Freight market update - 5 February 2025

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• Global port congestion eased last week as port activity across Far East Asia slowed down due to the Chinese New Year holidays.

• Since September, shipments via the United States West Coast (USWC), where carriers handle inland rail arrangements, have experienced longer dwell times before loading.

• Vessel diversions due to the Suez Canal situation, adverse weather in Asia and Latin America, and an early peak season on Asia trade routes are leading to severe congestion at major transshipment ports.

• Since December 15, 2023, most maritime carriers have been avoiding the Suez Canal due to attacks on container vessels launched from a part of Yemen.

• The shipping industry is undergoing major changes in 2025 with the dissolution of the 2M Alliance between MSC and Maersk.

• MSC has partnered with ZIM for a vessel-sharing agreement on the Trans-Pacific lane and with Premier Alliance for the Asia–Europe route.

• November capacity has increased by 8% to both the West Coast and East Coast compared to October.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Global port congestion eased last week as port activity across Far East Asia slowed down due to the Chinese New Year holidays.
• So far, there have been minimal disruptions reported in the transition to the new Alliance networks, which began on 1 February and will impact 6 out of the Top 10 carriers.
• However, with a significant number of blanked sailings planned for the first two weeks of February, the full impact of the transition will only become clear by mid-February.
• The slack season has begun following China’s Golden Week holiday, but carriers have not announced any winter deployments to reduce capacity.
• Instead, November capacity has increased by 8% to both the West Coast and East Coast compared to October.
• Demand remains steady, likely due to companies mitigating risks ahead of the January 15 deadline for East and Gulf Coast labor negotiations.
• Despite a slow decline, freight rates remain elevated compared to pre-pandemic levels.

Port Congestion & Cargo Diversions

• Major Chinese transshipment hubs like Shanghai and Ningbo are experiencing significant congestion.
• Ports such as Shekou and Yantian are currently operating more smoothly.
• Carriers are seeing increased demand for services via the USWC due to:
• Extended transit times through the Cape of Good Hope.
• Cargo diversions resulting from the recent ILA strike at USEC and USGC ports.

USWC & USEC Port Volumes

• USWC port volumes have risen by approximately 16-20% compared to the same period in 2023.
• Congestion at Asian ports, USWC ports, and some USEC ports like Charleston is impacting schedule reliability.
• These disruptions may lead to blank sailing weeks.
• Major Asian transshipment ports—Busan, Shanghai, Ningbo, and Singapore—are facing delays of 14–21 days due to increased transshipment activity.
• Some carriers have shifted to alternative transshipment hubs in Malaysia, India, and Colombo.
• This shift has led to congestion at these alternative ports as well.

Rate Increases & Service Disruptions

• Monthly rate increases to the Middle East are being driven by service instability and tight vessel space.
• Space from USEC and USGC ports to India and Middle East (ME) trades is significantly impacted by piracy risks in the Suez Canal.
• Due to these risks, carriers are rerouting via the Cape of Good Hope, increasing transit times and blank sailings.
• Most services to Red Sea ports are suspended, leading to congestion at West Mediterranean hubs.
• Limited service continues to Persian Gulf ports, with Jebel Ali port omissions ongoing since January 2024.
• Congestion at Southeast Asian and Jebel Ali ports is forcing carriers to use alternative hubs like Abu Dhabi, Mundra, and Colombo.
• These alternative hubs are now also experiencing congestion.

Turkey → North America

• The ceasefire between Israel and Hamas has reduced immediate risks in the Red Sea.
• Despite this, carriers remain cautious about resuming Suez Canal transits due to:

1. Safety concerns.
2. Higher toll fees.
3. Increased insurance costs.

• Traffic continues to be routed via the Cape of Good Hope for now.

Northern Europe Port Congestion

• Major ports in Northern Europe, such as Rotterdam and Hamburg, are experiencing congestion.
• This congestion could worsen if further disruptions occur.
• Even if carriers shift back to the Suez, reorganizing schedules will take time, as 10% of global shipping capacity is currently diverted via the Cape route.
• Rates have continued their decline into February, with carriers lowering prices to secure cargo before the Lunar New Year.
• February rates are projected to drop further due to oversupply, potentially falling below current benchmarks.
• The market remains oversupplied, with scrapping efforts only accounting for a 6–8% reduction in capacity.
• This supply-demand imbalance persists despite carrier attempts to manage capacity.

Potential Effects of a Red Sea Route Reopening

• Port congestion in Asia and Europe due to vessel bunching.
• Temporary rate increases followed by long-term declines as capacity stabilizes.
• Carriers are closely monitoring stability before fully capitalizing on the route.
• Schedule reliability has improved month-over-month, now exceeding 50% for Asia-Europe routes.
• New shipping alliances are set to begin operations in February, bringing potential changes to service offerings and rate dynamics.

North America → Turkey

• On October 3, 2024, after three days of strikes at the United States East Coast (USEC) and United States Gulf Coast (USGC) ports, the International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) reached a tentative wage agreement.
• The Master Contract has been extended until January 15, 2025, allowing further negotiations on wage increases, benefits, and port automation limits.
• The ILA is particularly concerned about automation's impact on job security, fearing job losses due to increased automation.
• They are also advocating for improved health and retirement benefits for their members.
• The contract covers most U.S. East and Gulf Coast ports and aims to establish a new six-year agreement.

West Coast Shipping & Congestion

• Since September, shipments via the United States West Coast (USWC), where carriers handle inland rail arrangements, have experienced longer dwell times before loading.
• Many shippers, who rerouted cargo to the West Coast to avoid East and Gulf Coast disruptions, plan to continue this strategy until a final agreement is reached.
• Relief from West Coast congestion is unlikely soon, as railcar shortages are causing containers to pile up at terminals, disrupting the first-in-first-out system.

Port Congestion

• Vessel diversions due to the Suez Canal situation, adverse weather in Asia and Latin America, and an early peak season on Asia trade routes are leading to severe congestion at major transshipment ports.
• In Asia, ports like Shanghai, Ningbo, and Singapore are experiencing heavy congestion.
• In Latin America, key ports such as Santos and Manzanillo are facing similar backlogs.
• The West Mediterranean region is also affected, with ports like Valencia and Algeciras encountering significant delays.
• In North America, the combination of an early peak season and cargo diversions from the East Coast to the West Coast due to the ILA strike is worsening congestion, especially at Los Angeles and Long Beach ports.
• These disruptions are affecting carriers' schedule reliability, which has declined by 10% year over year, according to Sea Intelligence.

Suez Canal Disruptions

• Since December 15, 2023, most maritime carriers have been avoiding the Suez Canal due to attacks on container vessels launched from a part of Yemen.
• Ships are now rerouting around the Cape of Good Hope, adding an average of 14 days to transit times.
• This extended route significantly impacts global shipping, affecting not just Red Sea trade but also all major trade lanes.
• Blank sailings and service changes may persist, with an estimated 6–9% of global shipping capacity being absorbed by this alternative routing.

Shipping Alliance Updates

• The shipping industry is undergoing major changes in 2025 with the dissolution of the 2M Alliance between MSC and Maersk.
• MSC has partnered with ZIM for a vessel-sharing agreement on the Trans-Pacific lane and with Premier Alliance for the Asia–Europe route.
• Hapag-Lloyd is set to join a new alliance with Maersk in February 2025, called the Gemini Cooperation, marking the end of its collaboration with ACL and adjustments to port calls.
• The Gemini Cooperation aims to enhance schedule reliability using a hub-and-spoke model, though its success will depend on transshipment efficiency.
• Meanwhile, the Ocean Alliance (ONE/Yang Ming Line/Hyundai Merchant Marine) has extended its agreement until 2032, providing some stability in an otherwise shifting industry landscape.

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:

• 2.5 days waiting time expected for APMT, 0.5 days waiting time at Maher Terminals, and up to 4.5 days at Port Liberty Terminal Bayonne.
• Average gate turn times are 45 / 72 minutes for single and double transactions respectively.
• APMT - new cranes arrived and are in process of being commissioned.
• Berth space will still be limited but 2 vessels will now be able to be worked simultaneously.
• APMT and Maher Terminals will be open on Martin Luther King Day on January 20, 2025.

Norfolk:

• Waiting time for a berth is up to 1.8 days this week.
• Average gate turn times are 36 minutes for single transactions and 53 minutes for double transactions.
• One crane is out of service.
• However, it is expected to be back working next month.

Charleston Terminal:

• 5 days waiting time for Wando Welch Terminal and 1.5 days for North Charleston Terminal.
• Average truck turn times are 18 minutes at Wando Welch Terminal and 21 minutes at North Charleston Terminal.
• Average truck turn time at Leatherman is 16 minutes.

Savannah:

• The average waiting time for vessel berth at the terminal is 5 days for class 1 and class 2 vessels.
• Average gate turn times are 32 minutes for single transactions and 53 minutes for double transactions.
• Import dwell time is 4.0 days.
• Rail dwell time is 1.7 days.

Houston:

• Up to 1 day waiting time for vessel berthing at Barbours Cut Terminal and 1 day waiting time at Bayport Container Terminal.
• Average gate turn times at Barbours Cut Container Terminal are 41 minutes for single transactions and 61 minutes for double transactions.
• Average gate turn times at Bayport Container Terminal are 39 minutes for single transactions and 62 minutes for double transactions.
• Loaded import dwell is 3.9 days at Barbours Cut and 3.8 days at Bayport.

Oakland:

• Average import deliveries can take up to 7.6 days at TraPac and 4 days at OICT.
• TraPac has 1900 units out of stock and not available for pick up.
• They are seeing a lot of appointments not being fully used.
• Average gate turn times are 90 minutes at OICT and 89 minutes at TraPac.
• The Port of Oakland has started a bollard and fender replacement project at OICT.
• The Port of Oakland has started a bollard and fender replacement project at OICT, starting with Berth 55 through Berth 59.
• The project is expected to finish at the end of February 2025.
• Berths 55, 56 and 57 are now complete, work has moved to Berth 58.

Seattle-Tacoma:

• 5 days waiting time at Husky and 0.5 days at Washington United terminal at Tacoma.
• No waiting time in Seattle.
• Import rail dwell are 3.7 days at Husky, 4.6 days at Washington United Terminal, and 3 days at T18.
• The average gate turn times are as follows: 34 minutes for T18, 25 minutes for Washington United Terminal, and 64 minutes for Husky.
• Effective January 6, 2025, T18 has moved to a 5 day a week operation.
• Gates are open 8am to 4:15pm. Subject to change.
• Husky is offering continuous hoot gates.
• Next week’s gates will be January 27, 28, 29 and 30, 2025.

Los Angeles/Long Beach:

• Port of Los Angeles dwell time for local import cargo is 3.4 days.
• On-dock rail dwell is 6.3 days.
• Import units on the street are averaging at 4.8 / 6.6 days for 20 ft and 40+ ft containers respectively.
• Port of Long Beach dwell times for local imports remain at 4-8 days.
• The average terminal gate turn time is between 21-61 minutes, depending on the terminal.

Chassis Pools

All pools are operating as normal except:

• Minneapolis / St. Paul - Deficit on 40’ chassis.
• Chicago – Constrained on 20’ and 40’ chassis.
• Cincinnati - Constrained on 40’ chassis.
• Cleveland – Deficit on 20’ and 40’ chassis. 
• St. Louis - Constrained 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, 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.