From the Editor’s Desk
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Key takeaways for the US
- TAWB rates have been decreasing in Q1 due to the easing of port congestion.
- Schedule reliability for LANB has almost doubled thanks to less port congestion at both ends of the trade.
- Air capacity out of Asia has been reduced due to declining rates, which has resulted in more cargo being shifted back to the ocean.
- Airlines have started to retire freighters, and some charters have been canceled, resulting in a capacity that is almost equal to pre-COVID levels.
- Most US ports and rail ramps are functioning smoothly with few to no delays in trucking news.
Read on for more in-depth updates.
Ocean Freight Market Update
Asia → North America
U.S / CA
Transpacific Trends and Market Updates
- MSC has taken delivery of the world's largest ultra-large container ship.
- The ship has a carrying capacity of 24,346 twenty-foot equivalent units (TEUs).
- The vessel is owned by Bank of Communications Financial Leasing and is chartered to MSC.
- The MSC Irinia embarked on its maiden voyage from Zhoushan.
- Chinese officials used the occasion to showcase the country's growing expertise in shipbuilding, challenging established builders in Korea and Japan.
- Container spot rates may have leveled off, but rate erosion on the Transpacific and Asia-Europe trade lanes is starting to ease.
- The drop in rates bottoming out may lead shippers to consider the spot market more than usual.
- According to a recent survey, one-third of Transpacific shippers have no plans to sign fixed contracts this year.
- BCOs will need to decide on the percentage of their volumes they are willing to commit to carriers.
- Ocean carriers have restructured their networks, such as suspending the AE1/Shogun Asia-North Europe loop by the 2M Alliance after blanking the service for consecutive weeks.
- Industry experts suggest signing contracts with carriers because containers with low spot rates may be the last to be loaded when capacity becomes tight again.
- Given the uncertainty around rates during this volatile period, bespoke rate consultations are being offered to help diversify and adapt rate strategies.
- The 2M Alliance has suspended the AE1/Shogun Asia-North Europe loop after weeks of blanking the service.
- The AE1/Shogun loop used twelve vessels with a capacity ranging from 13,000 to 20,500 TEUs and called at ports including Ningbo, Xiamen, Yantian, Tanjung Pelepas, Rotterdam, Bremerhaven, Tanger Med, Salalah, Hong Kong, and Ningbo.
- The suspension of the service instead of blanking each voyage may be welcomed by shippers who found it challenging to adapt their strategies to consistent blank sailings.
- The global port situation is stable on both the East and West Coasts with a gradual decrease in vessel dwell week over week due to softening demand.
- WGQ port in Shanghai was closed for 19 hours on 11-12 Mar due to dense fog, causing minor berth congestion among most terminals with waiting/delay of 0.5-1 day.
- YS port was closed for 4 hours on 11 Mar due to dense fog, causing minor berth congestion in YS1 with a waiting/delay of 0.5 days.
- All terminals in Ningbo are currently experiencing minor berth congestion with waiting/delay of approximately 1 day due to port closure for a total of 26 hours from 10-12 March.
- On 12 Mar, Qingdao port was closed for 14 hours due to dense fog, causing minor berth congestion across all terminals with a waiting/delay of 0.5 days.
- In Busan, the port was closed for 17 hours on 10-11 Mar due to dense fog. BNCT yard utilization has returned to normal and healthy levels, with a minor waiting/delay of 0.5 days due to fewer vessel calls and lower cargo demand.
- As of 15 Mar, the laden yard density is approximately 68%, and the CMA T/S inventory is around 9700 TEUs. The overall situation remains favorable.
Conclusions
Rates: The rates will remain 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 before the date your vessel gets ready to depart.
Turkey → North America
- Imports at the ports of Los Angeles and Long Beach are still declining.
- The Port of Los Angeles has fallen to third place for throughput at a U.S. port.
- The Port of New York and New Jersey is now the top-ranked U.S. port for throughput.
- The Port of Long Beach, located next to the Port of Los Angeles, has surpassed its neighbor in throughput.
- In February, total throughput at the Port of Los Angeles decreased by 43% compared to the same period in the previous year, reaching 487,846.
Conclusions
Rates: The rates will remain soft on most origin-destination combinations.
Space for capacity: No capacity issues or issues with space.
Space for equipment: No capacity issues or issues with space.
North America → Turkey
- US container imports in February saw a significant decline in volumes compared to the previous year.
- Import throughput fell by 28% to 1,454,438 TEUs, according to McCown, marking the lowest level since March 2020.
- US West Coast ports were hit the hardest, experiencing a 37% drop in import throughput.
- US East and Gulf Coast ports also saw a decline of 18.7% to 809,375 TEUs.
- The Port of Houston, however, recorded an increase of 12.7% year-on-year to 131,946 TEUs.
Conclusions
Rates: Stable rates over the last week.
Space for capacity: Some intermodal terminals are heavily congested. However, there is no major capacity or space issue.
Space for equipment: Equipment issues have started owing to low levels of import.
Terminal Updates
- Due to severe weather conditions, vessels heading to North America via the North Atlantic Sea are expected to have a schedule change.
- CN will limit the loading of all shipments moving in 40' containers to a maximum of 52,000 lbs.
- Gross Cargo Weight (exclusive of container tare weight) at Joliet, IL; Indianapolis, IN; and Chippewa Falls, WI destined for the Port of Vancouver and Port of Prince Rupert from April 10th, 2023.
- New York: Expect a 1-day waiting time for a berth at Global Container Terminals Bayonne, Maher Terminals LLC, and APM Terminals. No empty shut-out situations this week.
- Average gate turn times are 47/72 minutes for single and double transactions, respectively.
- There are no Saturday gates planned this week, and all terminal gates are closed on March 17, 2023, due to snow/rain and high winds.
- Norfolk: Most vessels are expected to berth on arrival, or within half a day, but occasionally may experience a 1-1.5 day(s) delay for berthing.
- Average gate turn times are 27/35 minutes for single and double transactions, respectively. Two cranes down at Norfolk Int’l Terminal, but no operational impact is expected.
- Charleston Terminal: Expect up to 1-day waiting time for vessel berthing. Average truck turn times are 25/19 minutes at Wando Welch Terminal and North Charleston Terminal, respectively. Sunday gates are discontinued.
- Savannah: Waiting time for vessel berth at the terminal is up to 2 days, depending on the size of the vessel.
- Houston: Expect berth congestion at Barbours Cut Terminal due to high yard utilization, with up to 1-day waiting time for vessel berthing.
- The final Saturday gate offered is April 29, 2023, as additional hours are not being well utilized. Average gate turn times are 36 minutes.
- Oakland: Expect vessel berthing delays due to the influx of imports. Average wait time of up to 6/13 days at Oakland Int’l Container Terminal (OICT) and TraPac, respectively.
- Seattle-Tacoma: No vessel berthing delays in Tacoma, but expect delays of 0-2 days due to delays at departure ports overseas.
- T18 and Washington United Terminal will be closed on March 17 and March 24, 2023. Husky will be closed on March 31, 2023.
- Los Angeles/Long Beach: All terminal gates are running as published and in line with the Pier Pass program.
- Port of Long Beach dwell times for local imports are stable, and the average terminal gate turn time is between 24-56 minutes, depending on the terminal.
- Chassis Pools: All pools are operating as normal at all tracked locations.
- Intermodal Operations: Truck power can be secured within 1-3 days for the majority of locations, including marine terminals, rail ramps, and depots.
US Domestic Trucking Market Trends
- The FreightWaves SONAR Outbound Tender Volume Index (OTVI) indicates that contract tender volumes across all modes were down 25% YoY.
- There was a 3.3% MoM decrease in tender volumes, or a 9.6% drop when measuring accepted volumes after a significant decline in tender rejection rates.
- The Cass report shows that December's YoY volumes fell by 3.9%, after a 3.3% MoM decline from November, suggesting a gradual decline in shipment volumes compared to last year.
- The Morgan Stanley Dry Van Freight Index measures relative to supply, with higher index values indicating tighter market conditions.
- In December, the index showed consistent market pressures in line with historical trends.
- Looking ahead, there is an expectation of softening at least through February, as seasonal demand eases in the first two months of the year.
Final Thoughts
Based on the latest updates, it can be confidently stated that the market is performing well and has adequate equipment and capacity available. To make informed decisions, it is advisable to stay informed about market trends and plans.
Unfavorable weather conditions have negatively impacted some areas, resulting in congestion and longer waiting times for vessels. However, other ports have successfully cleared their backlog and are thriving.
To avoid complications and ensure smooth import/export operations, it is recommended to consult experts and thoroughly research ports with available space and equipment.
These trends are expected to continue, with potential fluctuations in the coming days. Thank you for reading our newsletter. Remember to subscribe to receive weekly market updates.
Beeontrade Team
