Freight market update - 24 July 2024

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• Heavy congestion is reported at transshipment ports such as Singapore (SGSIN), Port Klang (MYPKL), and Colombo (LKCMB), leading to rolls, backlogs, and delays.

• In South India, carriers are facing challenges with equipment availability due to transshipment issues in Colombo.

• For the second half of July, carriers’ FAK rates have remained steady, though some rates have been reduced for both West Coast (WC) and East Coast (EC).

• Data from the Maritime and Port Authority of Singapore shows a 10% drop in vessel arrivals by total shipping tonnage in June, marking the lowest level since February 2023.

• Meteorologists predict that climate patterns associated with La Niña could emerge as early as next month, potentially affecting global shipping and trade patterns into early 2025.

• Forecasts suggest a 70% chance of La Niña starting between August and October, with a 79% probability of it lasting into early 2025.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Heavy congestion is reported at transshipment ports such as Singapore (SGSIN), Port Klang (MYPKL), and Colombo (LKCMB), leading to rolls, backlogs, and delays.
• Adverse weather conditions around the Cape of Good Hope are exacerbating the situation, causing additional delays.
• There is a significant imbalance in equipment, with 20ft containers being more prevalent for imports and 40ft containers used for exports in Bangladesh.
• In South India, carriers are facing challenges with equipment availability due to transshipment issues in Colombo.
• While the overall equipment situation is showing slight improvement, challenges persist.
• Recent weeks have seen congestion at Colombo and Singapore ports reach critical levels.
• Historically, Colombo has been a key hub for India’s containerized exports and imports due to limited direct line-haul connections from India’s east coast ports.
• Recent months have witnessed an unusual surge in volumes at Colombo, exacerbated by vessel diversions due to disruptions in Red Sea shipping, with ships waiting over five days to secure a berth.
• Singapore is experiencing its worst congestion since the pandemic, leading to increased shipping rates and affecting neighboring ports.
• However, recent data from the Maritime and Port Authority of Singapore shows a 10% drop in vessel arrivals by total shipping tonnage in June, marking the lowest level since February 2023.
• The intra-Asia shipping market is facing a shortage of vessels as smaller container ships are being redirected to more profitable long-haul routes.
• This shift has led to a significant increase in freight rates.
• Data from the Shanghai Containerized Freight Index indicates that Shanghai-Southeast Asia rates have risen from $756 per TEU on July 12 to approximately $1,413 per TEU, according to the Korea Ocean Business Corp's Composite Container Index.
• The vessel shortage has raised concerns among industry stakeholders, including the Korea Shipowners Association, Korea International Trade Association, and domestic feeder operators like Sinokor, Namsung, and Pan Ocean.
• The group has found that intra-Asia shipping costs have quadrupled since last year due to capacity shortages faced by exporters.
• High freight rates on deep-sea routes from Asia to Europe, the U.S., and South America are prompting regional carriers to shift smaller vessels to these more lucrative long-haul routes.
• Foreign operators are more likely to reassign vessels to long-haul lanes, while South Korean feeder operators are concentrating on their traditional routes.
• Container Trades Statistics (CTS) data reveals that China is the largest contributor of containers to both ports.
• From January to May, container imports from China to Northern Europe grew by 11.5% compared to last year, totaling 3.4 million TEUs.

Turkey → North America

• Meteorologists predict that climate patterns associated with La Niña could emerge as early as next month, potentially affecting global shipping and trade patterns into early 2025.
• Forecasts suggest a 70% chance of La Niña starting between August and October, with a 79% probability of it lasting into early 2025.
• La Niña is characterized by the cooling of surface-ocean water across the Central and Eastern Pacific Oceans, which can trigger a range of regional weather extremes and diverse conditions.
• South American countries may experience drought, leading to reduced crop yields.
• The Southern U.S. could also see more widespread drought-like conditions.
• Southeast Asia and India might receive increased rainfall, benefiting rice and palm oil crops and improving hydropower availability.
• Australia could face more rain and cyclones, potentially disrupting mining and the export of minerals such as iron ore and coal.
• La Niña is likely to increase hurricane activity in the Atlantic and bring colder winters to North Asia and Northern Europe, leading to higher energy consumption.
• The recent drought at the Panama Canal highlights the potential for widespread disruption to commercial shipping, as authorities had to limit ship crossings and impose draft restrictions, causing ocean carriers to reroute their Asia-North America East Coast sailings away from the canal.
• The International Longshoremen’s Association (ILA) has indicated that a strike "is becoming more likely" due to difficulties in securing a new contract with maritime employers on the East and Gulf coasts.
• ILA President Harold Daggett criticized the United States Maritime Alliance (USMX) for the slow pace of negotiations.
• The current contract for the union’s 45,000 members is set to expire on September 30, and Daggett stressed that members will not continue working beyond this date without a new agreement.
• Negotiations were halted in early June by the ILA, who alleged that Maersk’s terminal arm breached the current contract with technology projects at the Port of Mobile.
• Despite these issues, the USMX expressed confidence in making progress and aims to finalize a new contract by October 1.
• The last contract negotiations in 2018 concluded with an agreement by early September.

North America → Turkey

• The market for shipping to the USA remains highly constrained, with strong demand leading to limited space availability.
• For the second half of July, carriers’ FAK rates have remained steady, though some rates have been reduced for both West Coast (WC) and East Coast (EC). Due to tight space, it is advised to book 2-3 weeks in advance.
• The Panama Canal has announced two consecutive increases in the permissible draught following better-than-expected water levels in Gatun Lake.
• Recent weeks have seen a return to more normal rainfall patterns, leading to an increase in daily transits from 32 to 33 in early June and to 34 on June 22.
• However, the canal is still operating below its normal capacity, with normal draught limits set at 50 feet, compared to the current 47/48 feet.
• Regional carriers are resuming services on the Trans Pacific trade route, while mainline carriers are also adding extra capacity.
• TS Lines is re-entering the market with two additional loaders between the Far East and USWC later this month and has entered a Vessel Sharing Agreement (VSA) with SeaLead Shipping.

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:

• One day waiting time is expected for a berth at Maher Terminals LLC and APM Terminals.
• Waiting time of up to 3 days is expected at Port Liberty Terminal Bayonne.
• Average gate turn times are 49 minutes for single transactions and 100 minutes for double transactions.

Norfolk:

• Currently, most vessels berth on arrival.
• Bigger vessels wait approximately 2 days for a berth.
• Average gate turn times are 34 minutes for single transactions and 45 minutes for double transactions.

Charleston Terminal:

• 1.5 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 24 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.
• Berths will be given on a first-come, first-serve basis during this construction period.

Savannah:

• The waiting time for a vessel berth at the terminal is up to 2 days, depending on the vessel's size.
• Average gate turn times are 33 minutes for single transactions and 54 minutes for double transactions.
• Import dwell time is 3.5 days.

Houston:

• There is up to a 2 days waiting time for vessel berthing at Barbours Cut Terminal and Bayport Container Terminal.
• Average gate turn times at Barbours Cut Container Terminal are 35 minutes for single transactions and 51 minutes for double transactions.
• Average gate turn times at Bayport Container Terminal are 27 minutes for single transactions and44 minutes for double transactions.
• Loaded import dwell time is 3.8 days at Barbours Cut and 3.7 days at Bayport.

Oakland:

• The average wait time is up to 1 day at Oakland International Container Terminal (OICT).
• The average wait time is 2 days at TraPac.
• Average import deliveries can take up to 5.7 days at TraPac.
• Average import deliveries can take 3.2 days at OICT.
• Average gate turn times are 90 minutes at OICT and 84 minutes at TraPac.

Seattle-Tacoma:

• There is a 13 day waiting time at Husky Terminal and 7 days at Washington United Terminal in Tacoma.
• There is a 5 day waiting time in Seattle.
• Import rail dwell times are 5.9 days at Husky Terminal.
• Import rail dwell times are 5 days at Washington United Terminal.
• Import rail dwell times are 1-3 days at Terminal 18 (T18).
• Rail car supply is in severe deficit over the next couple of weeks in Tacoma, causing higher import rail dwell times.
• Average gate turn times are 34 minutes at T18.
• Average gate turn times are 23 minutes at Washington United Terminal.
• Average gate turn times are 135 minutes at Husky Terminal.
• T18 will be closed July 19, 26 and 29, 2024. Husky Terminal will have hoot gates on July 22,23,24 and 25, 2024.

Los Angeles/Long Beach:

• Port of Los Angeles dwell time for local import cargo is 3.3 days.
• On-dock rail dwell time at Port of Los Angeles is 4.2 days.
• Import units on the street at Port of Los Angeles are averaging 4.0 days for 20 ft containers and 6.2 days for 40+ ft containers.
• Port of Long Beach dwell times for local imports are stable.
• Average terminal gate turn time at Port of Long Beach is between 25 and 92 minutes, depending on the terminal.

Chassis Pools

All pools are operating as normal except:

• Pittsburgh – Deficit on 40’ chassis
• Meto Buffalo – Deficit 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.