From the Editor’s Desk
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Key takeaways for the US
- TPEB capacity remains open post-Lunar New Year.
- Maersk shares new global integrator plans.
- Being a member of the VSA was not compatible with it.
- Low demand but very few blank sailings as things come back to normal.
Read on for more in-depth updates.
Ocean Freight Market Update
Asia → North America
U.S / CA
TPEB capacity remains open after the LNY break
- The market is arriving back to normal after the LNY break. The earlier space and volume crunches are steadying now.
- However, the market capacity has remained high and is notably higher than in the past few years.
- Blank sailings might continue if ports wish to stabilize their rates.
- The low TPEB demand is also impacting rail congestion. It is maintaining the rails and West Coast port at a low rate.
- Space is expected to remain open in the second half of February.
- Maersk shares its global integrator plans after its recent break up (2M alliance).
- It announced that being a member of the Vessel Sharing Alliance (VSA) was not compatible with its global integrator plans.
- Maersk aims to integrate its ocean business completely with its logistics business.
- Maersk requires a higher level of operational control to do that owing to the service it delivers to its customers.
- The shipping line has announced muted economic growth which will push the world’s container shipping volumes down.
- These volumes could reduce even as much as 2.5% this year.
Conclusions
Rates: Rates are soft on most origin-destination combinations.
Space: Space open, no issues with equipment.
Recommendation: We recommend blank sailings to continue. Book at least two weeks prior to the date your vessel gets ready to depart.
Turkey → North America
- Blank sailings are minimal despite lower demands.
- Capacity may increase in the upcoming weeks due to MSC and Maersk adding more vessels in the Mediterranean loops.
- Congestion is easing and space is coming online in the US East and West Coasts.
- Only seven vessels are at anchor and have a dwell of a maximum of one week.
- This has also resulted in improved equipment availability and low empty stacks at inland depots.
- It is best to prioritize pick up from the Port of Loading.
- Stabilization is expected to improve as we head into March.
Conclusions
Rates: Rates are constantly dropping and the downward trend is expected to continue for the next few months.
Space: No capacity issues or issues with space.
Recommendation: We suggest you book 2-3 weeks prior to your cargo-ready date and request premium service. This will ensure better reliability and no-roll.
North America → Turkey
- Rates are decreasing week over week.
- There are limited disruptions and very few blank sailings.
- However, equipment is an issue based on carrier choice and empty pickup locations.
- It is best for you to procure equipment from wet port vs inland container depots.
- This is because equipment deficits are experienced in several areas.
Conclusions
Rates: Reductions in rate witnessed in the second half of February.
Space for capacity: Space is open but capacity and equipment issues persist.
Space for equipment: Equipment issues have started owing to low import levels and the choice of carriers.
North America Vessel Dwell Times
Terminal Updates
- New ship-to-shore cranes are being delivered in Savannah.
- Vessel transit restrictions are expected to cause delays during the discharge of the cranes. This is between February 11 and 17.
- No vessel berthing delays are reported from New York terminals. The situation remains fluid across all the terminals.
- Barbour’s Cut is expected to experience berth congestion in the upcoming few days leading up to March.
- There is an influx of imports at Oakland. This could lead to vessel berthing delays and we expect congestion as well.
- All terminal gates at LA/LB are running as published. They are in line with the Pier Pass program.
- There is increased yard congestion at the Prince Rupert terminal. It remains congested and rail operations are impacted.
- The designated import traffic is being trucked off terminals for temporary storage and dwell times are imports are 4 days.
- ZIM container service is ideal for custom-made services for time-sensitive cargo requirements worldwide.
- Its excellent air freight substitute will provide good value for money and expedite cargo mounted directly on the chassis with immediate availability.
- There are space and equipment guarantees at the origin with no rolling.
- It moves from North and Central China, South Korea to the Caribbean, and South Atlantic bringing good results worldwide.
- It provides fast transit time from North Asia to the South Atlantic.
- There are many new calls in Wilmington, Jacksonville, and Pusan Westbound.
- It also provides connectivity to Halifax/Carribean via Kingston.
- There are various fast transit options to New York and unique calls in Baltimore while importing cargo to the Indian subcontinent and South East Asia.
- Similarly, there are fast transits available to Savannah and Charleston with direct calls in Xiamen and Kaohsiung.
- In terms of Charleston, there are new direct calls in Miami and Nansha as well apart from this port.
- It has notably the best transit time in the market from Yantian to Los Angeles and expedited rail connections via LAX to more inland locations.
US Midwest and US Gulf Updates
US Domestic Trucking Market Trends
- The FreightWaves SONAR OTVI was down 25% year over year.
- This OTVI measures the contract tender volumes across all modes.
- This decline is 3.3% month over month or 9.6% when measuring the accepted volumes after the significant decline in tender rejection rates.
- The Cass report has indicated annual volumes that were down 3.9% in December of last year.
- This was after falling 3.3% every month from November 2022.
- This trend shows us that shipment volumes are declining compared to last year but at a more gradual pace.
- The Morgan Stanley Dry Van Freight Index is another way to measure relative supply rates.
- The higher the index, the tighter the market conditions.
- Market pressures were consistent in December with average historical trends.
- We can expect softening through February as seasonal demands ease in the first two months of the year.
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 have been badly affected due to the LNY and are taking time to get back to normal. This has resulted in various congestion, delays, and increased waiting times for vessels.
We can hope to get back on track during the start of March with regular rates and space availability. 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.
We can expect a steady and consistent increase in the market owing to these trends which are bound to change in the upcoming days. 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
