Freight market update - 21 August 2024

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• The recent explosion on the Yang Ming vessel YM Mobility at Ningbo Port, China, has raised serious concerns about disruptions to global supply chains, especially on major trade routes from Asia.

• Hapag-Lloyd CEO Rolf Habben Jansen has raised concerns about the increasing likelihood of a longshore strike that could shut down ports along the U.S. East and Gulf coasts, noting that the risk has grown since earlier in the year.

• The potential strike is centered around the expiration of the current contract between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) on September 30.

• U.S. retailers are not expecting a slowdown in imports for the second half of 2024, driven by a near-record surge in August as they fast-track shipments ahead of potential longshore labor strikes at East and Gulf Coast ports.

• According to Sea Intelligence, June saw a significant increase in global container demand, with volumes growing by 6.3% year-on-year.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• The recent explosion on the Yang Ming vessel YM Mobility at Ningbo Port, China, has raised serious concerns about disruptions to global supply chains, especially on major trade routes from Asia.
• On August 9, a container carrying hazardous organic peroxide materials exploded while the vessel was docked at Ningbo Beilun’s Phase III Terminal.
• The terminal has been closed indefinitely as a result, worsening existing regional challenges, including the recent disruptions caused by Typhoon Gaemi.
• The explosion involved a refrigerated container, which was being used as a substitute for a dry container without requiring a power connection, although the exact cause of the explosion is still under investigation.
• Container xChange, a marketplace for container trading and leasing, cautions that the closure of Ningbo Port, one of the world’s busiest terminals, will intensify current delays and put further strain on global supply chains.
• According to Sea Intelligence, June saw a significant increase in global container demand, with volumes growing by 6.3% year-on-year.
• This growth was particularly robust in the Transpacific trade, where volumes surged by 18%, just slightly below the record set in May 2024.
• The demand spike was driven by strong head-haul growth in deep-sea trades, which are essential for absorbing vessel capacity.
• Rates are expected to rise in the second half of August, with an anticipated General Rate Increase (GRI) for both East and West Coast routes.
• Congestion has improved slightly at most major ports.

Turkey → North America

• U.S. retailers are not expecting a slowdown in imports for the second half of 2024, driven by a near-record surge in August as they fast-track shipments ahead of potential longshore labor strikes at East and Gulf Coast ports.
• Despite earlier predictions that imports would taper off due to front-loading of cargo earlier this year, the National Retail Federation (NRF) and Hackett Associates have upgraded their forecasts.
• They are now expecting monthly year-over-year increases in imports through the end of the year.
• August imports are forecasted to rise by 19.2%, with further gains anticipated in September and October.
• Concerns over labor disputes, including the International Longshoremen’s Association (ILA) seeking an 80% wage increase over a six-year contract, have led to shifts in shipping routes and early deliveries.
• The ILA has issued a 60-day strike notice ahead of the September 30 expiration of its current contract.
• U.S. imports from Asia have seen year-over-year growth since October 2023, with elevated import levels expected to continue through Lunar New Year 2025, as factories in Asia will close for holiday celebrations.
• U.S. ports are preparing for the potential fallout from industrial action by the International Longshoremen’s Association (ILA).
• The ILA, representing dockworkers along the U.S. East and Gulf Coasts, has been ramping up preparations for what could be a significant disruption to port operations.
• This disruption is due to ongoing negotiations with the United States Maritime Alliance (USMX) over a new labor contract.
• Key issues at stake include wage increases, job security, and automation—a contentious point as ports and shipping companies push for more automated systems to improve efficiency and reduce costs.
• If the industrial action proceeds, it would directly affect major ports such as New York/New Jersey, Savannah, Charleston, and Houston, impacting a significant portion of the country’s containerized cargo and worsening existing congestion and delays.

North America → Turkey

• Hapag-Lloyd CEO Rolf Habben Jansen has raised concerns about the increasing likelihood of a longshore strike that could shut down ports along the U.S. East and Gulf coasts, noting that the risk has grown since earlier in the year.
• Shippers have already begun front loading cargo in anticipation of possible disruptions.
• The potential strike is centered around the expiration of the current contract between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) on September 30.
• While Maersk expects longshore workers to continue working past the expiration date, the ILA leadership has maintained that no contract extension will be granted.
• This uncertainty has led to a rise in U.S. cargo volumes since May, as businesses prepare for potential delays.
• Negotiations between the ILA and USMX have stalled, particularly over wage demands, with the ILA seeking a 76% increase over six years.
• The USMX has offered what it describes as an "industry-leading" wage proposal, but the two sides remain far apart.
• Maersk CEO Vincent Clerc believes a strike is unlikely and that an extension may be reached, although any shutdown could cause weeks of delays in restoring regular cargo operations.
• ILA President Harold Daggett has urged union members to prepare for a strike starting October 1 if a deal is not finalized, citing strong carrier profits as justification for the wage demands.
• As tensions rise, Hapag-Lloyd reported a decline in profits, attributing last year’s higher earnings to an unusual market environment.

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 days waiting time is expected for a berth at Maher Terminals LLC and 1 day at APM Terminals.
• Waiting time of up to 4 days is expected at Port Liberty Terminal Bayonne.
• Average gate turn times are 50 minutes for single transactions and 81 minutes for double transactions.

Norfolk:

• Currently, most vessels berth on arrival.
• Bigger vessels wait approximately 2.5 days for a berth.
• Average gate turn times are 32 minutes for single transactions and 44 minutes for double transactions.

Charleston Terminal:

• 3 days waiting time for Wando Welch Terminal and 0.5 days for North Charleston Terminal.
• Average truck turn times are 17 minutes at Wando Welch Terminal and 19 minutes at North Charleston Terminal.
• Dock construction at Wando Welch Terminal started on March 11, 2024, reducing berth space from 3 to 2 berths for one year.

Savannah:

• The waiting time for a vessel berth at the terminal is up to 3 days, depending on the vessel's size.
• Average gate turn times are 34 minutes for single transactions and 56 minutes for double transactions.
• Import dwell time is 2.5 days.

Houston:

• There is up to a 2 days waiting time for vessel berthing at Barbours Cut Terminal and 2 days at Bayport Container Terminal.
• Average gate turn times at Barbours Cut Container Terminal are 34 minutes for single transactions and 54 minutes for double transactions.
• Average gate turn times at Bayport Container Terminal are 31 minutes for single transactions and 52 minutes for double transactions.
• Loaded import dwell is 3.9 days at Barbours Cut and 3.7 days at Bayport.

Oakland:

• No waiting time at Oakland Int’l Container Terminal (OICT) and at TraPac.
• Average import deliveries can take up to 5.1 days at TraPac.
• Average import deliveries can take 3.2 days at OICT.
• Average gate turn times are 90 minutes at OICT and 86 minutes at TraPac.
• Port of Oakland has started a bollard and fender replacement project at OICT.
• It is starting with Berth 55 through Berth 59.
• The project is expected to last into Q1 2025.
• Berth 55 is complete, the team has moved to Berth 56.

Seattle-Tacoma:

• There is a 13 day waiting time at Husky Terminal and 8 days at Washington United Terminal in Tacoma.
• There is a 5 day waiting time in Seattle.
• Import rail dwell times are 5.8 days at Husky Terminal.
• Import rail dwell times are 9.6 days at Washington United Terminal but some places see up to 14 days.
• Import rail dwell times are 1-3 days at Terminal 18 (T18).
• Average gate turn times are 36 minutes at T18.
• Average gate turn times are 29 minutes at Washington United Terminal.
• Average gate turn times are 65 minutes at Husky Terminal.
• Washington United Terminal and Husky are limiting their operations to a single berth until further notice due to a shortage of rail cars needed to evacuate imports.
• They are also delaying the startup of operations on vessels and skipping shifts if necessary for the same reason.
• T18 will now be open on August 16, 23, and 30, 2024.
• Husky Terminal will operate hoot gates on August 20, 21, and 22, 2024.
• Effective Monday, July 15, Washington United Terminal will accept empty reefers and other specialty equipment on single transactions.
• All other empty containers will only be accepted on dual transactions, and appointments are required.
• Husky Terminal will only accept dual transactions for empty receiving, effective July 22.
• Seaspan Benefactor, YM Moderation, YM Trillion, and Conti Contessa are making ad hoc calls to Seattle T18 for load and discharge operations to help alleviate the import rail situation in Tacoma.

Los Angeles/Long Beach:

• Port of Los Angeles dwell time for local import cargo is 3.2 days.
• On-dock rail dwell time at Port of Los Angeles is 6.9 days.
• Import units on the street at Port of Los Angeles are averaging 3.8 days for 20 ft containers and 5.7 days for 40+ ft containers.
• The number of arrivals during July is expected to be 29 arrivals above normal.
• Average terminal gate turn time at Port of Long Beach is between 23 and 64 minutes, depending on the terminal.

Chassis Pools

All pools are operating as normal except:

• Chicago - Constrained on 20, 40’ and 45’ chassis.
• Indianapolis - Constrained on 20’ chassis.
• Louisville - Constrained 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.