Freight market update - 29 August 2024

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• Concerns over possible new tariffs on Chinese products, looming strike threats from ILWU workers, and the upcoming holiday season are driving US import volumes to surge.

• The looming threat of a strike at US East and Gulf Coast ports could strain the already pressured US air freight network.

• The US air freight network is currently grappling with heavy eCommerce traffic from APAC hubs, significantly consuming available capacity.

• Mediterranean Shipping Company will relaunch its North Asia-ANZ Wallaby service on August 19, using the MSC Tania, a 2,732 TEU vessel, beginning its route from Hong Kong.

• The Ningbo Beilun Phase III Terminal has reopened and is operating normally.

• Ningbo-Zhoushan is China’s second busiest container shipping port, handling more than 100,000 TEUs daily.

• Maersk and Hapag-Lloyd's Gemini aims for 90% schedule reliability, but there are questions about whether this is achievable.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Concerns over possible new tariffs on Chinese products, looming strike threats from ILWU workers, and the upcoming holiday season are driving US import volumes to surge.
• Despite these pressures, major ports like the Los Angeles/Long Beach complex have successfully managed the growing influx of goods thus far.
• Canadian Pacific Kansas City and Canadian National Railway, two of Canada's leading rail operators, are set to strike on Thursday, August 22, following unsuccessful negotiations over the weekend.
• Unless a last-minute deal is reached, the strike will significantly affect rail transport across the country.
• Mediterranean Shipping Company will relaunch its North Asia-ANZ Wallaby service on August 19, using the MSC Tania, a 2,732 TEU vessel, beginning its route from Hong Kong.
• This service connects key ports in China and Australia, addressing increasing transportation demands and shifting market dynamics.
• A transportation strike scheduled to take effect on August 20 at Port of Nhava Sheva has been postponed until September 9.
• The strike could have significantly disrupted supply chains, as the terminals have recently experienced congestion issues.
• The Ningbo Beilun Phase III Terminal has reopened and is operating normally.
• The port had shut down for two-and-a-half days after a container holding hazardous goods exploded on the YM Mobility containership docked at Ningbo-Zhoushan port on August 9.
• There were no casualties, and all crew members were found safe.
• Ningbo-Zhoushan is China’s second busiest container shipping port, handling more than 100,000 TEUs daily.
• The incident has not significantly disrupted vessel and container handling operations at the port or the broader market.
• However, it highlights ongoing concerns in the maritime industry regarding the safe transportation of hazardous materials in container shipping.
• Most of the world’s 30 largest container ports saw revenue growth in the first half of the year, except for three.
• According to Alphaliner’s report on container throughput, Hong Kong, Xiamen, and Hamburg experienced declines of -4.5%, -4%, and -1.2%, respectively.
• Hong Kong, once the 10th largest container port, has now dropped to 13th, handling 6.7 million containers compared to 7.1 million last year.
• Shanghai continues to lead as the world’s largest container port, with a 7.5% increase, handling 25.5 million TEU.
• Singapore is second, growing by 6.4% to 20.2 million TEU.
• Dubai has replaced Hong Kong in the 10th position.
• Overall, the average increase among ports that experienced growth was 7%.
• Dockworkers at India’s 12 largest ports plan to strike indefinitely starting August 28.
• The decision for a nationwide strike follows seven rounds of unsuccessful negotiations.
• A joint statement released by the six labor organizations representing dockworkers said port labor contracts had expired in December 2021.
• The unions have formally notified the port authorities and government of their intent to strike.
• The strike could significantly disrupt India’s growing global export trade and manufacturing sector.
• The government is actively investing in port expansion and attracting more container services.
• In 2024, cargo volume increased by over 4%, with container traffic up nearly 10%.

Turkey → North America

• Despite being in what is typically a lower-demand season, air cargo demand is on the rise, driven largely by the expanding US and European customer bases of Chinese retail giants Shein and Temu.
• eCommerce now accounts for one-fifth of air freight volume, a share that continues to increase annually.
• With both the US and EU stepping up regulatory scrutiny of eCommerce shipments, it remains unclear how these new regulations will affect ongoing demand.
• Air Incheon is set to acquire Asiana Airlines' cargo division in a $342 million deal, overcoming several delays.
• This acquisition aims to position Air Incheon as South Korea's second-largest freight airline.
• The deal is a strategic part of Korean Air’s broader effort to acquire Asiana Airlines, with regulatory approval anticipated by October this year.
• Canada's Labor Minister, Steven MacKinnon, has ordered final binding arbitration to end a rail work stoppage involving over 9,000 workers and the country’s two Class 1 railroads, Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC).
• MacKinnon’s decision came after 17 hours without a new labor deal.
• Both railroads wanted binding arbitration, while the union, Teamsters Canada Rail Conference (TCRC), opposed it.
• Despite the order, a strike is still possible.
• The core issues include wages and work-rest rules.
• CN and CPKC argue that a shift to per-hour wages would benefit workers, but the union disagrees, claiming it would reduce salaries.
• The rail work stoppage has wide-reaching impacts across North America, including halting cargo movement at Canadian ports and affecting U.S. railroads, which are no longer accepting Canada-bound containers.
• Transload operations are also facing increased pressure as Canadian trucking faces a surge in demand.
• U.S. railroads, including BNSF Railway and Union Pacific Railroad, expect increased business, which will put pressure on railcar supply, locomotive power, and train crews.
• Importers in Chicago might dray containers from Vancouver to Seattle or Tacoma for Midwest delivery using BNSF or UP.

North America → Turkey

• Canadian and Indian labor strikes are looming.
• The Panama Canal increases vessel draft to boost efficiency.
• Canada’s main freight railroads, CN and CPKC, have halted all intermodal traffic from the US to Canada due to a potential labor strike.
• Dockworkers at India’s twelve major seaports have announced an indefinite strike starting August 28 due to stalled wage negotiations.
• The Panama Canal has raised the maximum allowable draft for vessels transiting between the Atlantic and Pacific oceans to 50 feet, accommodating larger ships and enhancing the canal's efficiency.
• The looming threat of a strike at US East and Gulf Coast ports could strain the already pressured US air freight network.
• The US air freight network is currently grappling with heavy eCommerce traffic from APAC hubs, significantly consuming available capacity.
• As the peak season prolongs and seems likely to intensify, any additional surge in demand from prolonged port labor actions could significantly disrupt a network already under pressure.
• July’s PMI data shows a continued contraction in US manufacturing across all major industries.
• This downturn is driven by soft demand, with businesses cautious about capital investments due to uncertainties in federal policies and the economic climate.
• Recent political uncertainties surrounding the US election are further exacerbating the situation.
• The merger deal between Alaska Air and Hawaiian continues to progress as the US Department of Justice cleared the deal through their antitrust review process.
• The deal would greatly increase the network reach of the new organization and capture over half of the Hawaiian air travel market.
• The upcoming contract season brings uncertainty for shippers.
• Maersk and Hapag-Lloyd are leaving their current alliances, 2M and THE Alliance, in February to form the Gemini Cooperation.
• The shakeup in ocean alliances will likely impact contract negotiations, according to James Hookham, director of the Global Shippers Forum.
• Shippers are undecided over which alliance to utilize for long-term contracts and are concerned about the possibility of more alliance shifts in the future.
• Shippers will need to reassess alliances and be ready to work with different carriers, as previous contacts and connections may no longer exist.
• Drewry predicts that THE Alliance, with a weaker Trans-Atlantic network, may struggle without a strong partner to replace Hapag-Lloyd, potentially leading to customer loss or aggressive pricing.
• Despite losing Maersk, MSC is financially strong and is expected to do well with its new vessel investments.
• Maersk and Hapag-Lloyd's Gemini aims for 90% schedule reliability, but there are questions about whether this is achievable.
• Maersk CEO Vincent Clerc said he expects disruptions to continue through 2025.

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:

• 2 days waiting time is expected for a berth at Maher Terminals LLC and 1 day at APM Terminals.
• Waiting time of up to 4 days is expected at Port Liberty Terminal Bayonne.
• Average gate turn times are 46 minutes for single transactions and 69 minutes for double transactions.

Norfolk:

• Currently, most vessels berth on arrival.
• Bigger vessels wait approximately 2.5 days for a berth.
• Average gate turn times are 33 minutes for single transactions and 45 minutes for double transactions.

Charleston Terminal:

• 2 days waiting time for Wando Welch Terminal and 0.5 days for North Charleston Terminal.
• Average truck turn times are 18 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.

Savannah:

• The waiting time for a vessel berth at the terminal is up to 3 days, depending on the vessel's size.
• Average gate turn times are 34 minutes for single transactions and 55 minutes for double transactions.
• Import dwell time is 5 days.

Houston:

• There is a 1 day waiting time for vessel berthing at Barbours Cut Terminal and Bayport Container Terminal.
• Average gate turn times at Barbours Cut Container Terminal are 36 minutes for single transactions and 55 minutes for double transactions.
• Average gate turn times at Bayport Container Terminal are 30 minutes for single transactions and 49 minutes for double transactions.
• Loaded import dwell is 3.9 days at Barbours Cut and 3.7 days at Bayport.

Oakland:

• No waiting time at Oakland Int’l Container Terminal (OICT) and at TraPac.
• Average import deliveries can take up to 4.8 days at TraPac and 3.2 days at OICT.
• Average gate turn times are 80 minutes at OICT and 74 minutes at TraPac.

Seattle-Tacoma:

• There is a 11 day waiting time at Husky Terminal and 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 7.2 days at Washington United Terminal but some places see up to 14 days.
• Import rail dwell times are 3-5 days at Terminal 18 (T18).
• Average gate turn times are 38 minutes at T18.
• Average gate turn times are 24 minutes at Washington United Terminal.
• Average gate turn times are 46 minutes at Husky Terminal.
• T18 will now be open on August 23 and 30, 2024.
• Husky Terminal will have hoot gates on August 26, 27, 28, and 29, 2024.

Los Angeles/Long Beach:

• Port of Los Angeles dwell time for local import cargo is 3.2 days.
• On-dock rail dwell time at Port of Los Angeles is 7.9 days.
• Import units on the street at Port of Los Angeles are averaging 3.8 days for 20 ft containers and 6 days for 40+ ft containers.
• Average terminal gate turn time at Port of Long Beach is between 21 and 56 minutes, depending on the terminal.

Chassis Pools

All pools are operating as normal except:

• Chicago - Constrained on 40’ chassis.
• Columbus – Deficit on 40’ chassis.
• Louisville – Deficit on 20’ and 40’ chassis
• Memphis – Deficit on 20’ and 40’ 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, the market is currently in the course of showing 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.