Freight market update - 30 August 2023

 

From the Editor’s Desk

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Key takeaways for the US

• China's trade within BRICS nations saw a 19% year-on-year growth, reaching about $331 billion, accounting for around 10% of its overall foreign trade.
• Golden Week is approaching in 5 weeks.
• Sea-Intelligence reports that 2-4% of capacity is blanked on the Transpacific route and 6-8% on the Asia-Europe route.
• Trial operations have started on the Yangtze-Huaihe Grand Canal, which connects two major rivers in China.
• The Panama Canal Authority has established a maximum allowable depth, known as draft, of 44 feet for ships passing through the Neopanamax Locks.

Read on for more in-depth updates.
 

Ocean Freight Market Updates

Asia → North America

US/CA

Transpacific Trends and Market Updates

• This holiday leads to the closure of factories and a slowdown in production in China.
• Golden Week, a national holiday celebrated in China, is approaching in 5 weeks.
• The demand for container shipping to and from Asia significantly decreases during this time.
• To balance supply, shipping carriers usually increase blank sailings, where ships skip certain voyages.
• However, due to the absence of a traditional peak season in 2023 and low freight rates, carriers must make more significant capacity adjustments.
• Sea-Intelligence reports that 2-4% of capacity is blanked on the Transpacific route and 6-8% on the Asia-Europe route.
• These percentages are lower than the levels before the pandemic.
• To reach levels similar to those in 2019, 10-13 extra blank sailings are required on the Transpacific route and 6-10 on the Asia-Europe trade.
• With Golden Week just 5 weeks away, carriers have limited time to announce additional blank sailings.
• Last-minute blank sailings would give shippers less time to plan for potential disruptions to their cargo.
• Trial operations have started on the Yangtze-Huaihe Grand Canal, which connects two major rivers in China.
• This canal spans a length of 723 km and serves as a link between the Yangtze and Huaihe Rivers.
• The Yangtze River covers 400 km through southern Anhui province, while the Huaihe River passes through the northern part of the province.
• The construction of this canal, which began in December 2016, incurred a total cost of $12.5 billion.
• China is also working on another significant canal project called the Pinglu Canal.
• The Pinglu Canal is being constructed to connect Nanning, the capital of Guangxi Zhuang autonomous region, to the Beibu Gulf.
• Once completed, the Pinglu Canal will have a length of 134.2 km.
• Expected to be operational by the end of 2026, the Pinglu Canal will enable ships to travel from inland areas to the Beibu Gulf, located near the border with Vietnam, through the Qin Jiang River.
• Amid decreasing demand, the BRICS trade bloc, composed of Brazil, Russia, India, China, and South Africa, is broadening its market presence.
• During a recent summit in Johannesburg, the BRICS group, consisting of these five emerging economies, made a decision to include Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE as new members.
• China and India, due to their substantial trade volumes, have played significant roles in BRICS trade activities.
• China's trade within BRICS nations saw a 19% year-on-year growth, reaching about $331 billion, accounting for around 10% of its overall foreign trade.
• India's trade with BRICS member countries exceeded $100 billion in the previous year.
• The addition of new members to BRICS is expected to increase demand for logistics services across various regions as trade volumes rise.
• Observers in the transportation industry predict that the expansion of BRICS could lead to greater growth and substantial influence in global trade routes and logistics policies, potentially transforming it into a dominant economic bloc by 2050.
• In recent months, shipping companies have extended connections between the Middle East and India and focused on developing intra-Asia networks, reflecting the ongoing diversification of trade within the continent.
• Air cargo capacity between the United Arab Emirates (UAE) and China is undergoing significant expansion to strengthen trade and investment ties.
• An agreement between Beijing Daxing International Airport and the Dubai Multi Commodities Centre (DMCC) aims to create a global model for free-trade zones.
• This move is anticipated to increase commercial opportunities and potentially drive bilateral trade to $200 billion by 2030.
• According to the UN COMTRADE international trade database, Chinese exports to the UAE reached $53.86 billion in the previous year.
• Etihad Cargo recently introduced a service to Ezhou Huahu Airport, a cargo-focused gateway that started operating in July the year before.
• Ezhou Huahu Airport's plan involves establishing 40 domestic freight routes and four international cargo routes by the end of the current year.
• The airport has long-term goals of up to ten international cargo routes and 50 domestic routes by 2025, with an annual cargo and mail throughput of 2.45 million tonnes.
• The UAE holds a crucial role in China's Belt and Road Initiative (BRI), an effort to connect Asia, Africa, and Europe through both land and maritime networks.

 

Conclusions

Rates - The rates will remain soft on most origin-destination combinations.

Space - Space open, no issues with equipment.

Recommendations - We recommend blank sailings to continue. Book at least two weeks before the date your vessel gets ready to depart.

 

Turkey → North America

• The Panama Canal Authority has established a maximum allowable depth, known as draft, of 44 feet for ships passing through the Neopanamax Locks.
• Due to an extended period of dry weather causing low water levels, operational changes were made.
• These adjustments have had an effect on the movement of larger ships destined for the United States.
• The situation has resulted in more than 200 ships being stuck on both ends of the Panama Canal.
• This congestion at the canal has exceeded all historical records in terms of the number of ships affected.
   

Conclusions

Rates - The rates will remain soft on most origin-destination combinations.

Space for capacity - No capacity issues or issues with space.

Space for equipment - No issues with equipment.
 

North America → Turkey

• The Port of Savannah has received four new Super Post-Panamax ship-to-shore (STS) container cranes, as announced by the Georgia Ports Authority.
• These additions bring the total crane fleet at the port to 34.
• The introduction of these cranes aligns with the completion of the Berth 1 improvement project and is expected to contribute to quicker turnaround times for ocean carrier customers.
• This is particularly for the largest vessels visiting the U.S. East Coast.
• Among the four cranes, two have a height of 295 feet, while the other two stand at 306 feet at their highest points.
• They are designed to handle 22 and 24 containers across, respectively.
• The taller cranes will be positioned at Berth 1, while the remaining two will be stationed at Berth 9, located in the upriver section of the terminal.
• These crane installations, in combination with enhancements to the dock infrastructure, are anticipated to augment the annual capacity of the Garden City Terminal by 1.5 million twenty-foot equivalent units (TEUs) of containerized cargo.
• This equipment expansion is part of the port authority's broader infrastructure improvement plan, which has a budget of $1.9 billion and aims to ensure readiness for future supply chain requirements.

Conclusions

Rates - Stable rates over the last week.

Space for capacity - No major capacity or space issue.

Space for equipment - Equipment issues have started owing to low levels of import.

 

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 Global Container Terminals Bayonne and APM Terminals.
• No more waiting time at Maher Terminals LLC.
• Delivery of 2 new cranes at APMT have limited the use of berths. These cranes are capable of reaching 8 high on deck. 2 vessels at anchorage are waiting for berth and the expected waiting time is 3-4 days.
• Average gate turn times: 42 minutes for single transactions, and 78 minutes for double transactions.

 

Norfolk:

• Berth for large vessels is congested due to previous multi-day periods of severe weather.
• Vessels are waiting for 2 days for a berth.
• Average gate turn times are 30 / 44 minutes for single and double transactions respectively.
• All cranes are up and running again.

 

Charleston Terminal:

• 1 day waiting time for vessel berthing at Wando Welch Terminal.
• No waiting time expected at North Charleston Terminal.
• Average truck turn times: 23 minutes at Wando Welch Terminal, and 19 minutes at North Charleston Terminal.

 

Savannah:

• Waiting time for vessel berth at the terminal is up to 4 days, depending on the size of the vessel.
• Average gate turn times are 39 / 56 minutes for single and double transactions respectively.
• Starting Sunday, July 9, 2023 GPA no longer offers a Sunday gate.
• Monday-Saturday gate hours remain the same.

 

Houston:

• Barbours Cut Terminal has up to 1 day waiting time for vessel berthing.
• The average gate turn time is 53 minutes.

 

Oakland:

• Average wait time of up to 2 days at Oakland Int’l Container Terminal (OICT) and up to 3 days at TraPac.
• Average import deliveries can take up to 5 days at TraPac and 4 days at OICT.
• Average gate turn times are 61 / 60 minutes for OICT and TraPac respectively.

 

Seattle-Tacoma:

• Wait time of up to 2 days at Tacoma and 3 days at Seattle.
• Import deliveries are 3 days at HUSKY – due to EB/WB railcar imbalance, 1-5 days at Washington United Terminal, and 1-3 days at T18.
• Availability of rail cars in Union Pacific Rail and BNSF Rail continues to fluctuate weekly.
• Average gate turn times are 43 / 33 / 40 minutes for T18, Washington United Terminal, and HUSKY respectively.
• T18 will be closed on August 25 and September 1, 2023.
• Washington United Terminals will be closed on August 25, 2023.
• Starting June, SSA Terminals T18 (Seattle), will offer a fee-based weekend gate.
• WUT has received 2 new Post Panamax Cranes.
• WUT will commence commissioning both at same time in the next 2 weeks, operational by end of August.

 

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 3.3 days, on-dock rail dwell is 3.0 days, and import units on the street are averaging at 4.5 /6.1 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 23-56 minutes, depending on the terminal.
• Chassis Pools: All pools are operating as normal.
• 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

Range	Port	Vessels at Anchor	Vs Last Week	Waiting Time	Vs Last Week
PNW	Vancouver	3	+1	7	-1
PNW	Seattle	0	0	0	0
PSW	Oakland	2	0	3	0
PSW	LA/LB	0	0	0	0
USEC	New York	0	0	0	0
USEC	Norfolk	2	+1	1	0
USEC	Charleston	0	0	0	0
USEC	Savannah	11	+4	4	+1
USGC	Miami	0	0	0	0
USGC	Houston	0	0	0	0

 

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.