Freight Market Update - December 21, 2022

From the Editor’s Desk

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Key takeaways for the US

• Port Houston will apply a dwell surcharge from January 1 onwards.

• Both East and West Coast of the USA are witnessing enhanced global situations.

• Customers need to check their shipments as some USA companies will be closed for over ten days, this is due to Christmas and New Year fast approaching.

 Read on for more in-depth updates.

Ocean Freight Market Update

Asia to North America Freight

U.S / CA 

Container Imports USA

According to Descartes Datamyne, overall 1.95 million container imports from the USA were witnessed in November.

These are conducted in 20-foot container equivalent units which is down 12% from October.

It is also 19.4% down year over year. This is a notable decline rate.

Chinese exports dropped 8.7% in November compared to a year earlier as per the Chinese “General Administration of Customs”.

This is driven by global demand and various COVID-19 disruptions.

In terms of Busan port’s inbound pilotage, strong winds have led to an intense 18-hour suspension.

This suspension continued between 13-14 December due to the unexpected nature of the strong winds.

More blank sailings will continue in January 2023 to maintain reliability in the Transpacific Lane Reliability.

Conclusions

Rates: The ocean freight rates continue to drop.

Space: Space open, no issues with equipment or space constraints.

Recommendation: We recommend blank sailings to continue. Book at least two to three weeks prior to the date your vessel is ready to depart.

 Turkey to North America Shipping

 Most ports have reduced their hours during Christmas and New Year holidays. It might pose a problem for customers as they need to stay aware of new trends.

Maersk vessels are holding VIP positions in Vancouver, they have to wait only for five to seven days at most for berthing.

CMA’s TUX service has begun and the second voyage is on sail although it is not a direct call, there are transshipments from Piraeus, La Spezia, and Algeciras, this has also led to some further delays during shipping. 

Conclusions

Rates: ONE has reduced the rates again. MSC spot rates are notably low, if not at the same market level for December. The January rates are still uncertain but may increase for January.

Space for capacity: No capacity issues and space constraints.

Space for equipment: No issues with equipment.

North America to Turkey Freight

•  As per Sea Intelligence CEO Alan Murphy, the reliability of the global schedule has improved by 6.6% points.

• This improvement is month over month in October 2022.

• It has reached 52.0% and Maersk was the most reliable carrier in October during this time.

• Maersk secured this position owing to its reliability of 56.4% followed by MSC at 52.7% reliability.

• The equipment and space problems are softening day by day in North America. It is a promising situation that gives hope to customers for the near future.

Conclusions

Rates: Stable rates over the last week.

Space for capacity: No capacity issues apart from some intermodal terminal congestions. Terminals such as Memphis are extremely congested, yet we cannot confirm any major capacity issues.

Space for equipment: Equipment issues have started in some regions due to low levels of import.

Terminal Updates

• In Savannah, the vessel waiting time is zero days for US Flagships.

• It is zero to a maximum of two days for Class 1 (Transatlantic routes and East Coast to Southeast Asia).

• It is around twelve days for Class 2 (those coming over from Mainland China via the Panama or Suez route).

• The Georgia Ports Authority positively expects a completely clear backlog by early January 2023.

• The vessel waiting time is currently two days for US Flagships and three to five days for Barbours Cut.

• It is around eight to ten days for Bayport. It is crucial for customers to monitor Houston ports for fog impacts during this season.

• The port is implementing a dwell surcharge from January 1, 2023.

• A lack of imports has resulted in some equipment deficiency. This relative export demand continues in certain locations.

• Los Angeles and Long Beach Ports will no longer implement the container dwell fee program.

• On October 25, 2021, the ports announced plans to charge $100 per container per day.

• This plan was valid and would continue for all the boxes left on the terminal for over nine days.

• The idea was to reduce record levels of congestion happening during that year and the charge was due to be implemented by November 15.

• However, the ports witnessed a significant improvement in the volume of aging cargo containers. These were those containers that were left on the docks.

• This was a result of consistent and constant postponements and a considerable volume shift from the US West Coast to the East Coast.

• This means that the fee was never implemented in the end!

US Domestic Trucking Trends

• Load To Truck Ratio (LTR) was predominant this week.

• The flatbed load posts were almost four times lower last week compared to last year’s analytics.

• Despite weekly volumes increasing by 10% w/w, this decrease was noted.

• Load posts are at their lowest level in six years.

• The flatbed carrier equipment posts remained at an all-time high level. This was the highest level recorded in six years.

• Compared to the average over the last five years, last week’s equipment post volumes were 60% higher.

• Due to this, last week’s LTR increased from 7.83 to 9.52.

• This is the lowest LTR level ever recorded for flatbeds in the last six years for this time of the year.

• In terms of spot rates, the flatbed linehaul rates increased to a national average of about $2.07/mile.

• This was following last week’s $0.03/mile gain.

• When we compare these numbers to those of last year, last week’s average spot rate is about 20% or $0.52/mile lower and $0.03/mile lower.

• This is compared to this time of year in 2018.

• To give you better context, last week’s national average is still $0.20/mile higher than in 2019.

Final Thoughts

With the given updates, we can safely conclude that the market is faring well with a sufficient supply of equipment and capacity.

It is a bit erratic in some import and export regions, but the congestion is clearing considerably in others. We advise customers to book their blank sailings weeks in advance and keep track of trends.

Due to the holiday season and year-end closing dates, several companies are changing their shipping patterns. It is advisable to plan and stay informed about how your desired port is functioning.

We can expect a steady and consistent increase in the market owing to these trends. You can gain good profits if you play wisely and choose your ports correctly. Try to find ports with good space and equipment conditions for the best results.

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