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Market Update

Freight market update - 17 January 2024

Beeontrade

·

January 2024

8 min read

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Freight market update - 17 January 2024

From the Editor’s Desk

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Key takeaways for the US

  • 354 vessels have opted for the Cape of Good Hope route, making up 80% of Asia-Europe Trade vessels.

  • National Retail Federation (NRF) expresses concerns about a potential strike at US East Coast terminals.

  • Vessels idle at the Panama Canal due to historically low water levels, reducing daily transit capacity from 36 to 22 vessels.

  • A further decrease to 16 vessels per day is expected in February.

  • Westbound voyages from Asia are reportedly fully booked until Chinese New Year (starting February 10).

  • Some carriers are responding to high market rates, reaching $10,000 per 40ft for prompt shipments from China to North Europe.

  • The logistics market in the Asia-Pacific (APAC) region is projected to witness substantial growth, with an estimated increase of USD 145.4 million from 2022 to 2027.

Read on for more in-depth updates.

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Ocean Freight Market Updates

Asia → North America

US/CA

Transpacific Trends and Market Updates

  • 354 vessels have opted for the Cape of Good Hope route, making up 80% of Asia-Europe Trade vessels.
  • Market dynamics are chiefly driven by supply and demand, shaping carriers' pricing approaches.
  • Shippers dealing with long-term rates encounter restrictions linked to committed allocations tied to historical performance.
  • There is a notable 25% reduction in capacity at present.
  • Rerouting via the Cape of Good Hope has extended transit times by 10-20 days, varying with vessel size.
  • Asia, especially Northern China, is currently facing shortages in equipment.
  • The ongoing Red Sea crisis is causing significant disruptions in carriers' networks, leading to increased volatility and rapid changes.
  • Shippers are grappling with prolonged transit times, particularly on routes connecting Asia to North Europe and the Mediterranean.
  • Alan Murphy, CEO of Sea-Intelligence, emphasizes the high level of uncertainty in the current capacity outlook but notes that data indicates a potential capacity crunch for Asian exports in the upcoming weeks.
  • Sea-Intelligence analysis suggests a combination of delayed departures from Asia, awaiting re-routing, and late arrivals will lead to a rapid capacity decline in mid-January on the Asia-North Europe route. A steeper drop is anticipated for the week of January 22. Similar trends are observed on the Asia-Mediterranean and Asia-North America East Coast routes, but occurring a week earlier.
  • Despite posing a significant challenge for shippers, the disruptions are considered less severe than those experienced during the pandemic, as highlighted by Murphy.
  • North European container ports face potential capacity challenges in early February due to the arrival of a fleet of alliance vessels from Asia following revised Cape routing.
  • Loops from Asia to North Europe, having left Asia in December, now have revised ETAs in early to mid-February.
  • Vessel ETAs are delayed by ten days or more, leading to fierce competition among alliance carriers for arrival slots at hub terminals.
  • This competition may result in vessel bunching, prompting carriers to alter port rotations or consolidate operations at fewer hubs.
  • Port utilization levels are reportedly at 60-70%, with quick turnaround times if berths can be secured.
  • Carriers are closely monitoring industrial action in Germany, as it could potentially disrupt intermodal operations for extended periods.
  • Westbound voyages from Asia are reportedly fully booked until Chinese New Year (starting February 10).
  • Some carriers are responding to high market rates, reaching $10,000 per 40ft for prompt shipments from China to North Europe, by adding extra loaders to cope with demand surges.
  • Despite Italy formally withdrawing from China's Belt and Road Initiative (BRI) in December, China continues to invest in the country.
  • Chinese industry sees opportunities in the Italian commercial arena, and Prime Minister Giorgia Meloni has acknowledged the potential for good relations with China outside the BRI.
  • COSCO, a Chinese state-owned shipping giant, recently acquired Italian integrated logistics company Trasgo through a joint venture called COSCOS.
  • The acquisition is viewed as a demonstration that Chinese companies, including COSCO, are still investing and seeking control in Italy despite Rome's exit from the Belt and Road Initiative.
  • COSCO considers the takeover of Trasgo, a leading global player in integrated logistics, as a crucial step in extending its operations throughout Europe.
  • The acquisition provides COSCO with a foothold in Italy's warehousing sector, with Trasgo owning 14 warehouses totaling 270,000 square meters.
  • Chinese policymakers view overseas warehouses as strategic investments, contributing to China's global trade and supporting the objectives of the Belt and Road Initiative.
  • While Rome may have left the BRI, China continues to pursue BRI objectives through investments in Italy, leveraging acquisitions beyond major infrastructure like ports.
  • Trasgo offers services such as cargo handling, transportation, and customs operations, specializing in industries like automotive, industrials, and high-tech products.
  • Chinese investments in logistics, like the COSCO-Trasgo deal, signify a whole-of-supply-chain approach to industrial competition, expanding China's influence over global trade beyond ports.
  • The logistics market in the Asia-Pacific (APAC) region is projected to witness substantial growth, with an estimated increase of USD 145.4 million from 2022 to 2027.
  • The growth trajectory is expected to follow a Compound Annual Growth Rate (CAGR) of 5.25% during the forecast period.
  • Market segmentation includes types such as 3PL (Third-Party Logistics) and 4PL (Fourth-Party Logistics), end-users spanning manufacturing, automotive, food and beverage, and others, and geographical coverage across APAC.

Central China to USA and Europe

  • Rates from SHA to Europe and the US have seen a steady increase this week.
  • Increased market activity is attributed to the shipment of e-commerce and bulk goods.
  • From NGB to Europe and the USA, the market has become busier this week.
  • It is recommended to book space 4-5 days in advance of the cargo ready date.

North China to USA and Europe

  • Rates from TSN to Europe and the US remain low for Korean Airlines to both destinations.
  • Adequate space is available for both destinations this week.
  • Rates from PEK to Europe and the US with most airlines are at a lower level this week.
  • Major services from PEK to Europe include Singapore Airlines, Cathay Pacific, Lufthansa, Air China, KLM, Air France, Japan Airlines.
  • Booking space 3-4 days ahead of the cargo ready date is advised.
  • Major services from PEK to the US include Cathay Pacific, Japan Airlines, All Nippon Airways, and Eva Air, with rates remaining at a lower level.
  • It is recommended to book space 5-6 days ahead of the cargo ready date.
  • From TAO to Europe and the US, space is available.
  • ETD from TAO to the US is 3-4 days after booking.
  • Spot rates are available for dense cargo.

South China to USA and Europe

  • From CAN to Europe and the USA, rates currently remain stable.
  • But there is a possibility of an increase over the upcoming weekend, and space may become tight.
  • All shipments require checking with the carrier for rates on a case-by-case basis.

Turkey → North America

  • U.S. West Coast ports are preparing for a surge in imports, driven by a convergence of supply chain and geopolitical issues.
  • Factors contributing to the situation include the resumption of inventory build-up, returning flows diverted during last year's labor contract negotiations, transit issues in the Panama and Suez canals, and concerns about potential disruption in U.S. East Coast ports due to ongoing labor talks.
  • Recent months have seen substantial increases in throughput at West Coast ports, surpassing the performance of East and Gulf Coast ports, with expectations of this trend continuing.
  • Shipping rates from Asia to the U.S. West Coast have outpaced those to the East Coast, signaling optimism among ocean carriers.
  • Despite concerns about congestion, there is confidence that ports can handle the increased volume, attributed to recent infrastructure projects and terminal measures, such as limiting empty container intake to create space for imports.
  • However, questions linger regarding trucking capacity, as significant volume drops in Los Angeles and Long Beach have led to capacity reductions. The impending transition to electric trucks in California is further increasing capacity constraints, along with challenges related to chassis ownership.

North America → Turkey

  • National Retail Federation (NRF) expresses concerns about a potential strike at US East Coast terminals.
  • NRF urges International Longshore Association (ILA) and United States Maritime Alliance (USMX) to resume contract negotiations before the contract's September 30 expiration.
  • Negotiations focus on worker pay, work allocation, and port automation.
  • Vessels idle at the Panama Canal due to historically low water levels, reducing daily transit capacity from 36 to 22 vessels.
  • A further decrease to 16 vessels per day is expected in February.
  • No positive outlook for improvement in the coming months.
  • Rates on the TransPacific expected to remain high due to reduced capacity, persisting through the first and second quarters.
  • The "Denizli Disaster Master Plan," initiated by the Denizli Metropolitan Municipality, covering a range of disasters such as earthquakes, floods, and fires, has reached completion.
  • Denizli Metropolitan Municipality Mayor Osman Zolan emphasized the significance of disaster preparedness.
  • They stated that while disasters cannot be prevented, taking precautions is crucial.
  • The plan, unique in Turkey for its all-encompassing approach to various disasters, has concluded with the "Evaluation and Weighting Technical Workshop" in its third phase.
  • The workshop brought together stakeholders, including scientists, local governments, public institutions, and non-governmental organizations, fostering collaboration and knowledge-sharing.
  • Mayor Osman Zolan, along with Deputy Secretary General Seval Gebeş and Ömer Faruk Özer, attended the technical workshop, highlighting the ongoing occurrence of earthquakes, fires, floods, and landslides globally.
  • Stressing the need for proactive measures based on scientific insights to mitigate the impact of disasters, Mayor Zolan underscored the impossibility of preventing disasters entirely but emphasized the importance of prevention, damage reduction, and precautionary efforts.

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: 43 minutes for single transactions, and 68 minutes for double transactions.
  • APMT gate will not have a gate open on Saturdays.
  • All terminal gates, except APMT, are closed on January 15, 2024. This is in observance of Martin Luther King Jr. holiday.

 

Norfolk:

  • Currently, most vessels berth on arrival, however, the bigger vessels wait approx. 2 days for a berth.
  • Average gate turn times are 33 / 47 minutes for single and double transactions respectively.
  • Berths are recovering from the holiday backlog.
  • Recent bad weather has delayed the return to normal.

 

Charleston Terminal:

  • Waiting time for vessel berthing is 2 days at Wando Welch Terminal and 1.5 days at North Charleston Terminal.
  • Average truck turn times: 19  minutes at Wando Welch Terminal, and 22 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 / 53 minutes for single and double transactions respectively.
  • Import dwell time is 3.5 days.
  • 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.
  • 2 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 40 minutes and Bayport Container Terminal is 45 minutes.
  • Loaded import dwell is at 3.6 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 6 days at Oakland Int’l Container Terminal (OICT) and 3 days at TraPac.
  • Average import deliveries can take up to 4.7 days at TraPac and 3.4 days at OICT.
  • Average gate turn times are 63 / 68 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 Husky and 8 days at WUT at Tacoma.
  • 2 days waiting time in Seattle.
  • Import deliveries are 3 days at Husky – due to EB/WB railcar imbalance, 1.3 days at Washington United Terminal, and 1-3 days at T18.
  • The average gate turn times are 29 minutes for T18, 38 minutes for Washington United Terminal, and 34 minutes for Husky.
  • Terminal 18 will be closed on January 12 and January 15, 2024.
  • Husky will be closed on January 15, 2024.
  • Washington United Terminal has not confirmed closures for January, 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 4.4 days, and import units on the street are averaging at 4.8 /6.8 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 22 / 70 minutes, depending on the terminal.

 

Chassis Pools

All pools operating as normal except for:

  • Columbus – Deficit on 20’ and 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

Range

Port

Vessels at Anchor

Vs Last Week

Waiting Time

Vs Last Week

PNW

Vancouver

0

-

0

-

PNW

Seattle

0

-

0

-

PSW

Oakland

2

-2

2

-1

PSW

LA/LB

0

-

0

-

USEC

New York

0

-

0

-

USEC

Norfolk

3

+2

1

-

USEC

Charleston

0

-

0

-

USEC

Savannah

3

-2

2

-

USGC

Miami

0

-

0

-

USGC

Houston

2

-4

3

-

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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