Freight Market Update - January 25, 2023

From the Editor’s Desk

Greetings!

We strive to bring the latest trades and trends of the freight market to you for convenience and ease of shipment. We aim to bring relevant and accurate content right to your fingertips. Let us know if you cherished this weekly market update as much as we did while curating it for you.

We would appreciate it if you could follow us and share your comments. Would you like to receive more information regarding certain topics discussed? Or do you wish to learn more about projections in the new year? Is there a specific area or port we missed in our previous newsletters? Whatever the case, we are always looking for ways to improve and level up our weekly performance.

It is our single-minded focus to make this newsletter the best it can be. Thank you for reading it, subscribing to us, and sharing your valuable feedback.

Key takeaways for the US

• Demand is expected to decrease after the Chinese New Year.

• 50+ blank sailings from Asia to Europe in the first seven weeks of 2023.

• Minor TPEB changes in demand leading up to the Lunar New Year influences ocean freight rates and TPEB demand

• Space and congestion issues in various ports.

• Maersk and MSC to discontinue 2M alliance in 2025.

Read on for more in-depth updates.

Ocean Freight Market Update

Asia → North America

U.S / CA 

Lunar New Year prompts minor changes in TPEB demand

• Rates are easing from larger ocean carriers leading up to the Lunar New Year.

• This is new as it is that part of the year when blank sailings are most common.

• There are a few Lunar New Year rate hikes that can be avoided on several major lanes.

• Vancouver is proceeding to witness similar market and rate conditions.

• The berthing delays and vessel dwell counts are also quite stable. There are just two vessels and just 6 days for berthing delays.

• In terms of rail, the maximum berthing delay is 11 days. This is also not bad owing to how much worse conditions could be.

• However, the low rates of TPEB are affecting rail congestion and potential clearing off in West Coast ports.

• 50 blank sailings are expected in the first seven weeks of 2023 from Asia to Europe. The total number is expected to be around 53 Westbound sailings.

• Demand is expected to weaken after the Chinese New Year and carriers may manage their demand and supply with blank sailings.

• Cathay Pacific Airlines is planning to double its flights to Mainland China after the eased pandemic restrictions.

Key Takeaways

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

Space: Space open, no issues with equipment except in a few pockets.

Recommendation: We recommend blank sailings to continue. Book at least two weeks prior to the date your vessel gets ready to depart. Be sure to keep upcoming blank sailings in mind owing to this time of the year.

Turkey → North America

• Port of Houston has announced a new import dwell fee that will be in effect soon.

• It will go into effect from February 1, 2023.

• $45 will be charged per unit per day. It will begin on the eighth day after the free time expires.

• This fee will remain in effect on top of demurrage charges for loaded import containers and other carriers.

• The reason for this sudden fee is to ensure constant and consistent fluidity at the Bayport and Barbours Cut container terminals.

• Space is notably open for both USEC and USWC ports. Congestion is improving quite well and there is space available in the market.

• Maersk and MSC have announced further capacity which will enter the market on their North Europe and MED to North America services.

Key Takeaways

Rates: Rates are dropping constantly with a consistent downward trend. The demand may dip even further into negative territory in the upcoming months.

Space for capacity: No capacity issues or issues with space due to the congestion easing up.

Space for equipment: No capacity issues or issues with space due to the congestion easing up.

North America → Turkey

• Capacity from the USEC is available but the Gulf and USWC remain tight.

• There are no space constraints and low utilization levels between various USEC and MED services.

Key Takeaways

Rates: Stable rates over the last week.

Space for capacity: Some intermodal terminals are heavily congested. However, there is no major capacity or space issue. No major hurdles for the U.S. and no blank sailings are planned for February.

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

Terminal Updates

• New York Terminal has relaxed its berth utilization and has constant import volumes. It is still lower than the volumes from previous weeks.

• Berth CB#1 at Savannah terminal is undergoing major reconstruction works. It is a two-year project that will extend up to June 2023.

• There is a receiving window for just nine days and all vessels will be provided an end receive date. It will be issued two days before the window gets locked.

• Once locked, they cannot be adjusted further and ETAs at the last port need to be correct along with the coastal.

• The dwell charge in Long Beach and Los Angeles is under review. It has seen some progress and is continued to be extended.

• Rail operations have been negatively impacted at the Prince Rupert terminal due to increased yard utilization.

• The designated import traffic is being trucked off the terminal for temporary storage to ease the situation.

Current US Domestic Trucking Market Trends

• The national Outbound Tender Rejection Index (OTRI) has failed to rise above 6% during Christmas.

• This is the first time this has been recorded in the last five years.

• Overstuffed inventories are resulting in rapid demand erosion.

• Eroding consumption is coming out of an overstimulated goods economy. Due to this, the transportation markets are weakening.

• These conditions may persist throughout the first quarter of 2023. Please note that this is a minimum forecast.

• The spot market will be filled with discounted freight during the slowest time of the year.

• This is provided there is little to no disruption in the carrier networks.

Final Thoughts on Ocean and Air Freight Rates and Trends

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

Some areas have been badly affected due to the Lunar New Year, the Chinese New Year, and inclement weather. Due to these special occasions, there is a dip in demand as well as longer dwell and waiting times for cargo.

This has resulted in various congestion and increased waiting times for vessels. There are mostly blank sailings planned for some ports while others are not planning any in February. It is best to make informed decisions and choose ports that are open and without space or equipment issues. It will help you import or export without the hassle and through sufficient manpower.

We can expect a steady and consistent increase in the market owing to these trends which are bound to change in the upcoming days. With that being said, we are grateful that you perused our newsletter till the end. Be sure to subscribe to us and stay notified about the latest weekly market updates.