Freight market update - 25 October 2023

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• As of October 9th, inactive capacity reached a total of 315 ships, equivalent to 1.18 million TEU.

• Shipping rates from Shanghai to Europe and the USA are currently high and are not expected to decrease in the near future.

• The Port of Long Beach achieved its busiest September ever, handling a total of 829,429 twenty-foot equivalent units (TEUs).

• The surge in cargo activity is due to a demand for holiday-related products and the recent approval of a labor agreement.

• In the third quarter, the 3 major US airlines reported significant revenue growth in their core passenger operations, but their cargo revenues decreased notably.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• The global containership capacity that is currently inactive has experienced a significant surge.
• According to Alphaliner's most recent report, the number of vessels not in active service and those undergoing repairs has notably increased over the past two weeks.
• As of October 9th, the inactive capacity reached a total of 315 ships, equivalent to 1.18 million TEU (Twenty-Foot Equivalent Units).
• This represents an increase of 44 ships and 233,504 TEU in comparison to the previous survey conducted on September 25th.
• The growth in inactive capacity is partly attributed to the idling of several large units, including seven ships controlled by carriers, each with a capacity exceeding 12,500 TEU.
• Currently, commercially idle vessels make up 40% of the entire inactive fleet, a rise from 34% observed just two weeks prior.
• Shipping rates from Shanghai (SHA) to Europe and the United States are currently high and are not expected to decrease in the near future. This is primarily due to a bustling market driven by increased e-commerce cargo orders.
• Rates from Ningbo (NGB) to Europe and the United States have risen, driven by the peak season. The final rate for this route is determined on a case-by-case basis.
• In North China, specifically from Tianjin (TSN) to Europe and the United States, rates for Korean Airlines have increased for both destinations.
• Korean Airlines have fully booked their space until the end of October for both European and US routes.
• Rates for Asiana flights on these lanes are experiencing fluctuations, and space availability is limited.
• Shipping from South China, particularly from Guangzhou (CAN) to Europe and the United States, is facing a tightening of available space, mainly due to the current peak season.
• For shipments on this route, it is necessary to contact the carrier directly to determine rates, as they are determined on a case-by-case basis.

Conclusions

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

Space - Space open, no issues with equipment.

Recommendations - We recommend blank sailings to continue. Book at least two weeks before the date your vessel gets ready to depart.

Turkey → North America

• In the second half of October, shipping rates have stabilized with minimal changes when compared to the first half of the month following a recent drop.
• Although there is limited visibility regarding November rates, they are expected to rise.

Here are the latest updates on port congestion in North America:

• Los Angeles/Long Beach: There is no delay for berthing, and no vessels are waiting to berth, indicating significant improvement in Los Angeles.
• Oakland: Port congestion has increased to 2 days, attributed to damaged bumpers. Despite this issue, the port has been operating effectively, but congestion is growing due to an upsurge in vessel arrivals.
• New York/New Jersey: Currently, there are 4 vessels waiting between these two ports, which is considered normal. Dwell time is at 3 days for New York.
• Norfolk: The congestion at Norfolk port has seen significant improvement, with the current waiting time reduced to one day and only 11 vessels waiting to berth, compared to 20 vessels waiting two weeks ago.
• The Port of Long Beach achieved its busiest September ever, handling a total of 829,429 twenty-foot equivalent units (TEUs).
• This marked an 11.8% increase compared to the same month last year, signifying the first monthly year-over-year cargo growth in 14 months.
• The surge in cargo activity is attributed to strong consumer demand for holiday-related products and the recent approval of a labor agreement between dockworkers and management.
• Import volumes experienced significant growth, rising by 19.3% to reach 408,926 TEUs.
• Empty containers passing through the port also increased by 11.5% to 319,255 TEUs.
• In contrast, exports declined by 10.3% to 101,248 TEUs.
• The port anticipates a moderate rebound in cargo volume for the remainder of the year.

Conclusions

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

Space for capacity - No capacity issues or issues with space.

Space for equipment - No issues with equipment.

North America → Turkey

• In the third quarter, the three major US airlines reported significant revenue growth in their core passenger operations, but their cargo revenues decreased notably.
• American Airlines experienced the smallest decline in cargo revenue, with a year-on-year decrease of 30.9%.
• Delta Air Lines saw a cargo revenue decrease of 36%, while United Cargo's revenue dropped by 33%.
• Despite these declines, all three airlines express optimism regarding the performance of their cargo divisions and their outlook for the final quarter. They are focusing on enhancing the value of their higher-yield premium products and meeting the demands of customers in crucial sectors, particularly international passenger demand.

Conclusions

Rates - Stable rates over the last week.

Space for capacity - No major capacity or space issue.

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

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 5 days waiting time is expected at Global Container Terminals Bayonne.

●   The scheduled maintenance for Crane 6, originally set to start on October 1, 2023, has been postponed indefinitely to reduce congestion.

●   Average gate turn times: 60 minutes for single transactions, and 90 minutes for double transactions.

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.

●      All cranes operating as per schedule.

●      Load and discharge of explosives class 1.1, 1.2 and 1.5 suspended by USCG, until further notice.

Charleston Terminal:

●   No waiting time for vessel berthing at Wando Welch and North Charleston Terminals.

●   Average truck turn times: 22  minutes at Wando Welch Terminal, and 16 minutes at North Charleston Terminal.

Savannah:

●   Waiting time for vessel berth at the terminal is up to 4.5 days, depending on the size of the vessel.

●   Average gate turn times are 39 / 55 minutes for single and double transactions respectively.

●   Two new cranes are currently being commissioned on berth 2. Four of the oldest cranes on the same berth are being demolished. Berth 2's capacity to handle vessels will be limited for several months.

Houston:

●   Barbours Cut Terminal has up to 1 day waiting time for vessel berthing.

●   Due to vessel bunching the yard is facing congestion impacting the discharge productivity and extending port stays.

●   The average gate turn time is 46 minutes.

●   Loaded import dwell is at 3.3 days.

Oakland:

●   Average wait time of up to 3 days at Oakland Int’l Container Terminal (OICT) and TraPac.

●   Average import deliveries can take up to 4 days at TraPac and 4 days at OICT.

●   Average gate turn times are 59 / 66 minutes for OICT and TraPac respectively.

Seattle-Tacoma:

●   Wait time of up to 4 days at Tacoma and Seattle.

●   Import deliveries are 8.0 days at HUSKY – due to EB/WB railcar imbalance, 7.1 days at Washington United Terminal, and 1-3 days at T18.

●   Rail car availability is a significant concern at present, primarily because there is a low volume of rail cars heading Westbound to balance the high volume going Eastbound. This issue is exacerbated by omissions in Vancouver.

●        The railroads are actively working with all stakeholders to improve the availability of rail cars. However, if more Westbound cargo or empty cars are not made available, this problem will continue.

●       As an alternative to rail transport, inland cargo transportation via truck is also an option to consider.

●   Average gate turn times are 26 / 37 / 46 minutes for T18, Washington United Terminal, and HUSKY respectively.

●   T18 will be closed on Fridays through October.

●   WUT has received 2 new Post Panamax Cranes.

●   WUT has commenced commissioning both, operational by the mid/end of September.

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 3.3 days, on-dock rail dwell is 4.0 days, and import units on the street are averaging at 4.4 /6.0 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 22-75 minutes, depending on the terminal.

●   Chassis Pools: All pools are operating as normal except:

1. Chicago – Deficit on 20’ and 40’ chassis.

2. Kansas City – 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.

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.