Freight market update - 29 May 2024

Greetings!

Our objective is to make your shipping experience easier by offering you the latest and most informative details and insights regarding the freight market. We aim to provide accurate and relevant content that brings benefits to your business.

We highly value your feedback as we continuously strive to improve the quality of our weekly market updates. We value your thoughts on our current content and encourage you to suggest specific topics that you would like us to cover in more depth.

Moreover, we are open to adjusting the style of our updates to better align with your preferences. If there are any ports or regions that we haven't addressed yet but you're interested in, please let us know.

We wish to create the most informative newsletter possible. We appreciate your continued readership and subscription, and we thank you for taking the time to provide us with your valuable feedback, which will help us enhance our future performance.

• Equipment shortages are becoming more severe in China amid high export demand and disruption to long-haul and intra-Asia services as vessels avoid the Red Sea.

• Asian exports rose 13.2% in the first quarter, and U.S. imports from Asia climbed 24% year-over-year in the first four months, according to statistics compiled by the Japan Maritime Center based on official trade data.

• Shippers on Asia to North Europe and Mediterranean routes are struggling to secure weekly allocations from carriers due to an early peak season that has tightened capacity while driving up spot rates.

• Delays at ports in Singapore and China further exacerbate the shortage of empty containers, affecting schedules and equipment availability.

• The Port of Los Angeles continued a ninth consecutive month of year-over-year (y/y) growth, handling 770,337 container units, up 12% from last year.

• With GRIs already successfully implemented for the second half of May, further rate hikes are expected in June.

• Schedule reliability on the Transatlantic Eastbound route has decreased, with a drop of 6.9 percentage points, resulting in a reliability rate of 53.7%.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Equipment shortages are becoming more severe in China amid high export demand and disruption to long-haul and intra-Asia services as vessels avoid the Red Sea.
• Because of longer transits to Europe and North America, it is taking longer for Asian shippers to receive the containers they need to transport their cargo.
• The worst-affected Chinese ports are Ningbo, Dalian, and Guangzhou.
• Inland hubs like Wuhan and Chongqing also face shortages, particularly for 40-foot and 40-foot high cube containers.
• Ports in Taiwan and Singapore are facing similar challenges.
• Carriers are omitting calls to Indian and Middle Eastern ports to reduce transit delays, leaving empty containers uncollected at ports like Colombo, Sri Lanka.
• An increase in containerized exports has also compounded the issue.
• Asian exports rose 13.2% in the first quarter, and U.S. imports from Asia climbed 24% year-over-year in the first four months, according to statistics compiled by the Japan Maritime Center based on official trade data.
• Forwarders pointed out that carriers prioritize their biggest customers and long-haul routes over intra-Asia routes.
• They have also imposed surcharges, restricted containers, charged premiums, and adjusted allocations in response to equipment shortages.
• Capacity is extremely tight across all Asia-USA routes, with significant constraints expected to persist.
• The strong demand has led to substantial rate increases and congestion at major ports.
• Rates have increased sharply for the second half of May, with further rises expected in June.
• The implementation of new tariffs on Chinese imports by the Biden administration is contributing to this upward pressure on rates.
• CMA CGM will launch a new intra-America service connecting Brazil to Argentina.
• The port rotation includes Santos, Buenos Aires, Mar del Plata, Imbituba, and Santo.

Central China to USA (SHA/NGB)

• SHA (Shanghai): The market is busy with e-commerce cargo dominating. Rates have slightly increased and space is limited. Advanced booking is recommended to secure space.
• NGB (Ningbo): Rates have increased slightly and depend on flight availability. Final rates are determined on a case-by-case basis.

North China to USA (TSN/DLC/PEK/TAO)

• TSN (Tianjin): Rates from Korean Airlines have increased and are fluctuating. Space is tight and advanced booking is essential. Competitive rates from Japan Airlines are available for volume cargo.
• DLC/PEK (Dalian/Beijing): Rates with most airlines are increasing, with dense cargo applying for spot rates. Booking needs to be done 10 days in advance due to tight space.
• TAO (Qingdao): The market is stable with tight space and slightly increased rates. Spot rates are available for dense cargo on a case-by-case basis.

South China to USA (CAN/SZX/XMN)

• CAN (Guangzhou): The market is calm with potential discounts available, subject to spot rate checks based on actual flight dates.
• SZX (Shenzhen): Market conditions are normal with all shipments requiring carrier checks case by case.
• XMN (Xiamen): The market is stable, but e-commerce cargo is increasing, potentially raising costs.

Turkey → North America

• Container dwell times at Los Angeles/Long Beach (LA/LB) ports fell to the lowest point in April, boosting confidence among drayage and logistics providers about the readiness of marine terminals for an early peak season.
• Rail container dwell times decreased from 7.02 days to 4.55 days in March.
• Truck container dwells decreased to 2.5 days from 2.59 days despite a 17% month-over-month and 7.8% year-over-year increase in imports from Asia coming into LA/LB.
• Rail operators BNSF and Union Pacific have provided additional equipment to move the containers from the ports.
• Despite the lower dwell times, trucking and logistics executives who attended the DrayTECH conference last week have expressed concerns that LA/LB terminal operators are still canceling work shifts, which could lead to a buildup of containers once peak season arrives.
• John Cushing, president of PierPass, noted that the canceled terminal shifts were minimal.
• He observed that many trucker appointment slots remained unused, with 28% of day slots and 39% of off-peak slots not booked in Q1.
• Additionally, 10% of truckers missed peak shift appointments, and that number rises to 16% for off-peak slots.
• Cushing said these figures may suggest to terminal operators that there are enough appointment slots for truckers.
• The race for capacity has started, with shippers showing strong demand due to significant cargo movement in the first four months of 2024 to avoid potential Q3 constraints.
• Combined with an average of 5% ongoing blanked sailings, there is a looming future of tighter capacity, higher rates, and sellers’ market swings ahead.
• With GRIs already successfully implemented for the second half of May, further rate hikes are expected in June.
• Overall, this indicates a significant upswing compared to recent performance, with capacity shrinking due to resurgent port congestion.
• This congestion is driven by equipment shortages in China and longer routes around the Cape of Good Hope.
• Several carriers have announced General Rate Increases (GRIs) for May.
• Despite the capacity issues, rates are rising due to increased demand and equipment imbalances.
• Demand on the Transatlantic trade lane is improving as the traditional high season approaches.
• Capacity remains a challenge with significant overcapacity on the U.S. East Coast (USEC) route.
• Schedule reliability on the Transatlantic Eastbound route has decreased, with a drop of 6.9 percentage points, resulting in a reliability rate of 53.7%.
• While space from the USWC to Europe has improved, it remains tight.
• Key west Mediterranean ports are experiencing congestion due to increased transshipment volumes.
• Schedule reliability on the Transatlantic Westbound route has also dropped, with a decrease of 8.1 percentage points to 50.7%.

North America → Turkey

• Shippers on Asia to North Europe and Mediterranean routes are struggling to secure weekly allocations from carriers due to an early peak season that has tightened capacity while driving up spot rates.
• Peak season has been brought forward by four to six weeks, a Hapag-Lloyd spokesperson said.
• To manage the capacity crunch, carriers are limiting allocations through blank sailings, rollovers, weight limitations, new cancellation policies, and more.
• Similarly, ocean carriers prioritize lucrative spot rates over fixed-rate bookings in the Trans-Pacific region.
• Consequently, shippers must either pay the high rates or face the possibility of having their cargo rolled.
• Delays at ports in Singapore and China further exacerbate the shortage of empty containers, affecting schedules and equipment availability.
• Hapag-Lloyd said eastbound vessels were being delayed for up to six days in Singapore and two days in China.
• With vessels unable to return on time, it has resulted in a deficit in empty containers in China.
• The Port of Los Angeles continued a ninth consecutive month of year-over-year (y/y) growth, handling 770,337 container units, up 12% from last year.
• The port’s container throughput has increased by 25% y/y, surpassing the port’s five-year running average by 5%.
• Total loaded import containers rose 21%, while total exports jumped 51%, marking 11 straight months of increases.
• However, empty container processing decreased by 14%.
• In a media briefing, Port of Los Angeles Executive Director Gene Seroka said that the port’s operational statistics are at or better than pre-COVID levels.
• Daniel Hackett of Hackett Associates, which produces a rolling six-month forecast of imports for 6 major container ports across North America, joined Seroka for the briefing.
• Hackett shared insights into the rise of West Coast cargo volumes over the past year and spoke on the outlook for a traditional “peak season” shipping season later this year.
• “By last year, most of the inventory issues have been resolved, and so in the end of 2023 it was slightly ahead of 2019, despite the fact that we had a 13% drop compared to 2022 for the global port tracker,” Hackett shared.
• “All that said, we’re projecting strong growth this year. Import growth approaching about the 10% mark for the U.S. and Canadian ports that we cover.”
• The North America healthcare cold chain logistics market achieved a market size of US$ 6.8 billion in 2023.
• The market is projected to reach US$ 9.8 billion by 2032, with a compound annual growth rate (CAGR) of 4.14% during the forecast period of 2023-2032.
• Growth drivers include increasing demands for cellular therapies and biomarker testing, urgency to reduce wastage and financial losses, and a heightened need for vaccines.
• Healthcare cold chain logistics ensure the integrity and efficacy of temperature-sensitive pharmaceuticals, vaccines, and biologics by using temperature-controlled environments and systems throughout the supply chain.
• The rising demand for these products, along with stringent regulatory environments of FDA and Health Canada, emphasize the necessity for this industry's services.
• The increasing complexity and globalization of pharmaceutical supply chains necessitate robust cold chain logistics for appropriate quality control and traceability.

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: 49 minutes for single transactions, and 75 minutes for double transactions.
• Terminal change to Port Liberty New York.
• An earthquake hit New York City, New Jersey with 4.8 Magnitude on April 5, 20204.
• However, no issues were reported at Maher, Port Liberty, APMT NYC or Greenwich terminal in Philadelphia.
• All other vessels on AL6 will continue to call Maher terminals.

Norfolk:

• Currently, most vessels berth on arrival, however, the bigger vessels wait approx. 2 days for a berth.
• Average gate turn times are 32 / 43 minutes for single and double transactions respectively.
• Berth congestion had relaxed overall but it is expected to worsen after severe weather delays.
• This is mainly for ships arriving from New York later this week.

Charleston Terminal:

• Waiting time for vessel berthing is 10 days at Wando Welch Terminal and 3.5 days at North Charleston Terminal.
• Average truck turn times: 17  minutes at Wando Welch Terminal, and 19 minutes at North Charleston Terminal.
• Dock construction at Wando Welch terminal started on March 11, 2024.
• It is reducing berth space from 3 to 2 berths for one year.
• Berths will be given on a first come, first serve basis.
• This project will also limit the amount of class 1.1 and 1.2 that can be handled at the terminal during this time.

Savannah:

• Waiting time for vessel berth at the terminal is up to 1 day, depending on the size of the vessel.
• Frequent river closures are expected due to fog during this week.
• Average gate turn times are 34 / 53 minutes for single and double transactions respectively.
• Import dwell time is 4.4 days.
• Berth 2 is back online helping to reduce waiting times.

Houston:

• Barbours Cut Terminal has up to 1 day waiting time for vessel berthing. The same goes for the Bayport Container Terminal.
• Bad weather in the Gulf of Mexico continues to cause closures at ports south of Houston and delays on arrival.
• Due to vessel bunching the yard is facing congestion impacting the discharge productivity and extending port stays.
• Average gate turn times at Barbours Cut Container Terminal are 34 / 53 minutes for single and double transactions.
• The gate turn times are 28 / 46 minutes for single and double transactions at Bayport Container Terminal.
• Loaded import dwell is at 3.5 days at Barbour's Cut and 3.3 days at Bayport.

Oakland:

• Average wait time of up to 3 days at Oakland Int’l Container Terminal (OICT) and 1 day at TraPac.
• Average import deliveries can take up to 5.5 days at TraPac and 3.3 days at OICT.
• Average gate turn times are 90 / 74 minutes for OICT and TraPac respectively.
• OICT reported two cranes are non operational.
• 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, Washington United terminal at Tacoma, and Seattle.
• Import deliveries are 2.4 days at Husky – due to EB/WB railcar imbalance, 2.7 days at Washington United Terminal, and 1-3 days at T18.
• The average gate turn times are 24 minutes for T18, 29 minutes for Washington United Terminal, and 65 minutes for HUSKY.
• Terminal 18 and Washington United Terminal will be closed on May 27, 2024.
• Husky Terminal will be open on May 27, 2024, from 07:00 AM to 4:00 PM.

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 2.8 days, on-dock rail dwell is 5.9 days, and import units on the street are averaging at 3.3 / 4.8 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 24 / 52 minutes, depending on the terminal.

Chassis Pools

All pools are operating as normal except:

• Chicago – Constrained on 20’ and 40’ chassis.
• Louisville – Deficit on 40’ chassis
• Pittsburg – Constrained on 40’ chassis.
• Kansas City – Constrained 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, 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.