Freight market update - 7 November 2024

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• Global maritime trade increased by 2.4% in 2023, reaching a total of 12.3 billion tons.

• According to the United Nations Trade and Development (UNCTAD) Review of Maritime Transport 2024, shipping volumes are projected to grow by 2% in 2024.

• On October 22, approximately 60,000 port workers in Brazil went on strike for 12 hours, with 20,000 striking at Santos port, to protest new labor laws.

• Spot rates for cargo from East Coast South America to the U.S. Gulf Coast has surged to $5,800 per FEU, marking a 250% increase from October last year.

• Airlines are increasing capacity on Asia Pacific-North America routes as disruptions from China’s Golden Week subside and preparations for the Christmas rush begin.

• The U.S. National Retail Federation (NRF) forecasts a 2.5% to 3.5% growth in holiday spending compared to last year.

• Cathay Pacific reported an 11% year-on-year increase in September volumes, driven by demand for e-commerce, electronics, and perishables.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Airlines are increasing capacity on Asia Pacific-North America routes as disruptions from China’s Golden Week subside and preparations for the Christmas rush begin.
• The U.S. National Retail Federation (NRF) forecasts a 2.5% to 3.5% growth in holiday spending compared to last year.
• E-commerce is projected to grow between 8% and 9%, reaching a total of $297.9 billion.
• NRF President Matthew Shay noted that a strong job market and wage growth are expected to support consumer spending, though recent hurricanes and fewer shopping days this year may pose challenges.
• NRF’s Chief Economist Jack Kleinhenz remains optimistic, citing strong household finances as a boost to consumer confidence for holiday spending.
• In response to demand, capacity on Asia Pacific-North America routes rose 6% last week, while Europe-bound capacity grew 4%.
• Capacity from Shanghai to North America increased by 17.5%, and Hong Kong’s capacity rose by 11.7%.
• Cathay Pacific reported an 11% year-on-year increase in September volumes, driven by demand for e-commerce, electronics, and perishables.
• Despite increased capacity, air freight rates have remained stable, with a 1.6% week-on-week rise in Hong Kong export rates and a 3.6% rise in Shanghai export rates, according to the TAC Index.
• The NRF warns that new U.S. tariffs could raise household costs by over $4,000 under future policies.
• “Tariffs are paid by the importer, not the producing country, and these costs are passed on to the consumer, effectively a tax on consumers,” NRF President Shay explained.
• Space on Ocean Alliance services is increasingly limited, with bookings now required 3-4 weeks in advance.
• In contrast, other alliances like 2M and THE Alliance continue to release space closer to departure.
• European ports are facing substantial congestion, with delays and high yard density impacting operations.
• Rotterdam is reporting delays of up to 7 days, while Antwerp and Felixstowe are also experiencing disruptions due to congestion.
• Last-minute schedule changes and port omissions have become common as vessels reroute or offload cargo at nearby ports to manage delays.
• After a lull following Golden Week, shipping volumes are rebounding, particularly from China, driven by anticipated tariff increases.
• Some East Coast services are experiencing capacity constraints through November, with certain routes now fully booked.
• U.S. West Coast ports report minimal congestion, whereas East Coast ports are facing slightly more delays.
• Rates from the Indian Subcontinent to Europe have softened slightly as the traditional slow season begins.
• Demand has decreased, especially from India, but carriers are closely monitoring market conditions.
• Rates remain relatively competitive, with notable competitiveness on routes from South India and Bangladesh.
• Space availability has improved as demand weakens, though capacity constraints persist in some transshipment hubs, such as Colombo, where congestion and delays continue.
• In inland areas like Delhi, a shortage of 20ft containers is impacting availability at key ports, including Nhava Sheva.
• In Bangladesh, ongoing protests and strikes in the garment sector are disrupting logistics, potentially affecting timelines.
• In India, extended monsoon weather and the recent Diwali holiday have caused operational delays, particularly at ports like Mundra, where congestion has led to vessel delays of up to 48 hours.

Turkey → North America

• Schedule disruptions on the North-South trade lane have led to port delays, affecting ports along South America's East Coast.
• Late arrivals of vessels from the U.S. are causing delays for cargo departing from Brazilian, Argentine, and Uruguayan ports.
• JOC analyst and Vespucci Maritime CEO, Lars Jensen, previously warned that the U.S. dock workers' 3-day strike at East and Gulf Coast ports would have lingering effects.
• This is impacting South American exports about three to four weeks after the strike ended.
• Brazil recently faced additional disruptions due to a port worker strike, which has further complicated port operations.
• On October 22, approximately 60,000 port workers in Brazil went on strike for 12 hours, with 20,000 striking at Santos port, to protest new labor laws.
• The combined disruptions and congestion have significantly increased export shipping rates.
• Spot rates for cargo from East Coast South America to the U.S. Gulf Coast have surged to $5,800 per FEU, marking a 250% increase from October last year.
• In contrast, the rate for southbound exports from the U.S. Gulf Coast to South America’s East Coast is $975 per FEU.
• Dock workers in Montreal announced a 24-hour strike starting Sunday, 27 October at 7 am, leading to further disruption at the port.
• The Maritime Employers Association (MEA) warned that the strike’s impact would extend well beyond the one-day stoppage.
• The MEA recalled that the union-led strike on 30 September paralyzed operations at the Viau and Maisonneuve (Termont) terminals for three days, affecting 41% of Montreal’s port activities and causing lasting effects.
• Another strike that began on 10 October, halting all overtime, is still ongoing and continues to create operational challenges, according to the MEA.
• Due to these disruptions, cargo volumes in Montreal have fallen by 24% since 2022.
• Montreal’s port handled 1.7 million TEU in both 2021 and 2022, dropping to 1.5 million TEU in 2023, with only 1.1 million TEU handled so far in 2024.
• The labor dispute remains unresolved, with both unions and employers rejecting a recent government proposal for special mediation.
• After 35 mediation meetings over 15 months, the MEA stated that negotiations are “at square one and at an impasse.”

North America → Turkey

• Global maritime trade increased by 2.4% in 2023, reaching a total of 12.3 billion tons.
• According to the United Nations Trade and Development (UNCTAD) Review of Maritime Transport 2024, shipping volumes are projected to grow by 2% in 2024.
• Annual growth in shipping volumes is expected to average 2.4% through 2029.
• The report highlighted challenges to long-term shipping recovery, such as high freight costs and geopolitical disruptions.
• Container trade rose by 0.3% in 2023, with a potential 3.5% increase projected for 2024 if the supply chain remains stable.
• UNCTAD reported a record 250,000 port calls by container ships in the second half of 2023, driven by trade growth and extended shipping routes.
• Asia, handling 63% of global container volumes, experienced congestion, while disruptions in key routes like the Suez and Panama canals pushed ton-miles up by 4.2%.
• Ongoing issues like rerouting, port congestion, and rising operational costs have kept upward pressure on freight rates.
• The Shanghai Containerized Freight Index (SCFI) had more than doubled by mid-2024 compared to 2023 levels.
• If high rate pressures persist, UNCTAD warns that global consumer prices could increase by 0.6% by 2025.
• Major ports experienced doubled wait times in 2023 due to record ship calls and rerouted vessels.
• Technological advances, including blockchain and AI, helped Asian ports reduce delays and improve tracking and transshipment speeds.
• The global fleet expanded by 3.4% in 2023, with 95% of new vessels built by China, Japan, and South Korea.
• With the U.S. presidential election ongoing, supply chains are preparing for potential policy-driven changes, leading some manufacturers to adjust their strategies.
• Both candidates, Trump and Harris, have discussed reducing dependency on international sources, particularly China, and boosting domestic manufacturing, though their approaches differ.
• Trump's strategy includes imposing tariffs on foreign goods and reducing regulatory requirements for businesses, which could impact trade dynamics and inflation.
• He has also proposed modifications to environmental policies and climate initiatives, suggesting these changes could support domestic industries.
• Harris is likely to continue the current administration's approach, focusing on alliances and selective trade policies, particularly in renewable energy and technology sectors.
• Regardless of the election outcome, the new administration will need to address ongoing challenges related to costs, infrastructure, and workforce issues within the U.S.

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:

• 1.5 days waiting time expected for APMT, no waiting time at Maher Terminals, and up to 2.5 days at Port Liberty Terminal Bayonne.
• Average gate turn times are 43 / 65 minutes for single and double transactions respectively.
• Crane delivery at Port Liberty Terminal in Bayonne is complete.
• Berths 1 and 2 are now available for vessels.

Norfolk:

• Currently, most vessels berth on arrival.
• Bigger vessels wait approximately 1.5 days for a berth.
• Average gate turn times are 47 minutes for single transactions and 69 minutes for double transactions.

Charleston Terminal:

• 24 hours waiting time for Wando Welch Terminal and 6 hours for North Charleston Terminal.
• Average truck turn times are 21 minutes at Wando Welch Terminal and 19 minutes at North Charleston Terminal.

Savannah:

• The waiting time for a vessel berth at the terminal is up to 2.7 days, depending on the vessel's size.
• Average gate turn times are 33 minutes for single transactions and 51 minutes for double transactions.
• Import dwell time is 4.3 days.

Houston:

• There is no waiting time for vessel berthing at Barbours Cut Terminal and at Bayport Container Terminal.
• Average gate turn times at Barbours Cut Container Terminal are 33 minutes for single transactions and 51 minutes for double transactions.
• Average gate turn times at Bayport Container Terminal are 35 minutes for single transactions and 54 minutes for double transactions.
• Loaded import dwell is 3.4 days at Barbours Cut and 3.3 days at Bayport.

Oakland:

• No waiting time at OICT, and 1 day waiting time at TraPac.
• Average import deliveries can take up to 5.4 days at TraPac and 3.5 days at OICT.
• Average gate turn times are 78 minutes at OICT and 86 minutes at TraPac.

Seattle-Tacoma:

• Up to 2 days waiting time at Husky and 1 day at Washington United terminal at Tacoma.
• No waiting time in Seattle.
• Import rail dwell are 3.5 days at Husky, 2.7 days at Washington United Terminal, and 3 days at T18.
• The average gate turn times are as follows: 41 minutes for T18, 30 minutes for Washington United Terminal, and 73 minutes for Husky.
• T18 will be closed on November 8,11 and 22, 2024.

Los Angeles/Long Beach:

• Port of Los Angeles dwell time for local import cargo is 3.1 days.
• On-dock rail dwell time at Port of Los Angeles is 8 days.
• Import units on the street at Port of Los Angeles are averaging 3.6 days for 20 ft containers and 5.8 days for 40+ ft containers.
• Port of Long Beach dwell times for local imports are starting to go up to 5-9 days.
• The average terminal gate turn time is around 21-90 minutes, based on the terminal.

Chassis Pools

All pools are operating as normal except:

• Cleveland – Deficit on 40’ chassis.
• Columbus – Deficit on 20’ Chassis.
• Louisville – Deficit on 20’ and 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, 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.