Freight market update - 5 June 2024

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• Port of Baltimore has returned to 50ft draft and MV DALI has been removed from the channel.

• Port congestion is high across the US, with some improvements noted on the US West Coast.

• Carriers are increasing spot rates by selecting higher-paying cargo, amending contracts, charging guaranteed space premiums, or adjusting space allocations.

• The container shipping industry has surpassed 4 million TEUs in terms of ultra-large container ships (ULCS).

• Shippers and carriers were caught unprepared for the sudden demand surge in the Asia-North Europe trade, resulting in space shortages and surging spot rates.

• Singapore, the world's second-busiest container port, is facing severe congestion, causing significant shipping delays.

• Asian ports are heavily congested, with Southeast Asia and Northeast Asia accounting for 26% and 23% of global bottlenecks, respectively.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• In BNCT, both T/S inventory and yard utilization levels are maintained at a healthy level.
• Today (29 May), laden yard density is around 68%, and CMA T/S inventory is around 8.6k TEUs. Overall, the situation has been good in the last few days without congestion.
• However, with the foreseen bunching arrival of incoming vessels (late from SHA/TAO), heavy berth congestion is expected again, with an average waiting/delay of around 1-1.5 days from next week.
• Periodic maintenance of ARMG blocks started from 07 May and is expected to be finished by the end of September.
• There will be a minor impact on yard utilization in the coming days as the overall yard capacity is reduced by 1800-2000 TEUs during the period.
• Demand has spiked in June and July due to restocking activities.
• Retailers have increased their buffer stock to prepare for longer voyages.
• Additionally, some retailers are anticipating a peak season, prompting them to book orders in advance.
• Exacerbating the crunch is the fact that the three alliances are still short of 36 ships to fully operate their 25 Asia-Europe loops.
• Continuing port congestion issues are delaying vessels, with 5.7% of the global container fleet capacity tied up in congestion in April, according to Sea Intelligence.
• New GRIs are expected to materialize in the coming weeks.
• Carriers are increasing spot rates by selecting higher-paying cargo, amending contracts, charging guaranteed space premiums, or adjusting space allocations.
• The Baltic Air Index (BAI) indicates that average spot rates from China to the U.S. are up 34% from last year, while rates from China to North Europe are up 41%.
• Hong Kong and Shanghai also saw significant rate hikes of up 12.3% and 41.5% year-over-year, respectively.
• Disruptions in ocean shipping due to vessel diversions around South Africa have increased trade between South Asia, the Middle East, and Europe.
• BAI reported that average rates from the Middle East and South Asia origins to Europe were 119% higher in mid-May than in the same period in 2023.
• Singapore, the world's second-busiest container port, is facing severe congestion, causing significant shipping delays.
• According to Linerlytica, containerships must wait up to seven days to berth in Singapore, resulting in up to 450,000 TEUs being held up.
• The bottlenecks are mainly caused by vessel diversions from the Red Sea crisis and shipping lines bypassing less busy ports like Malaysia's Port Klang.
• Asian ports are heavily congested, with Southeast Asia and Northeast Asia accounting for 26% and 23% of global bottlenecks, respectively.
• Linerlytica expects port congestion to worsen in June.
• Port congestion is also placing a significant upward pressure on rates ahead of planned rate hikes for 1 June and 15 June by the shipping lines.
• Nearly 2 million TEUs are currently tied up by congestion globally, the equivalent of almost 7% of the world’s shipping fleet.

Turkey → North America

• The container shipping industry has surpassed 4 million TEUs in terms of ultra-large container ships (ULCS).
• While growth is expected to slow between now and 2028, environmental regulations will significantly influence the fleet's future composition.
• As energy and CO2 emissions become major cost drivers, carriers seek economies of scale, consolidating smaller loops to larger ones, such as merging the 8,000 TEU to the 14,000 TEU services.
• Alphaliner analyst Jan Tiedemann pointed out that 14,000-16,000 TEU vessels can now access most ports globally following infrastructure improvements in the last ten years.
• Tiedemann explained that ULCSs are made for long-distance routes from the Far East to the U.S. East Coast via the Suez or the Cape of Good Hope.
• Operating larger ships reduces costs per TEU transported, and the larger ships are also well suited for multi-port calls rather than a single-call system.
• “Contrary to the US West Coast, the US East Coast typically has three to four calls, rather than one to two. Single calls (Asia - LA - Asia) pose the problem that 36,000 TEU (18,000 TEU out / 18,000 TEU in) would have to be moved in one week max, otherwise the ship will block the berth for its fleet mate on the next voyage,” said Tiedemann.

North America → Turkey

• Containers currently on the water will be discharged and BL terminated at POD Norfolk. For any ad hoc inland delivery required to Baltimore, please contact the Import Customer Service team.
• Inlands will be invoiced at cost. No barge solution can be provided until further notice.
• Containers still at quay or yet to be ingated in Asia can load to alternative POD Norfolk or New York.
• Bookings would be rated as per existing Norfolk/New York contract rate.
• For any ad hoc inland delivery required to Baltimore, we can quote rates as per public tariff.
• No barge solution can be provided until further notice.
• Port of Baltimore has returned to 50ft draft and MV DALI has been removed from the channel.
• Awaiting confirmation from Evergreen (TWS) and Maersk (AMERICAS) on 1st date of service restoration to Baltimore.
• Capacity remains tight across all Asia-USA routes, with significant constraints expected to persist.
• The strong demand is driven by peak season preparations and restocking activities.
• Increases in rates are noted for the first half of June, with spot rates seeing substantial hikes.
• As airlines prepare for the peak summer travel season, the introduction of additional belly capacity has not dampened demand for air cargo, and prices from Asia to the U.S. and Europe remain elevated.
• The unexpected demand is similar to the early peak season occurring on the Asia-Europe and Trans-Pacific routes for container shipping, with e-commerce taking up all available air capacity from Asia.
• According to Willie Walsh, director general of the International Air Transport Association (IATA), global air freight demand grew by 11.1% at the start of Q2.
• Usually, late spring is a slower season for air cargo, but this year, high e-commerce demand in the U.S. and Europe keeps volumes and rates high.
• Industry expectations are that summer volumes from Asia will balance out the added capacity.

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: 52 minutes for single transactions, and 77 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 / 45 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:

• Continue to experience delays due to toe wall construction, Cargo spill on Week 20, and port system outage.
• On May 29, the South Carolina Port Authority had 14 ships at anchor up to 10 days waiting time at Wando Welch Terminal and 2 days at North Charleston Terminal.
• In response to the congestion, 14 ships are omitting and 11 calling the North Charleston Terminal.
• The South Carolina Port Authority expects the waiting time to dwindle down to 2-3 days over the next two to three weeks.
• Average truck turn times: 17  minutes at Wando Welch Terminal, and 19 minutes at North Charleston Terminal. 

Savannah:

• Waiting time for vessel berth at the terminal is up to 2 days, 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 3.6 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 / 54 minutes for single and double transactions.
• The gate turn times are 28 / 47 minutes for single and double transactions at Bayport Container Terminal.
• Loaded import dwell is at 3.5 days at Barbour's Cut and 3.4 days at Bayport.

Oakland:

• Average wait time of up to 2 days at Oakland Int’l Container Terminal (OICT) and 1 day at TraPac.
• Average import deliveries can take up to 5.2 days at TraPac and 3.3 days at OICT.
• Average gate turn times are 90 / 75 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 2.5 days at Husky – due to EB/WB railcar imbalance, 1.9 days at Washington United Terminal, and 1-3 days at T18.
• The average gate turn times are 20 minutes for T18, 30 minutes for Washington United Terminal, and 145 minutes for HUSKY.
• Terminal 18 will be closed on June 7, 2024.
• Husky will have a Saturday gate on June 1, 2024.

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 2.9 days, on-dock rail dwell is 5.7 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 25 / 52 minutes, depending on the terminal.

Chassis Pools

All pools are operating as normal except:

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