Freight market update - 13 March 2024

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• By early May, ONE is set to launch a new Vietnam-China-Taiwan-USA AP1 loop, jointly operated with Wan Hai lines.

• The Panama Canal Authority has announced plans to allocate over $8.5 billion in capital investments toward sustainability projects over the next 5 years, aiming to combat climate change.

• Chinese Premier Li Qiang announced a $173 billion investment in China’s transportation infrastructure as part of its economic growth target, marking a $3.5 billion increase from 2023.

• Shanghai aims to increase Yangtze River Delta flows through projects such as constructing a new $73 billion container terminal. Additionally, Shanghai plans to advance the construction of the second phase of the Shanghai-China Railway and the Shanghai-Chongqing-Chengdu high-speed railway.

• According to Sea-Intelligence, diversions around the Cape of Good Hope could lead to a 16% increase in TEU*Miles in 2024.

• The Federal Maritime Commission (FMC) recently made a decision that will significantly change container charges at ports and inland rail facilities, which has been welcomed by U.S. truckers.

• Effective from May 28, the ruling aims to simplify international container billing practices, particularly impacting truckers facing ocean carrier detention and demurrage fees (D&D).

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• The China-Europe Railway Express has experienced a notable increase in operations, dispatching nearly 3,000 trains in the first two months of 2024.
• By early May, ONE is set to launch a new Vietnam-China-Taiwan-USA AP1 loop, jointly operated with Wan Hai lines.
• This new 8-week loop will include calls at Cai Mep, Shekou, Xiamen, Taipei, Ningbo, Shanghai, LA, Oakland, and then back to Vietnam.
• Ships on this route will have a capacity ranging from approximately 5,500 to 14,000 TEU.
• The agreement entails a minimum 12-month contract.
• Chinese Premier Li Qiang announced a $173 billion investment in China’s transportation infrastructure as part of its economic growth target, marking a $3.5 billion increase from 2023.
• Dalian plans to inject over $33 billion into its North-Eastern transport network, which includes expanding port infrastructure and constructing new rail bridges. The aim is to achieve a 12% year-on-year increase in container volumes.
• The Ministry of Transport stated that Dalian's strategy involves actively opening ocean routes to the Americas, Middle East, India, and Pakistan, introducing five new container routes, and enhancing China-Europe connections.
• Shanghai aims to increase Yangtze River Delta flows through projects such as constructing a new $73 billion container terminal. Additionally, Shanghai plans to advance the construction of the second phase of the Shanghai-China Railway and the Shanghai-Chongqing-Chengdu high-speed railway.
• China intends to abolish market access restrictions on foreign investment in manufacturing and reduce restrictions in service sectors to create a favorable environment for foreign direct investment and promote Belt and Road cooperation.
• Non-alliance carriers in the Asia-Europe trade lane have doubled their market share within a single year, according to recent data from Alphaliner.
• Smaller carriers such as New New Shipping, OVP Shipping, Safetrans, FESCO, Akkon, and CStar have increased their market presence to fill the gap left by major global liners exiting the Russian markets.
• The collective market share of these non-alliance players has grown from 154,600 TEU to 308,300 TEU, now constituting approximately 5% of the trade lanes’ market share.
• ZIM contributes 1.2% to this share.
• SeaLead Shipping has become another significant player, holding a 1% market share after expanding its Asia-Med fleet by 40.6% year-on-year to 61,400 TEU.
• Mega alliances like 2M, Ocean Alliance, and THE Alliance have experienced a decline in market shares from 95.6% to 89.7% during the same period.
• The China-Europe Railway Express has experienced a notable increase in operations, dispatching nearly 3,000 trains in the first two months of 2024.
• This expansion highlights the service's growing significance in facilitating quicker and safer freight services for China-EU trade amidst evolving global logistics dynamics.
• China Railway reported that the China-Europe Railway Express operated 2,928 trains in January and February, transporting 317,000 20-foot equivalent unit (TEU) containers of goods. This signifies a 9 percent and 10 percent year-on-year increase, respectively.
• The network now encompasses 120 cities in China and reaches 219 cities in 25 European countries.
• The surge in demand from European countries, prompted by the Red Sea crisis, has played a role in this trend, as businesses seek reliable alternatives to sea transport.
• Yuan Xiaojun, a manager at China-Europe Chang'an, which operates freight trains, noted a significant increase in inquiries and bookings for the trains, with February witnessing a 20 percent to 30 percent rise in operations.

Central China to USA

• From SHA to the USA, the market remains unchanged compared to last week, and activity is slow.
• Rates from NGB to the USA have remained stable this week. It is advisable to book 4-5 days in advance of the cargo ready date.

North China to USA

• Rates from TSN to the USA via Korean Airlines have increased and are fluctuating. Asiana Airlines are confirming rates case by case.
• Rates from DLC/PEK to the USA with most airlines are fluctuating this week. Market rates are returning to normal levels, but it's recommended to confirm on a case-by-case basis.
• Space is somewhat tight from TAO to the USA. Rates have risen, and spot rates can be applied for dense cargo.

South China to USA

• From SZX to the USA, the market and rates remain stable this week.
• From XMN to the USA, the market is similar this week, but final rates should be confirmed on a case-by-case basis when booking.

Turkey → North America

• The situation on the Bab Al-Mandab Strait remains unresolved as Houthi forces persist in attacks.
• On February 20th, the EU initiated the Aspides Mission to safeguard ships transiting through the Suez Canal from further attacks, deploying 4 frigates to the area.
• Carriers are opting to reroute via the Cape of Good Hope due to the ongoing instability, leading to increased transit times and TEU*Miles.
• According to Sea-Intelligence, diversions around the Cape of Good Hope could lead to a 16% increase in TEU*Miles in 2024.
• In 2023, global TEUMiles amounted to 860 billion. Moving the same cargo volume globally in 2024 would require approximately 994 billion TEUMiles, reflecting the increased demand.
• The Federal Maritime Commission (FMC) recently made a decision that will significantly change container charges at ports and inland rail facilities, which has been welcomed by U.S. truckers.
• The new rule will affect both drayage companies operating at ports and trucking companies transporting international containers from inland rail facilities.
• Effective from May 28, the ruling aims to simplify international container billing practices, particularly impacting truckers facing ocean carrier detention and demurrage fees (D&D).
• It is anticipated that the FMC rule will relieve financial pressures on motor carriers, improve supply chain efficiency, and promote collaboration among contracting parties to resolve billing disputes.
• One significant aspect of the ruling is that ocean carriers are now mandated to submit invoices for D&D charges within 30 days, compared to the previous 60-day period.
• Demurrage charges are applied when containers exceed allocated free time on docks, while detention charges, also known as per diem, occur after free days have elapsed when a container is removed from the dock.
• Otto Schacht expressed confidence in the future of independent freight forwarders serving SME shippers during the S&P TPM24 conference in Long Beach.
• Schacht described the freight forwarding industry as heavily fragmented, even after consolidations by larger players within the sector.
• In his presentation, Schacht outlined a scenario where 150 TEU is available in the global market, with freight forwarders controlling half of that volume.
• He noted that major players would control approximately 25 million TEU, leaving about 50 million TEU in the hands of independent forwarders.
• Schacht credited smaller forwarders for their niche market coverage and excellent client service, particularly catering to SMEs.
• He predicted stability in market shares for the next five to ten years.
• Schacht stated that carriers were both competitors and partners of freight forwarders.
• He expressed confidence in the enduring importance of independent forwarders in the shipping industry.

North America → Turkey

• The Panama Canal Authority has announced plans to allocate over $8.5 billion in capital investments toward sustainability projects over the next 5 years, aiming to combat climate change.
• This initiative follows sustained low water levels of approximately 13.4 meters, with no clear indication of when levels will return to normal.
• The investment exceeds the $5.4 billion cost of the Panama Canal expansion, marking it as the largest improvement project in the Canal’s history.
• Currently, only 5 containerships are permitted to transit per day since the beginning of 2024, leading to delays of up to 3 days. Under normal conditions, up to 32 vessels would pass per day.
• The prestigious Supply Chain Excellence Awards, long celebrated in Europe for 28 years, are expanding to America.
• The Supply Chain Excellence Awards USA will recognize and reward organizations in the US that exhibit excellence in their supply chain operations.
• These awards are known for their rigorous judging process, offering valuable feedback for entrants.
• The inaugural Supply Chain Excellence Awards USA will take place on October 21, 2024, in Miami, Florida.
• Rates are experiencing a decline in the first half of March, with a notable divergence among certain carriers in the UK market compared to North Continent Ports, attributed to low demand post-Q4 extending into Q1 2024.
• Negotiations for long-term deals are being discussed post-Chinese New Year as carriers reassess demand patterns.
• While some carriers are open to such deals, the majority are waiting for further clarity on the market situation.
• February’s space is fully booked, with varying availability for March among carriers.
• Blank sailings are prevalent this week and the next due to factory closures related to Chinese New Year.

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 3 days waiting time is expected at Port Liberty Terminal Bayonne.
• Average gate turn times: 43 minutes for single transactions, and 72 minutes for double transactions.
• Terminal change to Port Liberty New York.
• MV La Traviata V019 E/W and MV Dalila V026 E/W are expected to arrive in New York on February 1, 2024, and February 17, 2024, respectively.
• 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 39 / 53 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:

• Waiting time for vessel berthing is 1 day at Wando Welch Terminal and 0.5 days at North Charleston Terminal.
• Average truck turn times: 19  minutes at Wando Welch Terminal, and 18 minutes at North Charleston Terminal.
• Dock construction at Wando Welch terminal is starting in March 2024.
• It is reduced from 3 to 2 berths for one year.
• Berths will be given on a first come, first serve basis.
• Sunday gates are by appointment only.

Savannah:

• Waiting time for vessel berth at the terminal is up to 4 days, depending on the size of the vessel.
• Average gate turn times are 38 / 56 minutes for single and double transactions respectively.
• Import dwell time is 4.9 days.
• Berth 2 is back online helping to reduce waiting times.

Houston:

• Barbours Cut Terminal has up to 3 days waiting time for vessel berthing.
• 3 days waiting time at 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 time at Barbours Cut Container Terminal is 38 minutes and Bayport Container Terminal is 41 minutes.
• Loaded import dwell is at 3.6 days.

Oakland:

• Average wait time of up to 9 days at Oakland Int’l Container Terminal (OICT) and 1 day at TraPac.
• Average import deliveries can take up to 6 days at TraPac and 4 days at OICT.
• Average gate turn times are 60 / 72 minutes for OICT and TraPac respectively.
• OICT - Berth 55 is operational.
• Hoot shifts are being worked to help alleviate the backlog of vessels waiting for berthing.

Seattle-Tacoma:

• Wait time of up to 4 days at Husky and 4 days at WUT at Tacoma.
• 2 days waiting time in Seattle.
• Import deliveries are 1.8 days at Husky – due to EB/WB railcar imbalance, 1.7 days at Washington United Terminal, and 1-3 days at T18.
• The average gate turn times are 29 minutes for T18, 34 minutes for Washington United Terminal, and 51 minutes for HUSKY.
• Terminal 18 will be closed Fridays through March and April 1, 2024.
• Husky terminals will be closed on March 11, 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 3.2 days, on-dock rail dwell is 5.4 days, and import units on the street are averaging at 4.4 /5.1 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 21 / 98 minutes, depending on the terminal.

Chassis Pools

All pools operating as normal except for:

• Cleveland – 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, 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.