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May 17, 2023
11 min read time

Ocean Rates and Trends for US Market | May 17, 2023

Weekly ocean and air freight rates and trends, along with trucking and customs, warehousing, fulfillment and e-commerce news for the U.S, China and Turkey markets.
Beeontrade Team
  • Ocean,
  • Air,
  • Intermodal,
  • Trucking,
  • Warehousing,
  • Fulfillment

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    From the Editor’s Desk

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    Key takeaways for the US

    • Maersk and MSC, 2M partners, will deploy nine additional vessels on their Asia-Europe services.
    • The capacity increase comes at a time when the rate market is showing signs of stabilization.
    • New customs data reveals China's exports increased by 8.5% in April despite global demand slowing down.
    • Rates on the Transpacific route continue to decline as the erosion of mid-April General Rate Increases (GRIs) persists.
    • ONE (Ocean Network Express) is promoting EC5 by upgrading vessels and increasing capacity by 40%.

    Read on for more in-depth updates.

     

    Ocean Freight Market Updates 

    Asia → North America

    US/CA

    Transpacific Trends and Market Updates

    • Maersk and MSC, 2M partners, will deploy nine additional vessels on their Asia-Europe services.
    • The capacity increase comes at a time when the rate market is showing signs of stabilization.
    • Some industry publications, like Loadstar, have expressed concerns that the introduction of new capacity could lead to a freight war and further rate reductions.
    • Carriers in the Transpacific trade have already announced General Rate Increases (GRI), but rate erosion of 8% on FEU rates has been observed since the beginning of the month, according to Xeneta data.
    • China retained its title as the world's largest logistics market for the seventh year in a row, registering $2 trillion in revenue in 2022, which marks a 4.7% growth compared to 2021.
    • Rates from TSN to Europe and the US have decreased this week.
    • From CKG to Europe, rates have remained stable, while rates to the US have slightly increased since last week.
    • Rates have remained stable this week from CAN to Europe and the USA.
    • Space availability has improved since last week.
    • All shipments will need to be checked with the carrier for rates on a case-by-case basis from SZX to Europe and the US.
    • From XMN to Europe and the US, rates have remained stable, and all shipments will need to be checked with the carrier for rates on a case-by-case basis.
    • Rates on the Transpacific route continue to decline as the erosion of mid-April General Rate Increases (GRIs) persists.
    • Last week, Asia-USWC rates dropped by another 5%, reaching a range of $1,250 to $1,300 per 40ft container.
    • Asia-USEC rates remained virtually unchanged at $2,300 per 40ft container.
    • Asia-GULF rates have remained stable at $2,500 for several weeks.
    • Carriers have the flexibility to offer discounts on specific sailings to improve vessel utilization and attract volume.
    • ONE (Ocean Network Express) is promoting EC5 by upgrading vessels and increasing capacity by 40%.
    • Despite the announcements of General Rate Increases by CMA and MSC, set to take effect from June 1st with an increase of $500 per 40ft container, the market does not expect these increases to be successful due to the lack of indication of volume growth shortly.
    • Currently, there is ample space available, despite weight limitations imposed on USEC services through the Panama Canal.
    • Currently, the floating market conditions offer advantageous opportunities with low rates, open space, and favorable conditions across the board.
    • Consider taking advantage of these conditions by leveraging premium services, which have demonstrated excellent transit time performance.

    • THEA Upgrade South East Asia-USEC 'EC5' Loop

      • The upgraded 'EC5' loop will operate between South East Asia and the USEC (the United States East Coast).

      • The port rotation for the 'EC5' loop includes Laem Chabang, Cai Mep, Singapore, Colombo, Halifax, New York, Savannah, Jacksonville, Norfolk, and Halifax.

      • Carriers Hapag-Lloyd, ONE, HMM, and Yang Ming will increase weekly capacity by approximately 40% by replacing their 8,100 - 9,040 TEU ships (previously deployed by ONE and HMM) with 14,000 TEU vessels operated by ONE.

      • As the carriers receive new 24,000 TEU Megamax vessels for the Asia-Europe trade, they are redirecting 14,000 - 15,000 TEU capacity to the Transpacific trade. This capacity upgrade enables carriers to focus on slow steaming and maximizing utilization.

      • The upgrade began in early April and will be completed in the first week of June, with a specific emphasis on South East Asian exports.

      MSC Launches New 'Sentosa' Direct SEA/California Service

      • MSC has introduced a new service called 'Sentosa' that focuses on South East Asia countries, specifically Thailand and Vietnam.

      • The new rotation for the 'Sentosa' service includes Laem Chabang, Cai Mep, Haiphong, Long Beach/Los Angeles (with alternating calls on a fortnightly basis), and Oakland.

      • The inaugural sailing of the Sentosa service was on May 13th with a revised capacity of seven vessels ranging from 4,950 to 8,900 TEU.

      Transpacific Space Situation - China Market Share

      • China's share of U.S. imports experienced a continuous decline from September 2022 but has reversed the downward trend since April.

      • U.S. imports from China increased by 156,563 TEUs in April compared to March, representing a 27% month-on-month growth, according to Descartes data.

      • China's cargo volume bounced back to 36.8% in April, up from 31.6% in March.

      • In February 2022, China's share was as high as 41.5%.

      • Booking volumes have increased at most origin ports in China, while orders remain slow in Xiamen, Fuzhou, and Dalian.

     

    Conclusions

    Rates - The rates will remain soft on most origin-destination combinations.

    Space - Space open, no issues with equipment. 

    Recommendations - We recommend blank sailings to continue. Book at least two weeks before the date your vessel gets ready to depart.

     

    Turkey → North America

    • According to Sea-Intelligence, the rate of volume contraction for laden imports in North American West Coast (NAWC) ports in March showed a decrease compared to 2019.
    • Alan Murphy, the CEO of Sea-Intelligence, suggests that this could be a temporary easing up or potentially a sign of market conditions normalizing.

     

    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 issues with equipment.

     

    North America → Turkey

    • New data from the United Nations Conference on Trade and Development (UNCTAD) reveals the significant pressure on US port capacity during the pandemic.
    • Globally, ports experienced a 15% decrease in capacity due to the surge in demand during the pandemic.
    • In the US, this pressure on capacity rose even higher, reaching up to 35% due to increasing demand, inadequate port infrastructure, and congestion.

     

    Conclusions

    Rates - Stable rates over the last week.

    Space for capacity - No major capacity or space issue.

    Space for equipment - Equipment issues have started owing to low levels of import.

     

    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:

    • 1 day waiting time is expected for a berth at Global Container Terminals Bayonne and APM Terminals.
    • Up to 2 days waiting time at Maher Terminals LLC.
    • No empty shut-out situations at any of the terminals this week.
    • Average gate turn times: 46 minutes for single transactions, and 68 minutes for double transactions.
    • No Saturday gates are planned this week at other terminals.

     

    Norfolk:

    • Most vessels are expected to berth on arrival or within half a day, occasionally experiencing 1-1.5 day delays for berthing.
    • Average gate turn times: 28 minutes for single transactions, and 38 minutes for double transactions.
    • Two cranes down at Norfolk Int'l Terminal, no negative impact is expected this week.

     

    Charleston Terminal:

    • 2 days waiting time for vessel berthing at Wando Welch Terminal.
    • No waiting time expected at North Charleston Terminal.
    • Average truck turn times: 22 minutes at Wando Welch Terminal, and 20 minutes at North Charleston Terminal.
    • Chassis pools are available at all SCPA locations.
    • Sunday gates by appointment only.

     

    Savannah:

    • Waiting time for vessel berth at the terminal is up to 1-2 days, depending on the size of the vessel.
    • Average gate turn times are 26 / 35 minutes for single and double transactions respectively.

     

    Houston:

    • Barbours Cut Terminal’s waiting time for vessel berthing is up to 1 day.
    • Saturday gates at Bayport and Barbours Cut Container Terminals discontinued as of May 1, 2023.
    • The average gate turn time is 39 minutes.

     

    Oakland:

    • Average wait time of up to 2 days at Oakland Int’l Container Terminal (OICT) and TraPac.
    • Average import deliveries can take up to 4.9 / 3 days at TraPac and OICT respectively.
    • As yard space becomes available, boxes from TraPac will move to accessible areas for delivering.
    • Average gate turn times are 57 / 52 minutes for OICT and TraPac respectively.

     

    Seattle-Tacoma:

    • There are no vessel berthing delays in Tacoma.
    • However, in case of delays at departure ports overseas, delays of up to 2 days are expected.
    • Import deliveries are 1.5 days at HUSKY – due to EB/WB railcar imbalance, 0-3 days at Washington United Terminal, and 0-3 days at T18.
    • Availability of rail cars in Union Pacific Rail and BNSF Rail continues to fluctuate weekly.
    • Average gate turn times are 32 / 35 / 70 minutes for T18, Washington United Terminal, and HUSKY respectively.
    • T18 Terminal will be closed on May 12 and May 19, 2023.
    • Washington United Terminal will be closed on May 12 and May 19, 2023.
    • Husky will be closed on May 12 and May 19, 2023.

     

    Los Angeles/Long Beach:

    • All terminal gates are running as published and in line with the Pier Pass program.
    • Port of Los Angeles dwell times for local import cargo is 3.5 days, on-dock rail dwell is 5 days, and import units on the street are averaging at 5.4 / 6.3 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 21-62 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.

     

    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.

    It is worth noting that these trends are expected to persist shortly, albeit with potential fluctuations. However, it is essential not to delay shipments or wait for further updates before proceeding with your plans.

    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.