Freight market update - 24 April 2024

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• Tensions in the Middle East are on the rise.

• The MSC Aries was seized in the Hormuz Strait last week, contributing to the escalation. Resolution of the conflict doesn't seem likely in the near future.

• Starting May 8th, HMM will introduce an additional Vietnam – China – Taiwan – US West Coast service, replacing WHL’s standalone Asia – US West Coast AA3 service.

• Hong Kong has dropped out of the top 10 container ports globally according to a new report by Alphaliner.

• Europe's largest ports, including Rotterdam, Antwerp-Bruges, and Hamburg, fell in rankings due to the loss of Russian container volumes.

• Shanghai maintained its position as the top port globally, widening its lead by 10 million TEUs over Singapore.

• The Port of Los Angeles saw a 19% year-over-year increase in container units handled in March, marking eight consecutive months of growth.

• The National Retail Federation forecasts a significant increase in U.S. container imports for the first half of 2024, expected to reach 11.7 million TEUs, an 11% rise from last year.

• U.S.-based companies are increasingly focused on mastering cross-border trade within North America, driven by supply chain disruptions, rising production costs globally, and a push to manufacture closer to primary markets.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Tensions in the Middle East are on the rise.
• The MSC Aries was seized in the Hormuz Strait last week, contributing to the escalation.
• Resolution of the conflict doesn't seem likely in the near future.
• The Hormuz Strait is crucial for ships heading to Dubai, a key port since the Red Sea Crisis.
• It's also vital for oil transportation, meaning any escalation could impact oil prices immediately.
• Geopolitical events are now influencing shipping rates more than supply and demand.
• Carriers are anticipating an early peak season, leading to higher rates in the coming weeks.
• Vessel utilization is high, and there are significant bookings for cargo like white goods, solar panels, electric vehicles, and garden furniture.
• Rates for the second half of April have remained largely unchanged.
• There's been a slight decrease in rates to main US East Coast Ports despite increased volumes due to the closure of the Port of Baltimore.
• Space is becoming scarce as long term contracts are ending.
• Starting May 8th, HMM will introduce an additional Vietnam – China – Taiwan – US West Coast service, replacing WHL’s standalone Asia – US West Coast AA3 service.
• The new service will include Hai Phong Port as an additional port and two larger ships by ONE.
• Air freight from Central China to the USA:
• From SHA to the USA, space is limited and rates are higher, with space nearly full until midweek.
• Rates from NGB to the USA are increasing this week.
• North China to USA air freight market:
• Korean Airlines rates from TSN to the USA have increased and are fluctuating.
• Asiana Airlines are confirming rates case by case.
• Japan Airlines requires 10 days advance booking and the market is tighter compared to last week.
• Rates from DLC/PEK to the USA have increased with most airlines this week.
• South China to USA air freight:
• From CAN to the USA, space will tighten due to China's Labour Day holiday on May 1st.
• From SZX to the USA, carriers have increased rates as space tightens before the Labour Day holiday.
• Rates from XMN to the USA are stable, but may increase over the weekend.
• Hong Kong has dropped out of the top 10 container ports globally according to a new report by Alphaliner.
• The port has experienced seven consecutive years of volume decline and lost a third of its container traffic over the past decade.
• In 2023, Hong Kong's container traffic dropped by 14.1% to 14.3 million TEUs, causing it to slip to 11th place, behind Dubai.
• New York/New Jersey saw the most significant throughput drop, declining by 17.7% to 7.8 million TEUs.
• U.S. ports like Los Angeles, Long Beach, and Savannah also experienced double-digit percentage declines compared to the previous year, although their volumes remained above 2019 levels.
• Two new ports, China's Qinzhou and Vietnam's Cai Mep, entered the top 30 rankings.
• Europe's largest ports, including Rotterdam, Antwerp-Bruges, and Hamburg, fell in rankings due to the loss of Russian container volumes.
• India's Mundra became the Subcontinent’s largest container port.
• Morocco's Tanger Med emerged as the second-fastest grower among the top 30 ports, with a growth rate of 13.4%, but it's nearing capacity.
• Shanghai maintained its position as the top port globally, widening its lead by 10 million TEUs over Singapore.
• The top ten largest global container ports in 2023 are led by Shanghai, followed by Singapore, Ningbo-Zhoushan, Qingdao, Shenzhen, Guangzhou, Busan, Tianjin, and Los Angeles/Long Beach, with Dubai/Jebel Ali rounding out the list.
• Singapore has been voted the top global maritime hub, solidifying its position as the premier maritime center worldwide.
• Rotterdam and London follow closely in second and third place, with Shanghai and Oslo rounding out the top five positions.
• According to the 2024 Leading Maritime Cities (LMC) report from DNV and Menon Economics, Singapore is expected to maintain its top position through 2029.
• Shanghai is forecasted to grow significantly in importance over the next 50 years and become the second most prominent maritime city.
• Dubai is also predicted to rise in the ranks and become a top-five hub in the coming years.
• Hong Kong, previously ranked fourth in the 2019 edition of the report, has now fallen to 12th place.
• The report's rankings are based on a comprehensive evaluation of five key pillars: shipping, finance and law, maritime technology, ports and logistics, and attractiveness and competitiveness.

Turkey → North America

• Containers currently on the water destined for Baltimore will be discharged and BL terminated at POD Norfolk. Ad hoc inland deliveries to Baltimore can be arranged through the Import Customer Service team, invoiced at cost. No barge solution is available until further notice.
• Containers in Asia not yet departed can opt for alternative PODs such as Norfolk or New York. Bookings will be rated based on existing Norfolk/New York contract rates. Ad hoc inland deliveries to Baltimore can be quoted rates as per public tariff. No barge solution is available until further notice.
• Future bookings to POD Baltimore are not accepted until further notice due to uncertainty regarding access to Baltimore Seagirt terminal by water. Additionally, no barge solutions into Baltimore are available until further notice.
• Operational disruptions, like the power outage at terminals such as PHSFS, added to challenges in port operations.
• Positive developments include the arrival of new cranes at Manila North (MICT), which are expected to improve operational efficiency once fully operational.
• Pilot implementation of operational adjustments (OPA) in SGSIN aimed to ease congestion by providing more cranes and berths, signaling efforts to address operational demands and requirements.
• U.S.-based companies are increasingly focused on mastering cross-border trade within North America, driven by supply chain disruptions, rising production costs globally, and a push to manufacture closer to primary markets.
• The combined GDP of Canada, Mexico, and the United States exceeds $29 trillion, comprising about 29% of global GDP, with a population of over 500 million people.
• These countries often collaborate effectively, facilitating productive cross-border trade.
• Canada, Mexico, and the United States rank among each other's top trade partners, with Canada and Mexico being top-three merchandise export markets for 49 U.S. states, according to the U.S. Chamber of Commerce.
• David Cox, CEO of Polaris Transportation Group, notes the increasing relevance of cross-border trade among Mexico, the United States, and Canada, citing a stable geopolitical environment, free trade, and a sizable combined population.
• Each country also benefits from an educated workforce, contributing to the efficiency of cross-border trade operations.

North America → Turkey

• Major airlines are avoiding Iranian airspace or canceling flights due to rising tensions in the Middle East following Iran’s missile and drone launch at Israel.
• Sea-Air transshipments from Dubai could be affected by the situation.
• Russian airspace being inaccessible due to the Ukraine conflict has led airlines to rely on Iranian airspace for the Asia-Europe trade route.
• Airspace closure would create bottlenecks in the Asia-Europe airfreight routes, causing price increases and delays.
• Air India mentioned that longer routes will impact trade if the situation worsens.
• Lufthansa Cargo and Air India are among the major carriers that have temporarily canceled flights to Israel.
• Iran's seizure of an MSC ship in the Strait of Hormuz raises concerns about access to Jebel Ali port in Dubai, one of the busiest sea-air transit hubs.
• WorldACD reported a 114% surge in Dubai-to-Europe airfreight, mainly due to disruptions in ocean shipping.
• Dubai, Colombo, and Bangkok are significant sea-air hubs for Asia-to-Europe trade.
• The Port of Los Angeles saw a 19% year-over-year increase in container units handled in March, marking eight consecutive months of growth.
• March's performance contributed to a total of 2.38 million TEUs for the first three months of the year, close to a 30% increase compared to 2023 and among the port's best first quarter starts.
• Loaded imports rose by 19% and loaded exports by 47%, while the port also processed 7% more empty containers compared to last year.
• Gene Seroka, the port’s executive director, expects April throughput to surpass 700,000 TEUs despite being a slower season.
• The port anticipates a consistent cargo flow through the summer and peak shipping season.
• Several factors such as drought conditions, labor negotiations, geopolitical developments, and impacts from the Baltimore Key Bridge collapse could further boost cargo numbers.
• The National Retail Federation forecasts a significant increase in U.S. container imports for the first half of 2024, expected to reach 11.7 million TEUs, an 11% rise from last year.

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 3 days waiting time is expected at Port Liberty Terminal Bayonne.
• Average gate turn times: 65 minutes for single transactions, and 98 minutes for double transactions.
• Terminal change to Port Liberty New York.
• An earthquake hit New York City, New Jersey with 4.8 Magnitude on April 5, 20204.
• However, no issues were reported at Maher, Port Liberty, APMT NYC or Greenwich terminal in Philadelphia.
• All other vessels on AL6 will continue to call Maher terminals.

Norfolk:

• Currently, most vessels berth on arrival, however, the bigger vessels wait approx. 2 days for a berth.
• Average gate turn times are 30 / 41 minutes for single and double transactions respectively.
• Berth congestion had relaxed overall but it is expected to worsen after severe weather delays.
• This is mainly for ships arriving from New York later this week.

Charleston Terminal:

• Waiting time for vessel berthing is 2 days at Wando Welch Terminal and 0.5 days at North Charleston Terminal.
• Average truck turn times: 18  minutes at Wando Welch Terminal, and 23 minutes at North Charleston Terminal.
• Dock construction at Wando Welch terminal started on March 11, 2024.
• It is reducing berth space from 3 to 2 berths for one year.
• Berths will be given on a first come, first serve basis.
• This project will also limit the amount of class 1.1 and 1.2 that can be handled at the terminal during this time.

Savannah:

• Waiting time for vessel berth at the terminal is up to 2.5 days, depending on the size of the vessel.
• Frequent river closures are expected due to fog during this week.
• Average gate turn times are 34 / 55 minutes for single and double transactions respectively.
• Import dwell time is 3.2 days.
• Berth 2 is back online helping to reduce waiting times.

Houston:

• Barbours Cut Terminal has up to 1 day waiting time for vessel berthing. The same goes for the Bayport Container Terminal.
• Bad weather in the Gulf of Mexico continues to cause closures at ports south of Houston and delays on arrival.
• Due to vessel bunching the yard is facing congestion impacting the discharge productivity and extending port stays.
• Average gate turn time at Barbours Cut Container Terminal is 30 minutes and Bayport Container Terminal is 50 minutes.
• Loaded import dwell is at 3.6 days at Barbour's Cut and 3.4 days at Bayport.

Oakland:

• Average wait time of up to 4 days at Oakland Int’l Container Terminal (OICT) and 1 day at TraPac.
• Average import deliveries can take up to 5.3 days at TraPac and 3.2 days at OICT.
• Average gate turn times are 65 / 74 minutes for OICT and TraPac respectively.
• OICT reported two cranes are non operational.

Seattle-Tacoma:

• No waiting time at Husky and 4 days at WUT at Tacoma.
• 2 days waiting time in Seattle.
• Import deliveries are 3 days at Husky – due to EB/WB railcar imbalance, 3.6 days at Washington United Terminal, and 1-3 days at T18.
• The average gate turn times are 33 minutes for T18, 34 minutes for Washington United Terminal, and 54 minutes for HUSKY.
• Terminal 18 will be closed on April 26, 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 3.9 days, and import units on the street are averaging at 3.3 / 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 23 / 64 minutes, depending on the terminal.

Chassis Pools

All pools are operating as normal.

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.

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.