Freight Market Update - October 26, 2022

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 Highlights for US

• COVID-19 is being a problem in Asia again by new lockdowns. 
• The upcoming service changes from CMA, MAERSK, Wan Hai Lines for Asia services to the Pacific Northwest and California.
• CMA announced the implementation of a new Turkish Express Service
• Spot US truckload rates continued to cool through September, but there are early signs that prices are bouncing back in October.

 Ocean Freight Market Update

 Asia → North America

U.S

• Chinese port cities have been affected by new lockdowns despite lower demand in the traditional peak season. Covid restrictions are impacting supply chains in Ningbo, Shanghai and Tianjin all of which are major port hubs in China. 
• West coast rates look reached/close to reach to breakeven. So, there is no expectation about big decreasing/adjustments on the rates in the market. So, capacity decreases & service adjustments might be often observed in West Coast Market.
• Declining in the spot rates of East Coast is proceeding but it is very slowly in comparing it with past couple of weeks. It is still profitable market for the Ocean carriers. Due to the falling down of the volume to Gulf & East Coast, carriers returned from the decision of implementing GRI in Nov to stabilize current rate level till Nov.15 at least. 
• Maersk and Wan Hai Lines are culling and consolidating various Asia services to the Pacific Northwest and California over the fourth quarter in a further pullback from 2021 expansions. 
• CMA announced a new ring service as PRX from China to LA. PRX offers transit time as 14 days from Asia to Los Angeles. Rotation as below Fuqing – Nansha – Yantian - Xiamen – Qingdao – Los Angeles – Fuqing.
• Wan Hai Lines this month also plans to end two trans-Pacific services that started in 2021, Those services include the AA1 and AA2, which both called Seattle and Oakland. AA3 and AA5 rotations will be revised.

Canada 

• There is improvement in rail backlog compared to last week for Vancouver and Prince Rupert.
• Maersk said Monday that the Eagle/TP9 service from China to the ports of Vancouver and Seattle will end this month. In its place, Maersk said shippers can use the Maple/TP1 service that will call both Vancouver and Prince Rupert, with the first sailing from China’s Xiamen port on Oct. 28.

Rates: Carriers returned from the decision of implementing GRI. Until November 15 rates are stabilized.

Space: Open and no equipment problem. 

Recommendation: We advise that you speak with your freight forwarding partner to understand if your shipments have been impacted by any of the lockdown restrictions in China. 

Turkey → North America

• Space is available across most lanes at standard (non-premium) rates. Decreases in port congestion globally are effectively increasing capacity. 
• USEC ports continue to see challenges with vessel congestion at Savannah and Houston.
• CMA announced the implementation of a new Turkish Express Service effective as from November 25th, 2022 ex Iskenderun port. Routing will be from Turkey, West Med to US east Coast.

Rates: Hapag / ONE / MSC are decreasing rates due to current market status.

Space/Capacity/Equipment: Hapag vessels are full due to lower rates but including them all carriers have equipment from TR to USA/Canada.

 North America → Turkey

• USEC ports continue to see challenges with vessel congestion at Savannah and Houston. Low schedule reliability is causing significant issues with changes in posted earliest return dates and vessel cut-offs at the port. 
• For USWC, arrivals and available capacity for Los Angeles is generally open whereas Oakland and Seattle remain more fluid.

Rates: Showing stability at their current market price, week over week. 

Capacity/Equipment: Space is available on most of the USEC services. And Carriers prioritize containers to export from US ports.

Terminal Updates

• APM Terminals Mobile, Alabama Update: Port operations and port labor are working normally and business as usual. 
• South Florida Container Terminal will be handling more volumes after the start of a new trans-Atlantic service from the Mediterranean, with the CMA CGM Navegantes making its first call to Miami this week.
• Los Angeles and Long Beach have both seen improvements. The number of vessels within 150 nautical miles of San Pedro Bay has remained below 10 vessels for several weeks and wait times have been reduced to under a day. Currently there are 44 vessels heading towards the Bay, with 22 allocated for each port. Rail availability continues to stabilize and improve. 
• Hurricane Ian caused massive flooding and damage throughout the state of Florida. Tampa and Jacksonville were closed at the end of September.
• Reduced backlogs in Southern California due primarily to the diversion of cargo to the East and Gulf coasts have shifted the congestion problems to ports in those regions.
• Empty container returns are becoming a problem for Oakland terminals day by day due to increased number of empty containers they keep in yards.
• There have been improvements on the West Coast ports except for Oakland where the backlog of vessels stands at 16 ships. Vessel wait times are up to 25 days, in part due to two cranes being down for maintenance. The vessel line up, yard congestion, and rail status markers are in the red.
• Chicago remains the most reliable for loading. Kansas City and Memphis are seeing congestion related to equipment and chassis challenges.  

Intermodal

Midwest

• Rail cargo also is experiencing significant delays. Due to the ongoing chassis shortage, import containers cannot outage inland rail locations in a timely manner, with Chicago, Dallas, Memphis, Kansas City, and St. Louis the most affected. Once terminals run out of space, import containers go into stacks, and rail lines try to avoid the congested hubs and associated time delays due to the lack of space and longer unload times.
• Railroads keep suspending services or limit departure plans to some IPI ramps. Following current report of on-dock IPI rail service which has been provided by CMA emphasizes the situation clearly.

Railroad / UP

• USKCK / USSTL / USSLC / USDEN - service is paused with full embargo
• OMA Council Bluffs - service is paused with full embargo
• DIT (DAL) – service is metered

Railroad / BNSF

• USSTL - service is paused with full embargo
• CHI-LPC / DAL-Alliance / KCK – service is metered

 USA Trucking Freight Market Updates

• Hurricane Ian's aftermath has shaken the US domestic trucking landscape, especially in Florida. While Miami port stood resilient, both Tampa and Jacksonville ports had to shut down operations for three days, underscoring major freight market trends. The ripple effects of these closures will likely echo in the inland logistics scenario for many months to come. There's potential for a notable shift in resources as numerous USA truck companies could redirect their focus to support federal, state, and humanitarian recovery initiatives. This might translate to truck capacity challenges for firms across other states.
• In terms of financial implications, LTL shipping costs witnessed a 0.3 percent spike in September. A year-on-year comparison reveals an increase by 15 percent. Meanwhile, truckload expenses are showing a gradual decline, as indicated by the recent US producer price index.