From the Editor’s Desk
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Key takeaways for the US
- Lunar New Year volume crunch is now back to normal.
- Congestion and delays lead to unexpected shipments and blank sailings.
- Enhanced growth compared to pre-pandemic levels.
- Operations returning to normal and become fluid.
- Earthquake in Turkey causes disruptions.
Read on for more in-depth updates.
Ocean Freight Market Update
Asia → North America
U.S / CA
Returning to normal after the pandemic and Lunar New Year
- Space and volume issues that arose due to the Lunar New Year are now slowly arriving back to normal.
- Market capacity is consistently higher than those witnessed in past years.
- Rates are yet to get stabilized and we can expect routine blank sailings to continue until then.
- TPEB demand is low and is keeping West Coast ports and rail congestion low.
- Booking intakes are gradually improving in various ports but volumes need to be balanced accordingly.
- We expect proceedings to continue as they did in the first half of February. The second half is generally the same.
- Imports into East Coast ports are increasing compared to pre-pandemic levels.
- The imports as of December 2022 are significantly higher compared to those levels of December 2019.
- However, import levels of West Coast ports over the same period have dropped.
- This was because the combined imports in Los Angeles and Long Beach were down by 15% and Oakland was down by 19%. Furthermore, Seattle and Tacoma were down by 20%.
- It is worth noting that capacity levels in Asia following the Chinese New Year have remained high despite the blank sailing programs.
- The Asia-North America West Coast will be roughly 353,800 TEU per week.
- The East Coast will witness 221,700 TEU and the average in Asia-North Europe will be 314,900 TEU per week.
Conclusions
Rates: The rates will remain soft on most origin-destination combinations.
Space: Space open, no issues with equipment.
Recommendation: Book at least two weeks prior to the date your vessel gets ready to depart. Keep the upcoming blank sailings in mind owing to this time of the year. Be flexible and plan your shipments keeping delays and congestion in mind.
Turkey → North America
- The number of blank sailings in the trade has been low despite the lower demand.
- As MSC and Maersk are adding more vessels in the Mediterranean loops, we can expect capacity to increase in the upcoming weeks.
- Demand is not picking up pace as it was in 2022.
- Due to these inconsistencies, the downward trend in rates and demand steadily continues.
- Furthermore, a lack of Chinese imports is resulting in fewer containers being repositioned.
- With congestion easing, more space is coming online on the US East Coast and US West Coast.
- Equipment is also getting better with low empty stacks at inland depots getting better in some areas.
Earthquakes cause unfathomable disruptions in Turkey
- Turkey has faced five back-to-back earthquakes since Monday. This has left several people injured and much more dead in Turkey and Syria.
- The total death toll is around 11,200 in both Turkey and Syria combined thus far. The earthquake which occurred in the Pazarcik district hit several provinces nearby at a magnitude of 7.8.
- There were four more earthquakes consecutively after this in nearby districts and extended all over the two locations.
- Due to one of these earthquakes, a fire erupted in Iskenderun port in Turkey.
- This port is currently inactive and Mersin port is temporarily being used to set up hospitals for the injured.
- The Mersin port is working at around 50% capacity at the moment to bear the brunt of the damage.
Conclusions
Rates: Rates are dropping constantly with a consistent downward trend. The demand may dip even further into negative territory in the upcoming months. It is not picking up at the same pace witnessed in 2022.
Space: No capacity issues or issues with space due to the congestion easing up. The space in USEC and USWC is coming online due to consistent clearance of congestion.
Recommendation: No issues with equipment as it is getting progressively better over time. The low empty stacks at inland depots are getting better in specific areas. It is best to prioritize pickup from the Port of Loading and plan your cargo-ready dates two weeks in advance. Request premium service for higher reliability and no-roll.
North America → Turkey
- Low capacity utilization levels and NO space constraints are met in these ports.
- Capacity is available across all major services and supply has outpaced demand.
- Carriers are open for volume opportunities and this is a good time to book in advance.
Conclusions
Rates: Stable rates over the last week.
Space for capacity: Space is very open and allocation requests can be made for carriers in the upcoming weeks. The probability of acceptance is very high due to high volume weeks.
Space for equipment: No major equipment issues aside from blank sailings.
North America Vessel Dwell Times
Terminal Updates
- The New York terminal has no vessel berthing delays at Global Container Terminals Bayonne and Maher LLC.
- There are no empty shut-out situations at any of the terminals reported this week.
- The situation at Norfolk terminal remains fluid and most vessels are expected to berth on arrival.
- At Charleston terminal, channel closure was witnessed due to fog.
- This has resulted in two days of berth waiting time for vessels at the NCT.
- Conditions are similar at the Savannah terminal due to the fog. The situation at the terminal remains fluid and intermittent river closures are experienced.
- The yard utilization has improved at the Prince Rupert terminal. But it remains congested with 3-14 days of berthing delays.
Intermodal Updates
- The capacity limitation in certain markets is witnessed due to unexpected spikes in import volumes.
- There is also a severe shortage of drivers which is resulting in unforeseen delays and congestion.
- Schneider is working with sustainable partners to reduce greenhouse gas emissions.
- The goal is to reach 26% operations by 2030 against a 2018 baseline.
- This is to be achieved by acquiring battery electric locomotives to be a part of the largest fleet of them.
- There will also be a significant investment in modernized locomotives for which testing procedures are underway.
- The tests in California hope to test 100% renewable fuel blend in locomotives.
- Schneider’s major rail partners in the East and West have publicly committed to setting ambitious goals and sustainable means to achieve them.
US Midwest and US Gulf Updates
US Domestic Trucking Market Trends
• The national Outbound Tender Rejection Index (OTRI) has failed to rise above 6% during Christmas.
• This is the first time this has been recorded in the last five years.
• Overstuffed inventories are resulting in rapid demand erosion.
• Eroding consumption is coming out of an overstimulated goods economy. Due to this, the transportation markets are weakening.
• These conditions may persist throughout the first quarter of 2023. Please note that this is a minimum forecast.
• The spot market will be filled with discounted freight during the slowest time of the year.
• This is provided there is little to no disruption in the carrier networks.
Texas flatbed carriers are enjoying some of the best outbound spot rates in the past seven years. At an average linehaul rate of $2.19/mile, only last year has been higher for the third week of the year when rates were $2.54/mile. Boosted by more substantial imports across the southern border and through the Port of Houston, 2023 is shaping up another good year for flatbed freight demand in the Lone Star state. Inbound average flatbed rates are also the second-highest in seven years at an average of $2.26/mile.
Final Thoughts
With the given updates, we can safely conclude that the market is faring well with a sufficient supply of equipment and capacity.
Some areas are quickly returning to normal after the Lunar New Year, the Chinese New Year, and inclement weather. There is a shortage of drivers in some places but these are not resulting in any major delays or congestion.
There are mostly blank sailings planned for some ports while others are not planning any in February. It is best to make informed decisions and choose ports that are open and without space or equipment issues. It will help you import or export without the hassle and through sufficient manpower.
Keep the blank sailings in mind and various other restrictions. Unexpected congestion and delays also need to be considered. We can expect a steady and consistent increase in the market owing to these trends which are bound to change in the upcoming days.
We would also like to extend our deepest condolences and heartfelt support to the families and workers affected by the earthquake. We hope things get back to normal although we understand the deep repercussions they are going to leave behind.
With that being said, we are grateful that you perused our newsletter till the end. Be sure to subscribe to us and stay notified about the latest weekly market updates.
Beeontrade Team
