Freight market update - 5 September 2024

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• In a Xeneta and Tiaca webinar, it was reported that dynamic load factors in July from Asia Pacific to Europe reached 86%, and 88% to North America, which is unusually high for this time of year.

• Canadian truck rates have remained high following the brief shutdown of the country's freight railroads, which pushed more freight into trucks.

• Spot market rates saw double-digit increases in lanes between U.S. West Coast ports and Central Canada, while spot market load volumes spiked by over 30%.

• A planned strike at India's major ports was averted after workers accepted a new five-year contract, canceling the walkout scheduled for August 28.

• Nearly 20,000 workers were set to strike, but unions agreed to an 8.5% pay raise over five years, lower than their initial 10.6% demand.

• Seattle's average IPI dwell time is 10 days before departure from the port of discharge, similar to Los Angeles and Long Beach, where a surge in imports is causing delays.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Shippers are urged to book space and prepare contingency plans as air cargo capacity shortages from key Asian markets are expected during the peak season.
• In a Xeneta and Tiaca webinar, it was reported that dynamic load factors in July from Asia Pacific to Europe reached 86%, and 88% to North America, which is unusually high for this time of year.
• The situation is forecasted to worsen, driven by increasing general cargo volumes, ongoing e-commerce growth, and persistent disruptions in ocean shipping.
• Punctuality in ocean shipping has dropped, with only 49% of services from Asia to Europe arriving on time in June, compared to 70% the previous year.
• The cost difference between ocean and air shipping has narrowed, with air freight now being four times more expensive than ocean shipping, down from ten times pre-Covid.
• Potential strikes at US East and Gulf Coast ports in October may further exacerbate the issue, requiring cargo to be rerouted through the West Coast or shifted to air freight, adding both time and cost.
• Niall van de Wouw, chief airfreight officer at Xeneta, highlighted that shippers are securing long-term deals, blocking space, using index-linked contracts, and exploring alternate routes to mitigate risks.
• Glynn Hughes, director general of Tiaca, emphasized that unlike last year's unexpected e-commerce boom, shippers now have time to plan for contingencies.
• A planned strike at India's major ports was averted after workers accepted a new five-year contract, canceling the walkout scheduled for August 28.
• Nearly 20,000 workers were set to strike, but unions agreed to an 8.5% pay raise over five years, lower than their initial 10.6% demand.
• Negotiations began in 2021 following the expiration of the previous contract, and this agreement ended the prolonged talks.
• India's key ports, including Chennai, Cochin, and Mumbai, handle 1.62 billion metric tons of cargo annually.
• India's total exports for fiscal 2023-24 are projected to reach $776.68 billion, a slight increase from $776.4 billion the previous year.
• Busan's BNCT had a 73% laden yard density on August 28, with 8,900 TEUs of CMA transshipment inventory. Week 35 congestion caused 2-day delays, and similar issues are expected in week 36, with potential 1+ day delays.
• In Singapore, the overall port situation has stabilized, with moderate berth congestion causing a general waiting time of 1 day.
• For the CMA group in Singapore, waiting and delays were well managed, averaging between 0.5 to 1 day in week 35.
• Yard utilization in Singapore recently dropped, maintaining an average level of 75-80%. However, PSA remains cautious about accepting ad hoc and heavy discharge vessels to prevent further disruptions.

Turkey → North America

• Canadian truck rates have remained high following the brief shutdown of the country's freight railroads, which pushed more freight into trucks.
• The rail stoppage caused a surge in truck prices, particularly for long-haul shipments within Canada.
• Spot market rates saw double-digit increases in lanes between U.S. West Coast ports and Central Canada, while spot market load volumes spiked by over 30%.
• The shift from rail to truck indirectly boosted cross-border traffic, increasing trucking activity between the U.S. and Canada.
• U.S. trucking costs remained unaffected, but U.S. shippers are concerned about potential impacts from upcoming port strikes on the East and Gulf coasts.
• Truck rates may remain elevated for a week or two before stabilizing, though the threat of another rail strike is keeping shippers cautious about switching back to rail.
• Seattle's average IPI dwell time is 10 days before departure from the port of discharge, similar to Los Angeles and Long Beach, where a surge in imports is causing delays.
• High import volumes entering Seattle are expected to cause further delays, but efforts are underway to collaborate with rail providers to ensure sufficient car supply.
• In Vancouver and Prince Rupert, the average IPI dwell time remains at 8.5 days.
• A TCRC rail lockout began on August 22nd, halting all rail operations within Canada and for cross-border freight. As rail services restart, dwell times are expected to rise during the recovery period.

North America → Turkey

• Canada narrowly avoided a rail strike after a late ruling prohibited workers from taking industrial action, though the Teamsters Canada Rail Conference plans to challenge the ruling legally.
• The East Coast is also at risk of industrial action, with the current contract set to expire on September 30, potentially affecting East Coast and Gulf ports.
• The rise in rates throughout August, combined with the potential strikes, has prompted shippers to advance their stock movements earlier than originally planned.
• The North Europe to US East Coast trade is seeing space tighten, with carriers noting the effects of reduced capacity as vessels are fully booked.
• Mediterranean ports, particularly in Italy and Spain, continue to face congestion, with average wait times ranging from 4 to 7 days.
• Strikes at ports in Southern Italy are worsening the situation, adding to delays and operational challenges.
• These disruptions are spreading to the Eastern Mediterranean, where rates are starting to increase as a result.

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 4 days is expected at Port Liberty Terminal Bayonne.
• Average gate turn times are 48 minutes for single transactions and 72 minutes for double transactions.

Norfolk:

• Currently, most vessels berth on arrival.
• Bigger vessels wait approximately 2.5 days for a berth.
• Average gate turn times are 33 minutes for single transactions and 46 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.

Savannah:

• The waiting time for a vessel berth at the terminal is up to 3 days, depending on the vessel's size.
• Average gate turn times are 34 minutes for single transactions and 55 minutes for double transactions.
• Import dwell time is 2.6 days.

Houston:

• There is a 1 day waiting time for vessel berthing at Barbours Cut Terminal and Bayport Container Terminal.
• Average gate turn times at Barbours Cut Container Terminal are 34 minutes for single transactions and 52 minutes for double transactions.
• Average gate turn times at Bayport Container Terminal are 28 minutes for single transactions and 45 minutes for double transactions.
• Loaded import dwell is 3.8 days at Barbours Cut and 3.6 days at Bayport.

Oakland:

• No waiting time at Oakland Int’l Container Terminal (OICT) and at TraPac.
• Average import deliveries can take up to 5.3 days at TraPac and 3.2 days at OICT.
• Average gate turn times are 90 minutes at OICT and 73 minutes at TraPac.
• Port of Oakland has started a bollard and fender replacement project at OICT.
• It is starting with Berth 55 through Berth 59.
• The project is expected to last into Q1 2025.
• Berth 55 is complete, and has moved to Berth 56.

Seattle-Tacoma:

• There is a 4 day waiting time at Husky Terminal and 13 days at Washington United Terminal in Tacoma.
• There is a 5 day waiting time in Seattle.
• Import rail dwell times are 5.8 days at Husky Terminal.
• Import rail dwell times are 6.4 days at Washington United Terminal but some places see up to 14 days.
• Import rail dwell times are 3-5 days at Terminal 18 (T18).
• Average gate turn times are 44 minutes at T18.
• Average gate turn times are 28 minutes at Washington United Terminal.
• Average gate turn times are 57 minutes at Husky Terminal.
• T18 will now be open on August 30, 2024.
• Husky Terminal will have hoot gates on September 4 and 5, 2024.
• All terminals will be closed on September 2, 2024.

Los Angeles/Long Beach:

• Port of Los Angeles dwell time for local import cargo is 3.2 days.
• On-dock rail dwell time at Port of Los Angeles is 7.9 days.
• Import units on the street at Port of Los Angeles are averaging 3.4 days for 20 ft containers and 5.7 days for 40+ ft containers.
• Average terminal gate turn time at Port of Long Beach is between 25 and 68 minutes, depending on the terminal.

Chassis Pools

All pools are operating as normal except:

• Columbus – Deficit on 40’ chassis.
• Indianapolis - Deficit on 40’ chassis.
• Louisville – Deficit on 40’ chassis.
• Memphis – Constrained on 20’ and deficit on 40’ chassis.
• Buffalo – 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.