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Freight market update - 03 January 2024

Beeontrade

·

January 2024

8 min read

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Freight market update - 03 January 2024

From the Editor’s Desk

Greetings!

Wishing all our readers a happy and prosperous 2024. We hope this year brings you success and we look forward to your continued support to make this year a success for us.

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Key takeaways for the US

  • 60 vessels traveling on the Asia Westbound route have been redirected via the Cape of Good Hope.

  • Maersk has rerouted 50% of its vessels, while CMA CGM has rerouted 30% of its ships.

  • The Port of New Orleans has received a $74 million grant from the 2021 Infrastructure Act.

  • Suspicions about China's ambitions and disruptions in the post-COVID supply chain have played in India's favor.

  • The US Congress has approved a measure preventing the Pentagon from utilizing seaports globally that depend on the Chinese logistics platform LOGINK.

Read on for more in-depth updates.

Ocean Freight Market Updates

Asia → North America

US/CA

Transpacific Trends and Market Updates

  • 60 vessels traveling on the Asia Westbound route have been redirected via the Cape of Good Hope.
  • MSC and Asian carriers have rerouted all of their vessels through the Cape of Good Hope.
  • Maersk has rerouted 50% of its vessels, while CMA CGM has rerouted 30% of its ships.
  • Rerouting has led to an additional 7 days of transit time in both directions.
  • Carriers like CMA CGM and Maersk are aiming to use the Suez Canal on the return journey to Asia for quick equipment repatriation.
  • CMA CGM is guiding all vessels on FAL1 and FAL3 through the Suez Canal.
  • Some ports in Asia are experiencing a shortage of container capacity, leading carriers to lease containers until the end of the month to meet demand.
  • Rates on the Asia-Europe lane, including spot and contract rates, are significantly increasing due to General Rate Increases (GRIs) and emergency peak season surcharges with a two-week validity.
  • The disruption extends beyond the Asia-Europe trade lane, affecting other major trades with peak season surcharges.
  • If you have further questions, it is advisable to consult your freight forwarder.
  • India is well-positioned to challenge China's dominance in the supply-chain sector.
  • Suspicions about China's ambitions and disruptions in the post-COVID supply chain have played in India's favor.
  • India has significantly enhanced its logistics and supply chain capabilities, partly reflected in its improved performance on the World Bank's Logistic Performance Index.
  • The country's emphasis on infrastructure development, including roads, ports, and airports, is proving beneficial.
  • The substantial investments made by the Indian government in infrastructure are contributing to India having the world's lowest manufacturing costs.
  • Geopolitical tensions with China are also driving manufacturers towards India.
  • Anand Mahindra, Chairman of the Mahindra Group, sees India as being within reach of replacing China as the "factory to the world."
  • The combination of these factors positions India as a potential contender to challenge China's supply-chain dominance.
  • The US Congress has approved a measure preventing the Pentagon from utilizing seaports globally that depend on the Chinese logistics platform LOGINK, as reported by the Voice of America (VOA).
  • Senators Tom Cotton and Representative Michelle Steel assert that LOGINK enables Beijing to surveil the US military supply chain by monitoring cargo and ship movements at commercial ports.
  • The amendment to the National Defense Authorization Act (NDAA) for fiscal 2024, proposed by Cotton and Steel, also limits federal funding for ports utilizing LOGINK.
  • The bill, passed on December 14, is slated to become effective six months after President Joe Biden signs the NDAA, which is currently pending.
  • Representative Steel, in an email interview with VOA, emphasized the serious threat posed by LOGINK, operated under the Chinese Communist Party, and expressed concerns about Beijing's investments in over 100 ports across 60 nations.
  • BEST Inc, a China-based supply chain and logistics services provider, announced the upcoming opening of its largest sorting center in Southeast Asia, located in Selangor, Malaysia, in 2024.
  • The company plans to construct a 220,000-square-meter facility in Malaysia, aiming to strengthen logistics connections among Thailand, Vietnam, Singapore, and Malaysia for enhanced cross-border express delivery in the coming year.
  • BEST Inc is responding to the demand from Chinese companies investing in manufacturing facilities in Southeast Asia, supporting the Belt and Road Initiative's tangible growth in the region.
  • Johnny Chou, the Chairman and CEO of BEST Inc, highlighted the need for customized services to ensure the efficiency of supply chain operations in Southeast Asia.
  • The company, headquartered in Hangzhou, Zhejiang province, has already established service networks and overseas warehouses in various Southeast Asian countries, capitalizing on the increasing trade volume between China and the Association of Southeast Asian Nations (ASEAN).
  • BEST Inc entered the Southeast Asian market five years ago, starting in Thailand, and expanded its cross-border business by establishing new international routes between China and Southeast Asian countries.

SHANGHAI (SHA) to Europe and the US

Currently quiet market due to holidays.

Possible slight rate increase over the weekend.

NINGBO (NGB) to Europe and the US

Stable market with decreased rates.

Recommended to book space 4-5 days prior to cargo ready date.

NORTH CHINA to USA and Europe

TIANJIN (TSN):

Decreased rates for Korean Airlines to both destinations.

Asiana Airlines rates vary case by case, but space is available.

Suggested booking 3-4 days ahead.

BEIJING (PEK):

Rates decreased on most major airlines compared to the previous week.

Major services to Europe: Singapore Airlines, Cathay Pacific, Lufthansa, Air China, KLM, Air France, Japan Airlines.

Advised to book space 3-4 days ahead.

Major services to the US: Cathay Pacific, Japan Airlines, All Nippon Airways, Eva Air.

Advised to book space 5-6 days ahead.

QINGDAO (TAO):

More space available with decreased rates this week.

ETD to the US is 3-5 days after booking.

Spot rates available for dense cargo.

SOUTH CHINA to USA and Europe

GUANGZHOU (CAN):

No major updates in space.

Rates need to be checked with the carrier on a case-by-case basis.

SHENZHEN (SZX):

Less busy market this week due to holidays.

Rates need to be checked with the carrier on a case-by-case basis.

XIAMEN (XMN):

Demand has eased.

Limited space with final rates depending on a case-by-case basis.

Turkey → North America

  • The Port of New Orleans has received a $74 million grant from the 2021 Infrastructure Act.
  • The grant is intended for enhancing various aspects of America's ports, waterways, railways, and roads.
  • The existing terminal at the Port of New Orleans faces limitations in terms of depth and overhead clearance, restricting its capacity to accommodate larger, modern ships.
  • The allocated funds will be utilized for planning the construction of a new container terminal in St. Bernard Parish.
  • The goal is to develop a $1.8 billion terminal project, aiming to enhance the port's competitiveness against counterparts like Houston and Mobile.
  • Turhan Özen has resigned from his role as Chief Cargo Officer for Turkish Cargo after serving in the position for seven years.
  • He initially joined Turkish Cargo in December 2016, transitioning from his role as Managing Director of Ceva Logistics.
  • During his tenure, Turkish Cargo, under Mr. Özen's management, experienced a 3.2% increase in market share and ascended from 20th to 5th place in the global rankings.
  • Mr. Özen expressed pride in his work at Turkish Airlines, a company founded 90 years ago, highlighting its transformation into Turkey's most valuable and successful institution.
  • He enters the year 2024 with a sense of peace, joy, pride, and happiness.
  • Turhan Özen is actively involved in various organizations, serving as a board member of Tiaca, CILT Türkiye, and the Istanbul Economy Summit. Additionally, he is a member of the advisory council for IATA (International Air Transport Association).
  • JD Logistics launched an international express delivery service on December 15, providing one-way deliveries from China to North America and Europe.
  • Initially covering 23 countries across North America and Europe, the service is available in Shenzhen and Guangzhou, with plans for expansion throughout China.
  • Customers in China can utilize the JD Express mini program on WeChat to book doorstep pick-ups, with in-house couriers ensuring one-hour pickup and real-time parcel tracking.
  • The introduction of this service signifies a notable step for JD Logistics, extending its renowned logistics services to the global arena and representing a crucial phase in its broader international market expansion.
  • JD Logistics' overseas warehousing operations already offer same-day fulfillment services in key European markets, including Germany, The Netherlands, France, the UK, Spain, and Poland.
  • Additionally, the company provides two- to three-day delivery services across 90 percent of regions in the United States.

North America → Turkey

  • Vietnam Airlines and Turkish Airlines recently signed a cooperation agreement at the Presidential Palace in Ankara, witnessed by Vietnam's Prime Minister Pham Minh Chinh and Turkey's Vice President Cevdet Yılmaz.
  • The agreement focuses on enhancing collaboration in the field of air cargo transportation between the two airlines.
  • The aim is to bring long-term benefits to air cargo customers by exploring the potential launch of an air cargo joint venture.
  • This venture would offer advantages such as a larger and faster network, improved direct flights, an expanded range of destinations, and increased flight frequencies.
  • The collaboration seeks to leverage the central geographical location of Vietnam as a transit point, providing Turkish Airlines access to previously limited areas like Oceania and Northeast Asia.
  • Dang Ngoc Hoa, Chairman of the Board of Directors of Vietnam Airlines, emphasized the mutual benefits of the cooperation, with the potential for Vietnam Airlines to significantly expand its scale through freighters and access to Turkish Airlines' extensive global network of 345 destinations.
  • Turkish Airlines CEO Bilal Ekşi highlighted the strategic importance of Asia and the collaborative efforts to strengthen their presence on the continent, emphasizing the potential for future developments beyond air cargo.
  • The collaboration builds on a codeshare agreement signed in June, facilitating flexible flight options for passengers traveling between Vietnam and Turkey, including major economic, social, and tourist centers in both countries.
  • PSA BDP, a global logistics and supply chain solutions provider, has inaugurated its first office in Lisbon to enhance its presence in Europe and explore opportunities in global markets.
  • The Portugal operations of PSA BDP will be overseen by country manager Miguel Mesquita.
  • PSA BDP Portugal aims to collaborate with PSA Sines to offer comprehensive and continuous services and solutions for the supply chain.
  • PSA Sines Container Terminal, operational since 2004 and situated 150 kilometers south of Lisbon, plays a crucial role as an Atlantic gateway to Portugal and the Iberian Peninsula.
  • The strategic location of PSA Sines at the intersection of major maritime routes ensures accessibility and ease of transport.
  • Road and rail connections between PSA Sines and the country's interior enhance the efficiency of the supply chain network, optimizing transit times and reducing costs for customers.
  • PSA BDP Portugal plans to provide services such as air cargo, sea transport, international road transport, transport of oversized cargo, customs and commercial compliance, and domestic distribution in collaboration with PSA Sines.
  • The establishment of a presence in Lisbon aligns with PSA BDP's global growth strategy, reinforcing its commitment to being a leader in global supply chain solutions.

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.
  • Up to 1.5 days waiting time at APM Terminals.
  • Up to 3 days waiting time is expected at Port Liberty Terminal Bayonne.
  • Average gate turn times: 35 minutes for single transactions, and 62 minutes for double transactions.
  • APMT gate will not have a gate open on Saturdays.

 

Norfolk:

  • Currently, most vessels berth on arrival, however, the bigger vessels wait approx. 2 days for a berth.
  • Average gate turn times are 32 / 48 minutes for single and double transactions respectively.
  • Christmas Eve and Christmas day are no-work days.
  • One crane down for routine maintenance.

 

Charleston Terminal:

  • Waiting time for vessel berthing is 0-1.5 days at Wando Welch Terminal and 0 days at North Charleston Terminal.
  • Average truck turn times: 20  minutes at Wando Welch Terminal, and 19 minutes at North Charleston Terminal.
  • Sunday gates are by appointment only.

 

Savannah:

  • Waiting time for vessel berth at the terminal is up to 2 days, depending on the size of the vessel.
  • Average gate turn times are 38 / 55 minutes for single and double transactions respectively.
  • GPA no longer offers a Sunday gate.
  • Monday-Saturday gate hours remain the same.
  • Berth 2 is back online helping to reduce waiting times.

 

Houston:

  • Barbours Cut Terminal has up to 1 day waiting time for vessel berthing.
  • No waiting time at Bayport Container Terminal.
  • Due to vessel bunching the yard is facing congestion impacting the discharge productivity and extending port stays.
  • Average gate turn time at Barbours Cut Container Terminal is 37 minutes and Bayport Container Terminal is 46 minutes.
  • Loaded import dwell is at 3.5 days.
  • The EC6 service is changing terminal at Houston from Barbours Cut to Bayport effective MV ONE Competence 087E.

 

Oakland:

  • Average wait time of up to 3 days at Oakland Int’l Container Terminal (OICT) and 3 days at TraPac.
  • Average import deliveries can take up to 4.2 days at TraPac and 3.4 days at OICT.
  • Average gate turn times are 61 / 67 minutes for OICT and TraPac respectively.
  • TraPac has received 6 new RTG’s and are in process of commissioning.
  • They are likely to be operational mid-December.
  • Dredging operations at OICT berths caused some berthing delays.

 

Seattle-Tacoma:

  • Wait time of up to 3 days at Tacoma and no waiting time at Seattle.
  • Import deliveries are 4 days at HUSKY – due to EB/WB railcar imbalance, 2.4 days at Washington United Terminal, and 1-3 days at T18.
  • Dwell is dropping and rail companies are mostly caught up.
  • Possible delays with back-to-back vessels discharging this week.
  • Several vessels reported delays due to storms in the Pacific.
  • The average gate turn times are 29 minutes for T18, 28 minutes for Washington United Terminal, and 35 minutes for HUSKY.

 

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 3.2 days, on-dock rail dwell is 4.0 days, and import units on the street are averaging at 4.4 /5.9 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 24-88 minutes, depending on the terminal.

 

Chassis Pools

All pools are operating as normal.

 

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

Range

Port

Vessels at Anchor

Vs Last Week

Waiting Time

Vs Last Week

PNW

Vancouver

0

-

0

-

PNW

Seattle

0

-

0

-

PSW

Oakland

4

+3

2

+1

PSW

LA/LB

0

-

0

-

USEC

New York

0

-

0

-

USEC

Norfolk

4

+4

2

+2

USEC

Charleston

0

-

0

-

USEC

Savannah

4

+3

1

-

USGC

Miami

0

-

0

-

USGC

Houston

4

+4

2

+1

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.

Conduct thorough research on ports that offer available space and suitable equipment despite the ongoing conditions. By doing so, you can minimize complications, facilitate shipments, and maximize efficiency.

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.

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