Freight market update - 3 July 2024

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• A group of U.S. manufacturers, distributors, retailers, and trade organizations is urging the Biden administration to help resume stalled contract negotiations between the International Longshoremen’s Association (ILA) and maritime employers.

• U.S. container import volumes continued to rise in May, increasing by 5.6% compared to the previous year, although this growth rate was smaller than in the preceding three months.

• In May, 1.93 million TEUs were handled, which was 1% higher than in April and marked the highest volume of U.S. imports in 21 months. However, it was 15.5% lower than May 2021.

• General cargo volumes saw a 13% increase compared to a 10% growth in special products such as perishables, dangerous goods, high tech, and pharma from January to May this year.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• General cargo volumes saw a 13% increase compared to a 10% growth in special products such as perishables, dangerous goods, high tech, and pharma from January to May this year.
• Cross-border e-commerce traffic and freight conversions from ocean to air due to disruptions in container shipping drove faster growth in general cargo.
• The overall air cargo market grew by 12% year-over-year.
• Asia-Pacific and Middle East & South Asia experienced the largest growth in chargeable weight during the first five months of 2024.
• Special cargo constituted approximately 35% of the total market, with regional variations.
• Hong Kong showed the fastest growth as an origin for air cargo, followed by Southeast China, East China, India, and UAE.
• Market shares for the largest forwarders remained stable at 25% in May, compared to 26% a year ago.
• Freighter volumes increased by 6%, while cargo carried by passenger operators and mixed fleets registered a 13% increase.
• Space remains highly constrained across many markets in July, particularly on routes out of Asia, notably the Transpacific trade route, despite carriers adding capacity.
• The global fleet has reached a historic level of 30 million TEUs, with an increase of 10 million TEUs over the past seven years. Despite this, vessels are fully booked for the entire month of July.
• Port congestion continues to pose challenges, with ongoing issues in Singapore and Colombo impacting feeder vessel connections.
• The rail solution from China remains 40% more expensive than ocean freight but has seen a significant increase in volumes month-on-month.
• Approximately 90% of these volumes consist of high-value commodities, with the remaining 10% comprising urgent shipments.

Turkey → North America

• Cosco has issued warnings to customers about port congestion in Germany, Netherlands, and Belgium. They have introduced a per-container fee for sailings to and from Hamburg, Bremerhaven, Wilhelmshaven, Rotterdam, and Antwerp due to current handling challenges and infrastructure limitations. Cosco anticipates no near-term improvements.
• Port congestion at several key ports is attributed to container carriers rescheduling sailings amid threats of attacks by Houthi militants in the Red Sea. This has resulted in fewer port calls and increased delays.
• In contrast, CMA CGM is responding to the summer peak season by increasing capacity on routes from China to Europe.
• They plan to deploy seven additional 7,000-TEU vessels on routes serving Northern Europe and the Mediterranean.
• Recent data from the US Census Bureau for April 2024 indicated stable sales and inventory levels, failing to forecast the sudden spike in container bookings observed in May.
• This unexpected surge in demand has caused big disruptions in the market.
• The market to the USA remains highly active, characterized by high demand and tight space availability. Rates have continued to rise across all sectors, notably with sharp increases in FAK (Freight All Kinds) rates.
• While congestion has slightly improved, it remains a persistent issue at several ports, impacting operations.

North America → Turkey

• A group of U.S. manufacturers, distributors, retailers, and trade organizations is urging the Biden administration to help resume stalled contract negotiations between the International Longshoremen’s Association (ILA) and maritime employers.
• The current six-year contract between the union representing 45,000 dockworkers on the U.S. East and Gulf coasts and the United States Maritime Alliance (USMX) expires on September 30.
• Negotiations stalled after the ILA claimed Maersk broke contract rules by adding an auto-gate system at its APM Mobile container terminal.
• A letter signed by around 160 organizations, including the U.S. Chamber of Commerce, the National Association of Manufacturers, and the National Retail Federation, appealed to the White House for support.
• The letter cited concerns over “disruption to port operations and cargo fluidity.”
• The NRF made a similar request to the White House in January.
• U.S. container import volumes continued to rise in May, increasing by 5.6% compared to the previous year, although this growth rate was smaller than in the preceding three months.
• In May, 1.93 million TEUs were handled, which was 1% higher than in April and marked the highest volume of U.S. imports in 21 months. However, it was 15.5% lower than May 2021.
• May is typically the busiest month for U.S. inbound volumes and global container volumes as retailers prepare for the holiday season by stocking up on inventories, according to shipping analyst John McCown.
• U.S. East Coast ports saw an 11.8% increase in imports, while West Coast ports saw no change.
• However, the trend of shipping to East/Gulf Coast ports could reverse in June, particularly for shipments originating in Asia, due to the 17-day longer transit time compared to shipping via West Coast ports.
• U.S. exports also grew by 4.9% year-over-year in May, with Houston and Los Angeles being the preferred gateways for U.S. exporters.

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.
• A 0.5-day wait is expected at APM Terminals.
• Waiting time of up to 3 days is expected at Port Liberty Terminal Bayonne.
• Average gate turn times are 40 minutes for single transactions and 65 minutes for double transactions.

Norfolk:

• Currently, most vessels berth on arrival.
• Bigger vessels wait approximately 2 days for a berth.
• Average gate turn times are 32 minutes for single transactions and 46 minutes for double transactions.
• Berth congestion has eased.

Charleston Terminal:

• Currently, there are 12 ships at anchor.
• Omissions from all carriers are slightly reducing the extent of the delays, but there is still up to an 8-day delay this week.
• A slight decrease to a 4-6 day delay is expected next week.
• A section of berth 3 will temporarily re-open around week 26, allowing a third ship, up to 900 feet, to work while berths 1 and 2 are occupied.
• The toe wall construction will be paused around the July 4th holiday for two weeks, allowing normal operations in all three berths to clear the anchorage.
• With these measures and the omissions, the wait should be down to 4-6 days by the end of June.
• The wait should be reduced to a maximum of 1-2 days by the end of July.
• Average truck turn times are 24 minutes at Wando Welch Terminal and 19 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.
• Berths will be given on a first-come, first-serve basis during this construction period.

Savannah:

• The waiting time for a vessel berth at the terminal is up to 1 day, depending on the vessel's size.
• Average gate turn times are 38 minutes for single transactions and 55 minutes for double transactions.
• Import dwell time is 4.0 days.

Houston:

• There is up to a 1-day waiting time for vessel berthing at Barbours Cut Terminal.
• There is a 2-day waiting time for vessel berthing at Bayport Container Terminal.
• The Houston Ship Channel had intermittent closures from June 18 to June 20, 2024, due to high winds and rain from Tropical Storm Alberto.
• Average gate turn times at Barbours Cut Container Terminal are 39 minutes for single transactions and 59 minutes for double transactions.
• Average gate turn times at Bayport Container Terminal are 35 minutes for single transactions and 59 minutes for double transactions.
• Loaded import dwell time is 3.6 days at Barbours Cut.
• Loaded import dwell time is 3.5 days at Bayport.

Oakland:

• The average wait time is up to 1 day at Oakland International Container Terminal (OICT).
• The average wait time is 2 days at TraPac.
• Average import deliveries can take up to 5.0 days at TraPac.
• Average import deliveries can take 3.2 days at OICT.
• Average gate turn times are 90 minutes at OICT.
• Average gate turn times are 76 minutes at TraPac.
• The Port of Oakland has started a bollard and fender replacement project at OICT, beginning with Berth 55 through Berth 59.
• The project is expected to last into Q1 of 2025.

Seattle-Tacoma:

• There is a 3-day waiting time at Husky Terminal.
• There is up to a 3-day waiting time at Washington United Terminal in Tacoma.
• There is a 2-day waiting time in Seattle.
• Import rail dwell times are 3.7 days at Husky Terminal.
• Import rail dwell times are 6.1 days at Washington United Terminal.
• Import rail dwell times are 1-3 days at Terminal 18 (T18).
• Rail car supply is in severe deficit over the next couple of weeks in Tacoma, causing higher import rail dwell times.
• Average gate turn times are 32 minutes at T18.
• Average gate turn times are 33 minutes at Washington United Terminal.
• Average gate turn times are 96 minutes at Husky Terminal.
• Husky Terminal will no longer offer flex gate but will offer Hoot gates Tuesday through Thursday, effective June 25, 2024, for 3 months.
• Washington United Terminal is limiting their operations to a maximum of 3 gangs on vessels and 1 berth operation until further notice due to a lack of rail cars to evacuate imports.

Los Angeles/Long Beach:

• Port of Los Angeles dwell time for local import cargo is 2.8 days.
• On-dock rail dwell time at Port of Los Angeles is 3.4 days.
• Import units on the street at Port of Los Angeles are averaging 3.1 days for 20 ft containers.
• Import units on the street at Port of Los Angeles are averaging 5.0 days for 40+ ft containers.
• Port of Long Beach dwell times for local imports are stable.
• Average terminal gate turn time at Port of Long Beach is between 22 and 65 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.