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Freight market update - 28 February 2024

Beeontrade

·

February 2024

8 min read

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Freight market update - 28 February 2024

From the Editor’s Desk

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Key takeaways for the US

  • The situation in the Bab Al-Mandab Strait remains unresolved with ongoing attacks by Houthi forces.

  • On February 20th, the EU initiated the Aspides Mission to safeguard ships in the Suez Canal, deploying 4 frigates for protection.

  • Rates are decreasing for the initial half of March, with a noticeable contrast between certain carriers in the UK market and those in North Continent Ports, primarily attributed to low demand extending from post-Q4 into Q1 2024.

  • ONE is set to introduce a new shipping route, AP1 loop, connecting Vietnam, China, Taiwan, and the USA by early May. The loop will be a collaborative effort with Wan Hai lines, spanning an 8-week cycle.

  • The Panama Canal Authority has unveiled plans to allocate over $8.5 billion in capital investments for sustainability projects in the next 5 years.

  • Notably, this investment surpasses the $5.4 billion cost of the Panama Canal expansion, marking it as the most substantial improvement project in the Canal's history.

Read on for more in-depth updates.

Beeontrade's Guide to Ocean Alliances - Learn how shipping alliances shape the global trade landscape.

Ocean Freight Market Updates

Asia → North America

US/CA

Transpacific Trends and Market Updates

  • Rates are decreasing for the initial half of March, with a noticeable contrast between certain carriers in the UK market and those in North Continent Ports, primarily attributed to low demand extending from post-Q4 into Q1 2024.
  • Negotiations for long-term deals are under consideration post-Chinese New Year, as carriers reevaluate demand patterns.
  • While some carriers are open to such agreements, the majority are holding off for more clarity on the market situation.
  • February's capacity is fully reserved, and March's availability varies among carriers.
  • The current week and the following one witness a prevalence of blank sailings due to factory closures linked to Chinese New Year.
  • ONE is set to introduce a new shipping route, AP1 loop, connecting Vietnam, China, Taiwan, and the USA by early May.
  • The loop will be a collaborative effort with Wan Hai lines, spanning an 8-week cycle.
  • The route will include stops at Cai Mep, Shekou, Xiamen, Taipei, Ningbo, Shanghai, Los Angeles, Oakland, and then returning to Vietnam.
  • The vessels operating on this loop will have a capacity ranging from approximately 5,500 to 14,000 TEU.
  • The agreement for this service involves a minimum 12-month contract.

Central China to USA

  • From SHA to the USA, there is no change compared to the previous week, and the market is sluggish.
  • Rates from NGB to the USA have remained steady this week.
  • It is recommended to book 4-5 days in advance of the cargo ready date.

North China to USA

  • Korean Airlines from TSN to the USA are experiencing increased and fluctuating rates, while Asiana Airlines confirms rates on a case-by-case basis.
  • DLC/PEK to the USA sees fluctuating rates with most airlines this week, and market rates are expected to return to normal levels, but it is advised to check on a case-by-case basis.
  • Space is somewhat tight from TAO to the USA, with increased rates, and spot rates are applicable for dense cargo.

South China to USA

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

Turkey → North America

  • The Panama Canal Authority has unveiled plans to allocate over $8.5 billion in capital investments for sustainability projects in the next 5 years.
  • This commitment to address climate change stems from persistent low water levels, hovering around 13.4 meters, without a clear indication of when levels will return to normal.
  • Notably, this investment surpasses the $5.4 billion cost of the Panama Canal expansion, marking it as the most substantial improvement project in the Canal's history.
  • Presently, only 5 containerships are allowed to transit per day since the beginning of 2024, causing delays of up to 3 days. Under typical conditions, up to 32 vessels would pass through daily.
  • Amazon Turkey is making significant strides in employment at the Tuzla Logistics Center in Istanbul, with openings for 400 warehouse operators. These individuals will be engaged in tasks related to the collection, packaging, and shipment of customer orders.
  • This move aligns with Amazon's strategy to expand its operations in Turkey and contribute to the local economy.
  • The establishment of the Tuzla Logistics Center, representing an investment of over 100 million dollars in 2022, is part of Amazon's commitment to creating economic opportunities and supporting local development in the countries where it operates.
  • The 400 newly hired warehouse operators will play a crucial role in achieving growth targets at the Logistics Center in Tuzla. This initiative aims to enhance Amazon Turkey's capacity to provide faster and more efficient services to customers while boosting local employment.
  • Turkish Cargo has appointed Globalink Logistics as its Air Cargo Sales (ACS) agent in Turkmenistan.
  • Globalink Logistics, an international freight forwarding company, has achieved a significant milestone by securing the role of ACS agent for Turkish Cargo in Turkmenistan.
  • Turkish Cargo, a major player in cargo transportation, holds the top position in Europe and ranks fourth globally in terms of total cargo volume, serving 132 countries.
  • The strategic alliance with Globalink Logistics aims to enhance Turkish Cargo's air transport services, leveraging its extensive network for continued growth.
  • Globalink Logistics also serves as the representative for Turkish Cargo in Kazakhstan and Kyrgyzstan, expanding the scope of their collaboration.
  • In 2016, Turkmenistan's capital inaugurated a new international airport constructed by Turkey's Polimeks at a cost exceeding $2 billion.

North America → Turkey

  • The situation in the Bab Al-Mandab Strait remains unresolved with ongoing attacks by Houthi forces.
  • On February 20th, the EU initiated the Aspides Mission to safeguard ships in the Suez Canal, deploying 4 frigates for protection.
  • Carriers are opting for reroutes via the Cape of Good Hope, leading to extended transit times and increased TEU*Miles.
  • Sea-Intelligence reports that diversions around the Cape of Good Hope may cause a 16% rise in TEU*Miles in 2024.
  • In 2023, global TEUMiles stood at 860 billion, and the projected demand for 2024 is 994 billion TEUMiles to transport the same cargo volume.
  • Anticipated rate increases are expected to persist into March, driven by limited equipment availability, notably in southern Germany, Poland, and the Western Mediterranean, in most parts of Europe.
  • Blank sailings and vessel redeployments have been implemented to address the ongoing situation in the Red Sea.
  • Despite these adjustments, overall capacity remains relatively stable.
  • Minimal impact on container vessels transiting has been observed year-over-year in January, regarding the Panama Canal drought issues.
  • The Turkish Navy marked the strengthening of its fleet with the commissioning of four new vessels during a grand ceremony held at the Sefine Shipyard on January 19, 2024.
  • The commissioned vessels include the first I-class frigate, TCG Istanbul (F-515), the next-generation fleet oiler TCG DERYA, and the logistics ship TCG Ütğm. Arif Ekmekçi, and the unmanned surface vessel MARLIN.
  • Turkish President Recep Tayyip Erdogan, along with cabinet ministers, Turkish Armed Forces leadership, and representatives from defense industry companies, attended the ceremony at the Sefine shipyard in Yalova on January 20, 2024.
  • Turkey's capability extends beyond ship construction to producing sensors, payloads, weapons, and ammunition required for domestically built ships, as highlighted by President Erdogan during the ceremony.
  • President Erdogan also announced that, in addition to UAVs and UCAVs, the Turkish defense industry will focus on developing various combat platforms for the navy, including unmanned and autonomous naval vehicles, submarine platforms, and aircraft carriers.
  • The Turkish Defense Agency (SSB) emphasized the electronic warfare (EW) capabilities of the MARLIN Unmanned Surface Vessel (USV), stating that it is the world's first USV with comprehensive EW capabilities.
  • According to Germany’s Federal Statistics Office, China remained Germany’s primary trading partner in 2023, with a trade value of €253.1 billion, holding the top position for the eighth consecutive year.
  • However, trade with China saw a significant decline in 2023, with a 19.2% decrease in the value of goods imported from China, totaling €155.7 billion.
  • Goods exported to China also fell by 8.8% to €97.3 billion, resulting in a trade deficit of €58.4 billion, the second-largest since 1950.
  • Despite China's continued lead, the USA is closely following Germany's second most important trading partner, with a trade value of €252.3 billion in 2023.
  • GTAI suggests that the narrowing gap between trade values with China and the USA, coupled with changing strategies of German companies focusing more on localization in the Chinese market, may lead to the USA replacing China as Germany's top trading partner in 2024.
  • Trade with the USA experienced growth in 2023, with goods worth €157.9 billion exported to the United States, marking a 1.1% increase from the previous year.
  • Imports from the USA also rose by 1.1% to €94.4 billion, resulting in an export surplus of €63.5 billion.
  • GTAI cautiously forecasts that if the positive trend in bilateral trade continues, the USA could surpass China as Germany’s most important trading partner in 2024, depending on factors such as the outcome of the presidential election and subsequent trade policies.

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: 48 minutes for single transactions, and 73 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 33 / 47 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 3 days, depending on the size of the vessel.
  • Average gate turn times are 40 / 57 minutes for single and double transactions respectively.
  • Import dwell time is 2.3 days.
  • Berth 2 is back online helping to reduce waiting times.

 

Houston:

  • Barbours Cut Terminal has up to 2 days 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 43 minutes.
  • Loaded import dwell is at 3.7 days.

 

Oakland:

  • Average wait time of up to 6 days at Oakland Int’l Container Terminal (OICT) and 2 days at TraPac.
  • Average import deliveries can take up to 4.7 days at TraPac and 4 days at OICT.
  • Average gate turn times are 65 / 71 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 1.5 days at Husky – due to EB/WB railcar imbalance, 2.2 days at Washington United Terminal, and 1-3 days at T18.
  • The average gate turn times are 27 minutes for T18, 30 minutes for Washington United Terminal, and 42 minutes for HUSKY.
  • Terminal 18 and Husky terminals will be closed on March 1, 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 3.1 days, on-dock rail dwell is 4.6 days, and import units on the street are averaging at 4 /5.5 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 / 84 minutes, depending on the terminal.

 

Chassis Pools

All pools operating as normal except for:

  • Nashville – Deficit on 20’ and 40’ Chassis.
  • Omaha - Constrained 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

Range

Port

Vessels at Anchor

Vs Last Week

Waiting Time

Vs Last Week

PNW

Vancouver

0

-

0

-

PNW

Seattle

0

-

0

-

PSW

Oakland

2

-5

4

-1

PSW

LA/LB

0

-

0

-

USEC

New York

0

-

0

-

USEC

Norfolk

3

+2

1

-

USEC

Charleston

0

-

0

-

USEC

Savannah

3

-1

2

-

USGC

Miami

0

-

0

-

USGC

Houston

4

+1

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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