Freight market update - 26 June 2024

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• Maritime consultancy Drewry noted that carriers introduced 1 million TEUs of new containership capacity to trades originating from Asia in the first four months of 2024.

• BIMCO estimated that an additional 10% capacity beyond normal levels is required to handle global container trades due to the rerouting of ships.

• The Indian Government has approved plans for a new mega port to be built approximately 125 km north of Mumbai on India’s west coast.

• Container rates have surged, with Trans-Pacific and Asia-Northern Europe rates 50% higher than in April, almost three times higher than last year, and 3.5 times higher than in 2019.

• The American Trucking Association (ATA) reported a 3.6% increase in their seasonally adjusted truck tonnage index from April to May, which measures trucking demand.

• The Cass Freight Shipments Index, a broader measure that includes intermodal and other freight and truck shipments, showed no change from April and is down 5.6% year-over-year.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Maritime consultancy Drewry noted that carriers introduced 1 million TEUs of new containership capacity to trades originating from Asia in the first four months of 2024.
• Nonetheless, port congestion in Asia and several European hubs, along with the rerouting of ships around the Cape of Good Hope due to strong demand on the Asia-Europe and Trans-Pacific trades, has negated the added capacity.
• BIMCO estimated that an additional 10% capacity beyond normal levels is required to handle global container trades due to the rerouting of ships.
• On the Asia-North Europe route, there was a deployment of 24% more ships and an addition of 17% more total capacity.
• However, this only resulted in a 2% increase in effective capacity, according to Drewry.
• On the Asia-North America East Coast route, despite a 9% increase in the number of ships, effective capacity remained the same.
• The shortage of space has led to a significant rise in spot rates.
• A Drewry survey indicated a trend of shippers importing goods earlier, leading to an early peak season in the Asia-Europe and Trans-Pacific trades.
• Drewry has cautioned about a potential "volume vacuum" when the current demand surge subsides.
• The Indian Government has approved plans for a new mega port to be built approximately 125 km north of Mumbai on India’s west coast.
• Vadhavan Port is a crucial element of the plan to connect India with Europe via sea and rail links through the Middle East.
• The port will feature nine container terminals and four multipurpose berths, including a coastal berth, four liquid cargo berths, a Ro-Ro berth, and a Coast Guard berth.
• Vadhavan Port will have a cumulative annual capacity of 298 million tonnes of cargo.
• The port is expected to handle 15 million TEUs annually by 2034, with an increase to 23 million TEUs by 2040.

Turkey → North America

• The American Trucking Association (ATA) reported a 3.6% increase in their seasonally adjusted truck tonnage index from April to May, which measures trucking demand.
• This rise marked the index’s first increase since February 2023.
• Compared to the previous year, adjusted tonnage rose by 1.5%, representing the first yearly gain in 15 months.
• ATA’s chief economist, Bob Costello, expressed caution about the significance of this increase, stating it was too early to determine if it indicated “a long-awaited recovery in the truck freight market.”
• The ATA index, which primarily covers contract freight rather than spot market loads, is the first indicator to show positive gains for trucking, suggesting that both large truckload and less-than-truckload carriers saw a significant rise in shipments.
• Despite the increase in U.S. imports, other freight indexes measuring truck volumes have shown mixed results.
• The Cass Freight Shipments Index, a broader measure that includes intermodal and other freight and truck shipments, showed no change from April and is down 5.6% year-over-year.
• Michigan State University’s truck ton-mile index, another broader measure of truck volume than ATA’s index, decreased by 0.5%.
• According to the “2024 State of Sustainability in Freight Forwarding” report by the British International Freight Association (BIFA) and Pledge, sustainability is not a top priority for small freight forwarders.
• Despite ongoing efforts to be greener in the airfreight and logistics sectors, more than half of small forwarders are focusing on other business-critical issues.
• The report indicates that many forwarders plan to offer sustainability services within the next 12 months, even though it is not currently a top priority.
• More than half of the respondents have some form of sustainability policies, and nearly two-thirds report that customers are requesting carbon emissions reporting on their shipments.
• The report highlights that company size influences the prioritization of sustainability in freight forwarding companies.
• Sustainability is considered important for enterprise-level companies with more than 1,000 employees and large companies with 250-1,000 employees.
• Smaller forwarders with 10-50 employees tend to view sustainability as a lower priority.
• Very small forwarders with 1-10 employees are more likely to see sustainability as a low priority or not a priority at all.

North America → Turkey

• The “State of Logistics” report by the Council of Supply Chain Management Professionals (CSCMP) reveals that U.S. logistics costs fell by 11% in 2023, amounting to $2.4 trillion.
• Even with this decrease, U.S. business spending on logistics remains significant, following increases of 22.4% in 2021 and nearly 20% in 2022.
• Many logistics companies acknowledge that supply chain volatility is likely to persist, but investment in technology and infrastructure to handle disruptions remains insufficient.
• According to the CSCMP report, buyers of freight services currently have an upper hand, but this advantage is expected to diminish as shipping capacity becomes constrained.
• Air and ocean freight volumes have increased as importers bring forward orders to avoid space shortages.
• The rerouting of ships around the Cape of Good Hope has strained carrier networks and equipment availability, causing vessel bunching and port congestion in Asia and some European hubs.
• Container rates have surged, with Trans-Pacific and Asia-Northern Europe rates 50% higher than in April, almost three times higher than last year, and 3.5 times higher than in 2019.
• The CSCMP report also highlighted weak freight demand in 2023, except for a fourth-quarter boost in air and ocean volumes due to e-commerce.
• It is anticipated that capacity will tighten later this year, leading to increased rate pressure.
• The trucking industry struggled with overcapacity, resulting in low rates, though prices may recover by late 2024 or early 2025.
• Rail traffic saw slight growth, but revenues declined by 2%, with intermodal volumes down by 6%.
• Despite this, the outlook for intermodal volumes is positive as more manufacturing shifts to Mexico.

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 2 days waiting time is expected at Port Liberty Terminal Bayonne.
• Average gate turn times: 43 minutes for single transactions, and 66 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 34 / 47 minutes for single and double transactions respectively.
• Berth congestion has relaxed.

Charleston Terminal:

• Currently, there are 15 ships at anchor. Omissions from all carriers are slightly reducing the extent of delays, though delays are still expected to be up to 11 days this week, decreasing to 6-8 days next week.
• A section of berth 3 will temporarily reopen around week 26, allowing a third ship of up to 900' to work while berths 1 and 2 are occupied.
• The toe wall construction will pause around the July 4th holiday for two weeks, enabling normal operations in all three berths to clear the anchorage.
• With these measures and omissions factored in, the wait by the end of June should reduce to 4-5 days.
• By the end of July, the wait should decrease further to a maximum of 2-3 days, aligning with initial expectations solely from the construction schedule.
• Average truck turn times are 24 minutes at Wando Welch Terminal and 19 minutes at North Charleston Terminal.
• Dock construction at Wando Welch Terminal began on March 11, 2024, reducing berth space from 3 to 2 berths for one year. Berths will be allocated on a first-come, first-served basis.
• This project will also restrict handling of class 1.1 and 1.2 materials at the terminal during this period.

Savannah:

• Waiting time for vessel berth at the terminal is up to 1 day, depending on the size of the vessel.
• Average gate turn times are 38 / 55 minutes for single and double transactions respectively.
• Import dwell time is 4 days.

Houston:

• Barbours Cut Terminal has up to 1 day waiting time for vessel berthing. The same goes for the Bayport Container Terminal.
• Average gate turn times at Barbours Cut Container Terminal are 38 / 57 minutes for single and double transactions.
• The gate turn times are 34 / 54 minutes for single and double transactions at Bayport Container Terminal.
• Loaded import dwell is at 3.6 days at Barbour's Cut and 3.5 days at Bayport.

Oakland:

• Average wait time of up to 1 day at Oakland Int’l Container Terminal (OICT) and 2 days at TraPac.
• Average import deliveries can take up to 5 days at TraPac and 3.2 days at OICT.
• Average gate turn times are 90 / 75 minutes for OICT and TraPac respectively.
• Port of Oakland has started the bollard and fender replacement project at OICT, starting with Berth 55 through Berth 59.
• The project is expected to last into Q1 of 2025.

Seattle-Tacoma:

• 2 days waiting time at Husky, and 4 days at Washington United terminal at Tacoma. No waiting time in Seattle.
• Import deliveries are 3.7 days at Husky, 4.5 days at Washington United Terminal, and 1-3 days at T18.
• Railcar supply is in severe deficit over the next couple of weeks in Tacoma.
• The average gate turn times are 27 minutes for T18, 30 minutes for Washington United Terminal, and 96 minutes for HUSKY.

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 4.7 days, and import units on the street are averaging at 3.4 / 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 21 / 89 minutes, depending on the terminal.

Chassis Pools

All pools are operating as normal except:

• Chicago – Constrained on 40’ chassis.
• Cleveland – Deficit on 20’ and 40’ chassis
• Columbus - 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.