Freight market update - 21 November 2024

Greetings!

Our objective is to make your shipping experience easier by offering you the latest and most informative details and insights regarding the freight market. We aim to provide accurate and relevant content that brings benefits to your business.

We highly value your feedback as we continuously strive to improve the quality of our weekly market updates. We value your thoughts on our current content and encourage you to suggest specific topics that you would like us to cover in more depth.

We wish to create the most informative newsletter possible. We appreciate your continued readership and subscription, and we thank you for taking the time to provide us with your valuable feedback, which will help us enhance our future performance.

• Hapag-Lloyd indicated a potential cargo surge ahead of the Lunar New Year in January 2025.

• Hapag-Lloyd forecasts a 3% growth in cargo demand for the coming year.

• Regarding U.S. port labor concerns, Habben Jansen expressed hope for a peaceful resolution between the USMX and ILA before the January 15 contract deadline.

• The ILA, representing 45,000 workers at East and Gulf Coast ports, has ended contract negotiations with the USMX.

• USMX emphasized goals such as improving worker safety, operational efficiency, and port capacity.

• With Donald Trump returning to the White House, additional tariffs of 10–20% on all imports and a steep 60% on Chinese products could be implemented.

• U.S. retailers are preparing for potential trade disruptions, with 350,000 additional TEUs expected in November and December compared to October.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• Senior air cargo executives have cautioned against over-reliance on the booming e-commerce sector, emphasizing the need for a balanced approach.
• Industry leaders at TIACA’s Air Cargo Forum in Miami agreed that long-term growth depends on maintaining relationships with traditional customers.
• Ensuring capacity remains available for traditional clients is seen as crucial for sustainable growth in the air cargo industry.
• Jens Krems, head of cargo for United Airlines, stated that the airline prioritizes capacity for its regular customers over e-commerce due to limited capacity.
• Similarly, Finnair emphasized safety and preferred traditional sectors like pharmaceuticals and perishables.
• Anna-Maria Kirchner, global sales head at Finnair Cargo, raised concerns about undeclared items in e-commerce shipments, despite strict EU regulations.
• Brandon Fried, executive director of the Airfreight Forwarders Association, warned against prioritizing short-term gains from e-commerce.
• Fried emphasized that traditional shippers still value personal service and expertise.
• He noted, "Shippers still want a personal touch. They still want you to be able to handle complex logistics challenges. And we want the room to be there on the planes."
• With Donald Trump returning to the White House, additional tariffs of 10–20% on all imports and a steep 60% on Chinese products could be implemented.
• These measures mirror his previous trade policies, which reduced the share of Chinese imports in the U.S. from 40% in 2016 to 27% by 2021.
• The 2018 trade tensions also saw a 70% increase in spot rates.
• Southeast Asia, India, and Mexico are well-positioned to benefit from redirected trade flows.
• Mexico, in particular, could emerge as a key gateway for U.S. imports.
• However, concerns persist over potential legislative hurdles that could target cargo routing through Mexico.
• Domestically, these changes may drive higher demand for rail, trucking, and warehousing services, providing a boost to these markets.
• U.S. retailers are preparing for potential trade disruptions, with 350,000 additional TEUs expected in November and December compared to October.
• Demand has weakened due to the traditional slow season, but space availability has improved.
• Congestion at transshipment hubs, including Colombo, Singapore, and Port Klang, continues to cause delays.
• Shortages of 20-foot containers in Delhi and Nhava Sheva remain a significant concern.
• Operational disruptions persist in Bangladesh due to strikes and protests by garment factory and transport workers.

Turkey → North America

• The International Longshoremen’s Association (ILA), representing 45,000 workers at East and Gulf Coast ports, has ended contract negotiations with the United States Maritime Alliance (USMX).
• The dispute centers around the proposed use of semi-automated equipment, which the ILA claims would eliminate union jobs.
• The ILA stated, “USMX introduced language in their proposal for semi-automated equipment to be used at ILA ports, which this union outright rejected.”
• The ILA described the proposal as a renewed attempt by USMX to cut ILA jobs through automation.
• The union has refused to include automation technology in the terms of the new six-year master contract.
• Earlier this year, the ILA staged a three-day strike, halting operations at 36 port facilities and disrupting billions of dollars in goods.
• The strike ended with an agreement to extend the current contract until 15 January 2025.
• USMX has defended its proposal, stating that the aim is to modernize port operations and not eliminate jobs.
• USMX emphasized goals such as improving worker safety, operational efficiency, and port capacity.
• Despite these assurances, the ILA views automation as a direct threat to their workforce.
• Negotiations remain at a standstill, with no resolution in sight.
• Brazil’s main ports are facing reduced capacity as the peak season concludes, causing skipped port calls, rerouted cargo, and vessel schedule delays.
• Exporters are struggling to secure empty containers as ports prioritize clearing backlogs over container availability.
• The Port of Santos has reached operational capacity, leading to ships skipping berthing windows or omitting the port entirely.
• Cargo rolls have increased as dockworkers focus on addressing backlogs, delaying the return of empty containers to exporters.
• The shortage of empty containers is particularly severe for 20-foot containers, heavily used for sugar and specialty commodity exports.
• Efforts to expand berthing areas at some Santos terminals have not fully alleviated the congestion.
• Renovations at nearby ports, such as Navegantes, have added to logistical challenges.
• Increased traffic at Santos due to congestion at Itapoa has further compounded delays.
• Some relief has come from the Port of Itajai, which has absorbed a portion of the cargo.
• The current slowdowns follow earlier disruptions from the October strike at U.S. East and Gulf Coast ports, which caused vessel bunching and delayed schedules.
• Despite the challenges, space on vessels from Asia and North America heading to Brazil remains available.

North America → Turkey

• Hapag-Lloyd indicated a potential cargo surge ahead of the Lunar New Year in January 2025.
• This surge could be driven by shippers aiming to avoid possible new U.S. tariffs on Chinese goods under the incoming Trump administration.
• Hapag-Lloyd CEO Rolf Habben Jansen acknowledged the possibility of a demand spike but stated it was too early to estimate its magnitude.
• Speaking after Hapag-Lloyd’s Q3 earnings release, Habben Jansen reported that cargo volumes recovered quickly after China’s October holidays.
• He noted that current demand remains “robust.”
• The extent of demand driven by pre-loading ahead of tariff changes remains unclear.
• Any pre-Lunar New Year demand surge is expected to push short-term freight rates higher.
• Habben Jansen suggested that potential new U.S. tariffs might alter trade patterns, as seen during 2017-2021 when manufacturers shifted production away from China.
• He expressed optimism about global trade growth, emphasizing the importance of free trade in fostering global wealth.
• Hapag-Lloyd forecasts a 3% growth in cargo demand for the coming year.
• Regarding U.S. port labor concerns, Habben Jansen expressed hope for a peaceful resolution between the USMX and ILA before the January 15 contract deadline.
• He acknowledged recent talks had stalled over automation disputes.

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:

• 3 days waiting time expected for APMT, 5 days at Maher Terminals, and up to 4 days at Port Liberty Terminal Bayonne.
• Average gate turn times are 43 / 67 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 2.5 days for a berth.
• Average gate turn times are 32 minutes for single transactions and 46 minutes for double transactions.
• One crane is out of service until January 2025.
• The waiting time for bigger ships is up to 3 days.
• The waiting time for smaller ships is up to 1.5 days.

Charleston Terminal:

• 3 days waiting time for Wando Welch Terminal and 6 hours for North Charleston Terminal.
• Average truck turn times are 20 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 5 days, depending on the vessel's size.
• Average gate turn times are 33 minutes for single transactions and 53 minutes for double transactions.
• Import dwell time is 4.5 days. Export dwell time is 4.7 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 50 minutes for double transactions.
• Average gate turn times at Bayport Container Terminal are 34 minutes for single transactions and 53 minutes for double transactions.
• Loaded import dwell is 3.5 days at Barbours Cut and 3.3 days at Bayport.

Oakland:

• No waiting time at OICT and at TraPac.
• Average import deliveries can take up to 4.5 days at TraPac and 3.5 days at OICT.
• Average gate turn times are 78 minutes at OICT and 68 minutes at TraPac.

Seattle-Tacoma:

• No waiting time at Husky and Washington United terminal at Tacoma.
• No waiting time in Seattle.
• Import rail dwell are 2.3 days at Husky, 2.3 days at Washington United Terminal, and 3 to 5 days at T18.
• The average gate turn times are as follows: 32 minutes for T18, 27 minutes for Washington United Terminal, and 92 minutes for Husky.
• T18 will be closed on November 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:

• Minneapolis / St. Paul - Constrained on a 40' chassis.
• Cleveland – Deficit on 40’ chassis.
• Louisville – Deficit on 20’ and 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.