Freight market update - 3 April 2024

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• Maritime consultancy Drewry suggests that Baltimore’s container volume diversions and anticipated market growth in 2024 might pose challenges for U.S. East Coast ports.

• If Baltimore's capacity is redirected, average utilization rates could reach 79%, potentially causing congestion issues.

• The Port of Baltimore managed 11.7 million tonnes of cargo and 1.1 million TEUs of containers last year.

• Container exports from 18 Asian countries and regions to the U.S. soared in February, driven by strong demand.

• According to data from PIERS, the Japan International Freight Forwarders Association (JIFFA) and the Japan Maritime Center (JMC) reported a 29.4% year-on-year increase in exports to 1.6 million TEUs.

• China's logistics industry experienced significant growth in the first quarter (Q1), buoyed by a surge in industrial production and increased transport demands.

• The logistics market index rose to 51.5% in March, marking a 4.4 percentage point increase from the previous month, while the warehousing index climbed to 52.6%, up by 8.1 percentage points from February.

Read on for more in-depth updates.

Asia → North America

US/CA

Transpacific Trends and Market Updates

• China's logistics industry experienced significant growth in the first quarter (Q1), buoyed by a surge in industrial production and increased transport demands.
• The logistics market index rose to 51.5% in March, marking a 4.4 percentage point increase from the previous month, while the warehousing index climbed to 52.6%, up by 8.1 percentage points from February.
• Business volume and new orders indices also exhibited growth, with the total business volume index reaching 51.5% in March, up by 4.4 percentage points, and the new orders index increasing by 1.2 percentage points to 53.4%.
• In the first two months of 2024, China witnessed a 5.9% increase in social logistics, amounting to approximately 55.4 trillion yuan ($7.81 trillion).
• According to the China Federation of Logistics and Purchasing, the surge in industrial production significantly drove transport requirements, contributing to the industry's notable upswing in Q1.
• The business expectations index remained optimistic, standing at 55.3% for two consecutive months, indicating sustained confidence within the sector, as reported by Chinese media.
• Container exports from 18 Asian countries and regions to the U.S. soared in February, driven by strong demand.
• According to data from PIERS, the Japan International Freight Forwarders Association (JIFFA) and the Japan Maritime Center (JMC) reported a 29.4% year-on-year increase in exports to 1.6 million TEUs.
• Total exports in the first two months of 2024 showed a 22% rise.
• Most of the 18 economies witnessed significant growth in container exports.
• China experienced a notable surge of 29.5%, while South Korea rose by 14.1%.
• Taiwan saw a 20.3% increase, and Japan recorded a 14.3% rise in exports.
• Southeast Asia saw a substantial increase of 41.9% in shipments to the U.S.
• Vietnam made the largest contribution with a 46.9% increase in exports.
• Thailand's export volumes grew by 41.6%, Indonesia's by 27.4%, and Malaysia's by 52%.
• Overall, container exports from the region increased by 17.5%.
• Following the Chinese New Year holiday, there has been a slight increase in demand, particularly from BCO orders, leading carriers to announce a GRI for April.
• Despite this uptick, overall demand remains weak, and the sustainability of GRIs is questionable. Nonetheless, it is causing disruption in the spot market, particularly as medium-sized customers seek to commit to quarterly deals.
• Economic experts predict a 2% increase in global demand for 2024, with Europe expecting a 0.6% rise, the USA anticipating a 2.1% increase, and China projecting a 4.7% growth.
• Capacity is set to increase by 11% in 2024 and by 7% in 2025, with an order book totaling 7 million TEUs.
• Concerns arise regarding overcapacity in the long term, though the resolution of the Red Sea crisis could significantly influence this outlook.
• THE Alliance intends to reintroduce 2 Transpacific routes to the Pacific Northwest and the US East Coast in April.
• Simultaneously, ONE and Wan Hai are forming a new partnership concentrated on the Pacific Southwest, scheduled to begin in May.
• These strategic maneuvers are aimed at assuring customers that THE Alliance carriers will sustain competitiveness in the Transpacific market, especially following Hapag-Lloyd’s departure next year.
• E-commerce businesses from Shanghai (SHA) to the USA are delaying booking space, waiting for lower prices.
• As a result, rates are anticipated to decrease slightly.

Turkey → North America

• Red Sea challenges and resulting vessel diversions have caused longer transit times for Asia-Europe container supply chains but have not significantly disrupted them.
• European exporters shipping to the Middle East and Indian Subcontinent face increased transit times and higher freight rates for both outbound and inbound trades.
• Consequently, Indian businesses are increasingly sourcing materials from Far East suppliers.
• Maritime consultancy MSI reports a significant 34.5% year-over-year expansion in the Far East-Middle East/India trade in January, driven primarily by India's growing economy.
• This trade route has tripled in size compared to the Europe-Middle East/India trade.
• MSI projects a 16.4% year-on-year growth for the Far East-Middle East/India trade in the first quarter of 2024, while Europe-Middle East/India trade is expected to decline by -11.8%.
• The Indian Ocean Rim is anticipated to become a major growth market for carriers and freight service providers.
• Imports from China to India have surged by 21.6% year-on-year, particularly in manufacturing materials, contrasting with the consumer goods-driven Asia-Europe and Trans-Pacific trade.
• U.S. ports witnessed overall growth in container volumes year-over-year (y/y) in February, continuing a strong performance since the beginning of the year.

Port of Los Angeles

• Container activity surged by 60% in February compared to the previous year, marking the seventh consecutive month of y/y growth.
• Total TEUs handled by the port increased by 35% y/y.
• Port Executive Director Gene Seroka remains optimistic about the outlook for the second quarter, citing positive consumer spending and economic indicators.

Port of Long Beach

• Container volumes increased by 24.1% in February and by 20.7% in the first two months of the year.
• CEO Mario Cordero attributes this growth to cooling inflation, rising consumer confidence, and efforts to regain market share.
• Northwest Seaport Alliance (Ports of Seattle and Tacoma):
• Combined container volumes for the two ports saw a slight increase of 0.4% y/y in February.
• Although international imports slightly declined (-0.5%), overall volumes remained stable.

Port of Oakland

• Container volumes rose by 18.8% y/y, fueled by strong consumer spending in Northern California.
• Maritime Director Bryan Brande anticipates modest growth in cargo volume throughout the year.

Port of Houston

• Container volumes surged by 20% y/y in February, setting a record month for container exports with a 25% increase.
• Total container volume for the year increased by 12%.

Port of Georgia

• Container volumes increased by 14.4%, marking the second consecutive month of growth.
• Intermodal rail cargo volumes spiked by 39%, partially contributing to this growth.
• Georgia Ports Authority President Griff Lynch highlighted investments in rail infrastructure for long-term trade expansion.

South Carolina Ports Authority

• Container volumes saw a marginal increase of 0.5% y/y.
• President Barbara Melvin noted an 11% y/y gain in loaded import TEUs, reflecting strength in the economy.
• SC Ports set a record move count, handling 4,474 containers on and off a single vessel.

Ports of New York and New Jersey

• January container volumes increased by 3.4% y/y, though the ports released their numbers one month later compared to other ports.

North America → Turkey

• Maritime consultancy Drewry suggests that Baltimore’s container volume diversions and anticipated market growth in 2024 might pose challenges for U.S. East Coast ports.
• The collapse of the Francis Scott Key Bridge and the shutdown of the Port of Baltimore have significant consequences.
• Cargo is likely to shift to nearby ports such as Virginia and New York/New Jersey.
• Re-routing shipments to neighboring ports will result in increased freight shipping costs for shippers.
• New York/New Jersey ports dominate container traffic, holding 59%, followed by Virginia at 25%, Baltimore at 9%, and Philadelphia at 6%.
• Smaller terminals like Boston, Wilmington (Delaware), and others handle the remaining volumes.
• Drewry's Port Throughput Forecast for North America forecasts a potential 10.6% year-over-year growth in 2024.
• If Baltimore's capacity is redirected, average utilization rates could reach 79%, potentially causing congestion issues.
• The Port of Baltimore managed 11.7 million tonnes of cargo and 1.1 million TEUs of containers last year.

Baltimore Update

• A second temporary channel has been established in the waters surrounding the wreckage of the Francis Scott Key Bridge in Baltimore to resume trade and movement of goods in and out of the port.
• The first temporary shipping route commenced on Monday, with Captain David O’Connell emphasizing its significance as "an important first step" towards reopening the port.
• Officials announced the launch of a second route for deeper vessels on Tuesday, with plans for a third channel for larger vessels in the near future.
• New underwater images released by the US Navy on Tuesday reveal the wreckage deep in the Patapsco River.
• Meanwhile, the owners of the Dali ship have disclaimed all responsibility for the fatal crash and are seeking a cap of $43.7 million for any lawsuit settlements.
• In a court filing, Grace Ocean Private Limited and Synergy Marine PTE, the ship's owner and operator, denied fault or negligence, asserting that the collapse resulting in the death of six construction workers was not due to any wrongdoing on their part or that of any other involved parties.

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: 55 minutes for single transactions, and 85 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 32 / 45 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 2 days at Wando Welch Terminal and 0.5 days at North Charleston Terminal.
• Average truck turn times: 18  minutes at Wando Welch Terminal, and 21 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.
• This project will also limit the amount of class 1.1 and 1.2 that can be handled at the terminal during this time.
• 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.
• Frequent river closures are expected due to fog during this week.
• Average gate turn times are 36 / 50 minutes for single and double transactions respectively.
• Import dwell time is 2.4 days.
• Berth 2 is back online helping to reduce waiting times.

Houston:

• Barbours Cut Terminal has up to 1 day 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 35 minutes and Bayport Container Terminal is 53 minutes.
• Loaded import dwell is at 3.5 days.

Oakland:

• Average wait time of up to 4 days at Oakland Int’l Container Terminal (OICT) and 1 day at TraPac.
• Average import deliveries can take up to 7 days at TraPac and 8 days at OICT.
• Average gate turn times are 68 / 73 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:

• No waiting time at Husky and 3 days at WUT at Tacoma.
• 2 days waiting time in Seattle.
• Import deliveries are 2 days at Husky – due to EB/WB railcar imbalance, 4.4 days at Washington United Terminal, and 1-3 days at T18.
• The average gate turn times are 35 minutes for T18, 29 minutes for Washington United Terminal, and 63 minutes for HUSKY.
• Terminal 18 will be closed Fridays through March and April 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 2.8 days, on-dock rail dwell is 5.4 days, and import units on the street are averaging at 3.8 /6.2 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 / 61 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

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.