Freight market update - 31 July 2024

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• The Global Freight Forwarding 2024 Report by Ti insight indicated a -1.3% contraction in market performance, in real terms.

• Air freight forwarding dropped by -2.1%, while sea freight forwarding fell by -0.6%.

• The Port of Long Beach is set to expand its rail yard through a $1.5 billion project called "America's Green Gateway."

• Rail capacity will increase from 12 to 48 tracks, and daily train operations will rise from seven to 17.

• Container shipping capacity has risen by 1.6 million TEU since the start of 2024, an 11% year-over-year increase to 29.5 million TEU.

• The 12,000-17,000 TEU ship segment has seen the most significant expansion, now accounting for 22% of the container fleet.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Recent weeks have seen an intensification of attacks in the Red Sea, with a broader area of effect.
• Mid-month, rocket attacks targeted two oil tankers and two separate merchant vessels.
• Alarmingly, an attack on the port of Tel Aviv marked an expansion into the Eastern Mediterranean.
• According to the Defence Intelligence Agency, Houthi attacks have caused a 90% reduction in Red Sea container throughput since the conflict began.
• The increased risk has driven war-risk insurance premiums up to between 0.7% and 1% of a ship's total value, compared to less than 0.1% before the conflict.
• Lars Jensen, CEO of Vespucci Maritime, highlighted that the expanded range of Houthi capabilities now threatens not only the southern Red Sea but potentially the entire waterway.
• Shanghai (SHA): Recent typhoon has led to flight cancellations, causing a backlog that is expected to be cleared by mid-week.
• The market in Shanghai is stable, with steady bookings.
• Shipping rates have remained stable, with only minor fluctuations.
• It is advised to book space at least one week in advance.
• Ningbo (NGB): Shipping rates in Ningbo have been stable, and the market remains steady.
• It is recommended to frequently check space availability and spot rates.
• For the first half of August, FAK rates from India have increased, and Named Account Contracts (NACs) are now subject to a Peak Season Surcharge (PSS).
• Heavy congestion is reported at transshipment ports such as Singapore and Colombo.
• Importers are dealing with high demurrage charges, with Chittagong port yards now utilizing 80% of their space due to congestion.
• The government is considering waiving demurrage charges to help ease the burden on businesses.
• There is a notable imbalance in container equipment, with 20ft containers being more common for imports and 40ft containers being predominantly used for exports in Bangladesh.
• In South India, carriers are facing challenges with equipment availability due to transshipment issues in Colombo.
• The overall equipment situation is showing slight improvement, but challenges persist.

Turkey → North America

• The global freight forwarding market experienced a decline in 2023.
• The Global Freight Forwarding 2024 Report by Ti insight indicated a -1.3% contraction in market performance, in real terms.
• This downturn was caused by a global economic slowdown, shifts in consumer behavior, and an oversupply issue.
• Air freight forwarding dropped by -2.1%, while sea freight forwarding fell by -0.6%.
• Thomas Cullen, Chief Analyst at Ti, noted that this decline reflected the unpredictability of broader market trends in air and sea freight.
• Between 2020 and 2022, the industry saw significant growth, with large forwarders seeing a 50% revenue increase and profits doubling.
• However, 2023 marked a return to normality, with both revenues and profits decreasing.
• Cullen described the market as remaining complex, with events like the Suez Canal blockage affecting different freight providers differently.
• There has also been instability between non-asset-based service providers, like freight forwarders, and asset owners, such as airlines and shipping lines.
• Despite a significant contraction, the Asia-Pacific region remains the largest market, holding 35% of the global market share.
• The global freight forwarding market is projected to see a modest growth of 1.7%, in real terms, in 2024.
• Container shipping capacity has risen by 1.6 million TEU since the start of 2024, an 11% year-over-year increase to 29.5 million TEU.
• Niels Rasmussen, chief shipping analyst at BIMCO, noted this as the fastest growth in 15 years.
• The 12,000-17,000 TEU ship segment has seen the most significant expansion, now accounting for 22% of the container fleet.
• This segment's capacity has grown by 25% year-over-year in the first half of 2024.
• Shipowners have shifted away from ordering vessels over 17,000 TEU due to their operational limitations to ports in Asia and Europe.
• The current fleet already adequately services most of these major trade lanes.
• By the end of 2024, the total container fleet capacity is expected to reach 30 million TEU.
• An additional 4.3 million TEU will be added by 2027.
• Cargo volume growth is not expected to keep pace with this expansion, leading to an anticipated increase in ship recycling.
• The eventual reopening of the Red Sea and Suez Canal routes will likely reduce the demand for ships, Rasmussen added.

North America → Turkey

• The Port of Long Beach is set to expand its rail yard through a $1.5 billion project called "America's Green Gateway."
• This expansion will triple the port's rail cargo capacity, linking it to 30 major rail hubs across the United States.
• The project's goal is to enhance rail operations and reduce dependence on cargo trucks, thereby cutting environmental impacts, traffic congestion, and air pollution.
• U.S. Transportation Secretary Pete Buttigieg stated that the expansion will build a rail network capable of moving nearly 5 million containers annually.
• Rail capacity will increase from 12 to 48 tracks, and daily train operations will rise from seven to 17.
• The project includes a depot accommodating up to 30 trains and the ability to assemble trains up to 10,000 feet long.
• Each train will be able to replace the cargo of 750 truck trips.
• The Port of Long Beach aims for 35% of containers to be moved by on-dock rail.
• The expansion project is slated for completion by 2032.
• A potential nationwide rail strike in Canada has led to some intermodal rail freight being diverted to the U.S., as reported by Canadian National Railway (CN).
• The dispute with the Teamsters Canada Rail Conference (TCRC) has resulted in rerouted vessels and fewer loads at Canadian ports.
• Prince Rupert experienced lower volumes than anticipated due to the labor dispute.
• A potential strike was postponed in May as the Canadian Industrial Relations Board (CIRB) began investigating its impact on essential public services.
• A decision from the CIRB is expected by August 9, during which time no work stoppages can occur.

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 3 days is expected at Port Liberty Terminal Bayonne.
• Average gate turn times are 46 minutes for single transactions and 71 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 44 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 17 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.
• 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 2 days, depending on the vessel's size.
• Average gate turn times are 33 minutes for single transactions and 54 minutes for double transactions.
• Import dwell time is 3.4 days.

Houston:

• There is up to a 1 day waiting time for vessel berthing at Barbours Cut Terminal and 2 days at Bayport Container Terminal.
• Average gate turn times at Barbours Cut Container Terminal are 41 minutes for single transactions and 64 minutes for double transactions.
• Average gate turn times at Bayport Container Terminal are 35 minutes for single transactions and 58 minutes for double transactions.
• Loaded import dwell time is 3.8 days at Barbours Cut and 3.7 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 5.7 days at TraPac.
• Average import deliveries can take 3.2 days at OICT.
• Average gate turn times are 90 minutes at OICT and 82 minutes at TraPac.

Seattle-Tacoma:

• There is a 17 day waiting time at Husky Terminal and 7 days at Washington United Terminal in Tacoma.
• There is no waiting time in Seattle.
• Import rail dwell times are 6 days at Husky Terminal.
• Import rail dwell times are 6.7 days at Washington United Terminal.
• Import rail dwell times are 1-3 days at Terminal 18 (T18).
• Rail Car supply is in severe deficit causing higher import rail dwell times. Potential relief expected for early to mid-August.
• Average gate turn times are 41 minutes at T18.
• Average gate turn times are 28 minutes at Washington United Terminal.
• Average gate turn times are 135 minutes at Husky Terminal.
• T18 will be closed July 26 and 29, 2024.
• Husky Terminal will have hoot gates on July 30,31 and August 1,2, 2024.

Los Angeles/Long Beach:

• Port of Los Angeles dwell time for local import cargo is 3.3 days.
• On-dock rail dwell time at Port of Los Angeles is 4.7 days.
• Import units on the street at Port of Los Angeles are averaging 3.8 days for 20 ft containers and 5.9 days for 40+ ft containers.
• Average terminal gate turn time at Port of Long Beach is between 23 and 85 minutes, depending on the terminal.

Chassis Pools

All pools are operating as normal except:

• Columbus - Deficit on 40’ chassis.
• Louisville - Deficit on 20’ chassis.
• Memphis - Constrained on 40’ chassis.
• Pittsburg - Constrained on 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.

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.