wholesalers may be effectively managing their inventory, which could potentially lead to a decrease in imports by retailers.
• In contrast, both wholesalers and manufacturers currently maintain inventory levels significantly higher than what pre-pandemic trends would have indicated.
• These observations point to the absence of a substantial inventory correction in the United States, and there may be indications of an impending market contraction, particularly affecting wholesalers and manufacturers.

Conclusions

Rates - Stable rates over the last week.

Space for capacity - No major capacity or space issue.

Space for equipment - Equipment issues have started owing to low levels of import.

 

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 Global Container Terminals Bayonne and APM Terminals.
• No more waiting time at Maher Terminals LLC.
• Average gate turn times: 45 minutes for single transactions, and 70 minutes for double transactions.

 

Norfolk:

• Berth for large vessels is congested due to previous multi-day periods of severe weather.
• Vessels are waiting for 2 days for a berth.
• Average gate turn times are 30 / 43 minutes for single and double transactions respectively.
• One crane is out of service.

 

Charleston Terminal:

• 1 day waiting time for vessel berthing at Wando Welch Terminal.
• 0.5 days waiting time expected at North Charleston Terminal.
• Average truck turn times: 21 minutes at Wando Welch Terminal, and 17 minutes at North Charleston Terminal.

 

Savannah:

• Waiting time for vessel berth at the terminal is up to 4 days, depending on the size of the vessel.
• Average gate turn times are 36 / 52 minutes for single and double transactions respectively.

 

Houston:

• Barbours Cut Terminal has up to 1 day waiting time for vessel berthing.
• Due to vessel bunching the yard is facing congestion impacting the discharge productivity and extending port stays.
• The average gate turn time is 42 minutes.

 

Oakland:

• Average wait time of up to 2 days at Oakland Int’l Container Terminal (OICT) and up to 3 days at TraPac.
• Average import deliveries can take up to 5.3 days at TraPac and 4 days at OICT.
• Average gate turn times are 52 / 65 minutes for OICT and TraPac respectively.

 

Seattle-Tacoma:

• Wait time of up to 3 days at Tacoma and 3 days at Seattle.
• Import deliveries are 3.4 days at HUSKY – due to EB/WB railcar imbalance, 3-5 days at Washington United Terminal, and 1-3 days at T18.
• Availability of rail cars in Union Pacific Rail and BNSF Rail continues to fluctuate weekly.
• Average gate turn times are 27 / 33 / 42 minutes for T18, Washington United Terminal, and HUSKY respectively.
• T18 will be closed on September 22 and 29, 2023.
• Husky will have Saturday gates on September 16, 2023.
• WUT has received 2 new Post Panamax Cranes.
• WUT has commenced commissioning both, operational by the mid/end of September.

 

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 3.3 days, on-dock rail dwell is 4.5 days, and import units on the street are averaging at 4.3 /5.5 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 23-70 minutes, depending on the terminal.

 

Chassis Pools: All pools are operating as normal except:

1. Minneapolis / St. Paul – Constrained on 20’, Deficit on 40’ and 45’ chassis.

2. Chicago – Constrained on 20’ and 40’ chassis.

3. El Paso – 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

Range	Port	Vessels at Anchor	Vs Last Week	Waiting Time	Vs Last Week
PNW	Vancouver	0	-	0	-
PNW	Seattle	0	-	0	-
PSW	Oakland	0	-	1	-
PSW	LA/LB	0	-	0	-
USEC	New York	0	-	0	-
USEC	Norfolk	3	-	1	-
USEC	Charleston	0	-	0	-
USEC	Savannah	14	-	3	-1
USGC	Miami	0	-	0	-
USGC	Houston	2	-6	4	-1

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.