Market Updates

Trends To Watch

• [Ocean – TPWB] Multiple carriers are pushing Trans-Pacific West Bound (TPWB) General Rate Increases (GRIs) from inland rail ramps for December.
• [Ocean – TAWB] Both Maersk and MSC are reshuffling 2M ocean freight services so that operations to the U.S. are run by the companies themselves. This is expected to be completed by the end of 2024. In other news, ocean freight demand is still so weak that some carriers are considering stopping certain loops altogether for the winter rather than doing blank sailings.
• [Ocean – FEWB] EUR trade: The market remains flat and capacity will be slightly impacted due to the vessel deployment change/suspension in South East Asia. We expect rates to drop slightly but liners are still planning for a General Rate increase in December ($500-700 increment per different carriers; more to follow). Plus, three more blank sailings were announced by the Operations Associate (OA) in the past week while The Alliance (THEA) announced FE5 suspension from week 46 until further notice but added Cai Mep Facilities and FE3 service. In other news, Compagnie Maritime d’Affrètement (CMA) announced taking out Cai Mep on FAL3 from week 48 plus the 2M Winter Program. Market capacity will still be down by at least 20% through November, but vessel utilization has improved. If there are any further changes, carriers will announce more void plans to support the rate increment. MED trade: Following North Europe, MED GRI started with a $700-800 increment and the same action will be applied for December. No further void plan has been announced for MED, but utilization is not as ideal as liners expected. Freight of All Kinds (FAK) rates may drop further in the second half of November, and we expect a cargo rush prior to the December GRI being implemented in the last week of November.
• [Air – Global] IATA.) Air Cargo Industry Update fresh of the press: Growth and Challenges in Numbers. 1. Cargo Demand Growth: Global air cargo demand continued to grow year-on-year, with cargo tonne-kilometers (CTKs) reaching 20.8 billion, a 1.9% increase compared to September 2022. 2. Capacity Expansion: Available cargo tonne-kilometers (ACTKs) increased significantly by 12.1% year-on-year, reaching 47.6 billion, driven by robust growth in international belly cargo capacity. 3. Trade Challenges: Global trade declined by 3.8% in August, impacting air cargo demand. In the U.S., inflation remained stable, while global jet fuel prices surged by 43.1% since May. 4. Regional Growth: Airlines in Asia Pacific, Latin America, Middle East, and North America all registered annual growth in their international CTKs, with Asia Pacific airlines leading with a 4.2% increase. 5. Trade Lanes: Asia-related trade lanes, including Africa-Asia (12.8%) and Europe-Asia (9.6%), saw strong growth in international CTKs, while Europe-Asia showed significant improvement from the previous month. 6. Regional Performance: Asia Pacific airlines had the strongest growth in international CTKs at 4.2%, followed by the Middle East (2.5%) and Latin America (1.5%). European airlines experienced a decline in international CTKs by 1.7%. 7. Inflation Impact: The surge in global jet fuel prices led to an increase in air cargo yields for the first time since November 2022.

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

The Week In News

Australian Ports Resume Some Operations After Major Cyberattack
Australia’s major port operator, DP World Australia, which manages almost 40% of the country’s goods, has resumed some operations three days after a cyberattack disrupted its systems and caused a cargo backlog. The reopening involves moving about 5,000 containers across four terminals in Sydney, Melbourne, Brisbane, and Fremantle, accounting for nearly 17% of the affected load. While the company expects temporary disruptions, it is working with authorities to investigate and address the cyber incident.

Shipping Industry Trims Its Sails for Sluggish Global Trade
Container shipping companies are expected to face tough times for the next two to three years, but it shouldn’t be as bad as the long struggle after the 2009 recession. Hapag-Lloyd’s CEO, Rolf Habben Jansen, points out a few reasons: there are fewer new ships on order, older ships will be scrapped, ships have to sail slower due to pollution rules, and companies have stronger finances now. Jansen believes this downturn might last a couple of years but expects a recovery within 24-36 months, which is shorter than the tough times the industry faced before.

Los Angeles, Long Beach Ports Offering $60M to Aid in Purchase of Zero-Emission Trucks
The Port of Los Angeles and Port of Long Beach are offering $60 million in vouchers to help companies get zero-emission Class 8 drayage trucks for the San Pedro Bay ports complex. This initiative is in preparation for California’s new truck emissions rules starting January 1, which mandate zero-emission trucks for cargo hauling in the San Pedro Bay ports.

Source from Flexport.com

Trends To Watch

• [Ocean] Panama Canal Updates: The Panama Canal has its driest October since 1950 with 41% less rainfall than usual. This is a direct impact of the decreased water levels at Lake Gatun, which not only feeds the canal but is also the main water source for 50% of Panama. Other updates include the Neo-Panamax draft restriction, which remains at 44 feet, vessel transits are now limited to 31 per day (down from a normal 36), and carriers continue to impose weight limits on shipments between 9 and 14 tonnes. There are still no noticeable delays to container transits of the canal, with the current wait time at 0.1 days for a 30-day average container ship. Despite these changes, Panama Canal routing remains the fastest transit from Asia to the U.S. East Coast and Gulf Coast. For those shipping above 14 tonnes, it’s recommended to use a via Suez service. Or, if time is critical, via U.S. or Canadian West Coast and rail. Flexport will continue to monitor the Panama Canal situation and pass on any information as it becomes available.
• [Air – Global] October’s global air cargo tonnages were nearly on par with last year, showing a mere -1% decrease year-over-year. This represents the smallest monthly drop in 2023, suggesting stabilization rather than recovery. In contrast, we saw larger declines earlier in the year, with -10% in Q1, -6% in Q2, and -3% in Q3. During week 43 specifically, tonnages dipped by -1% from the previous week with a modest +1% increase in rates. On a bi-weekly basis, there was a +3% rise in tonnages and rates coupled with a +1% increase in capacity. Regionally, significant tonnage increases were seen from Africa to Europe and within Asia-Pacific flows, while Europe to the Middle East and South Asia and North America to Europe saw decreases. Year-over-year, global chargeable weight dropped -2% with notable rises from the Middle East and South Asia, Central and South America, and Africa. Overall capacity has risen by +15% compared to last year with a significant +31% increase from Asia Pacific. Meanwhile, worldwide average rates are -28% lower than last year but still +36% higher than pre-Covid levels.

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

The Week In News

Biden Administration Investing $653M in Ports To Improve Supply Chains, Keep Costs Down
The Biden administration announced it is investing over $653 million in 41 ports across the U.S., including Long Beach, Milwaukee, and Newark, using funds from the bipartisan infrastructure law. This investment aims to enhance supply chain reliability, increase port capacity, accelerate goods movement, reduce shipping costs, and decrease pollution at ports.

The Holiday Spending Outlook Is Sluggish Across Thousands of Retailers: CNBC Supply Chain Survey
As the holiday shopping season begins, a CNBC Supply Chain Survey conducted in late October among logistics executives who manage freight manufacturing orders and transportation, finds retailers are cautious about ordering large quantities due to concerns about weak consumer spending, inflation, and economic uncertainty. Major retailers have managed their excess inventories, but smaller ones are reducing stock. As the freight market experiences a downturn in volumes, and as providers exit the market or implement reductions in force, soft pricing will remain as capacity outstrips demand.

Analysis: Supply Chains in 2024—Improved, but Still Vulnerable
In 2024, the supply chain is expected to be shaped by both positive and negative factors, building upon the improvements seen in 2023 following the challenges of the COVID-19 pandemic. Supply chains are operating more smoothly with reduced congestion, a more balanced supply and demand, and an increased focus on contingency planning, flexibility, and visibility. However, traditional risks such as war, weather, and recession continue to linger in the year ahead.

Trends To Watch

• [Ocean – TAWB] More and more carriers are reacting to the current market situation, calling rate levels ‘unsustainable;’ The expectation is for more blank sailings to hit the market in case demand doesn’t pick up soon. As per the latest Sea Intelligence article, the U.S. inventories are declining but mainly for wholesalers whilst retailers’ inventories are still high. Hopefully, this is a sign that the market will soon turn back with positive demand. In other news, USWC services are not being impacted by the current Panama Canal water situation but we will continue to monitor the status over the next few weeks weeks.
• [Ocean – FEWB] EUR trade: November GRI was initially announced at $1650-1800 but levels are expected to land closer to $1200. The overall EU trade market remains flat but capacity will be slightly impacted due to the vessel deployment change/suspension in SEA; expect rates to keep dropping. Additionally, three more blank sailings were announced by OA in the past week while THEA announced FE5 suspension from week 46 until further notice (but added Cai Mep calling on FE3 service); CMA announced taking out Cai Mep on FAL3 from week 48. Plus, the 2M winter program market capacity is expected to still be down by more than 20% through November; Expect more void plans from OA & 2M if vessel utilization remains flat; MED trade: Following NEUR, MED GRI started at the $2000 level and will most likely land at $1450-1500 for the first half of November; No further void plans were announced for MED trades but current utilization is good and MED rates are expected to drop back to the $1200-1300 level.
• [Air – Global] Global air cargo tonnages and rates have stabilized following China’s Golden Week, with week 42 indicating a +1% increase in both metrics, recovering from a -6% drop during the holiday. Despite this, no strong indications of a Q4 peak season are apparent. Regionally, there were tonnage decreases from Europe to various areas, contrasted by notable increases to and from the Asia Pacific. On a year-on-year basis, the global chargeable weight for weeks 41 and 42 was down by -1%, but overall capacity rose by +12% due to the resurgence of passenger air services. Presently, worldwide average rates are -28% from last year, though they’re up +33% from October 2019, sitting at an average of 2.38 US dollars per kilo.
• [Trucking – LATAM] Hurricane season is in full swing; Tropical Storm Pilar has led to heavy rainfall and flooding over portions of Central America, including El Salvador and Honduras. This has impacted trucking operations across the country but no port closures have been announced as of yet.
• [ISC – North America] Rate levels will remain consistent throughout November as demand and capacity begin to balance due to blank sailings. USEC capacity is constrained due to two blank sailings on the INDAMEX. USWC capacity is constrained due to higher-than-expected demand for TPEB services following Golden Week. General Rate Increase is expected to be implemented in December. Moreover, the ongoing government worker strike in Bangladesh due to road, rail, and sea blockage is expected to last until tomorrow, November 2.

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

Trends To Watch

• [Ocean – TPEB] Beginning in November, the Panama Canal Authority will further restrict the number of daily transits to 31 from the normal 36. This will bring with it the likelihood that container services will begin to see delays which they’ve been able to previously avoid. Expected delays would be in the 2-3 day range. Even with the delays, this timeline is still faster than shipping via Suez services for most Asia ports of loading. Heavy and time-critical cargo should consider routing via the U.S. or Canadian West Coast or utilizing rail or trucking services.
• [Ocean – LATAM] Brazil: The water levels in the Amazon River at its critical passage points have reached an unprecedented level, making it impossible for container vessels to access the Manaus port. Due to the unpredictable river conditions, we cannot provide a concrete forecast at this moment when Manaus will be accessible again. Ocean carriers are closely monitoring the river conditions and will communicate promptly when safe operations can resume. Moreover, the Port of Navegantes has been closed since October 4th due to adverse weather conditions while ZIM announced a GRI for all cargo from East Coast South America (including Brazil) effective November 1 at a quantum of $450/ctr. As of Oct 21, some carriers have reopened with some draft restrictions. Despite these challenges, Brazil continues in its peak season. Guatemala: The ports of Puerto Barrios and Santo Tomas de Castilla have reopened after weeks of protests caused roadblocks. Conversely, the Port of Puerto Quetzal remains closed.

The Week In News

Port of Long Beach Marks Its Busiest September on Record
The Port of Long Beach moved 829.4K TEUs in September, an increase of 11.8% from the same month last year, which marks the Port’s first monthly year-over-year cargo increase in 14 months. This suggests rising consumer confidence amid the holiday season and bodes well for cargo volume to rebound through the end of this year as the Port of Los Angeles also saw an increase in volume in September, with 748.4K TEUs moved––marking a 5.4% increase from the same month last year.

Strike Shuts Down Vital St Lawrence Seaway Freight Corridor
A strike has shut down the St. Lawrence Seaway freight corridor after 361 Unifor workers walked off the job Sunday, October 22, after failing to reach an agreement on wages. The St. Lawrence Seaway serves as a vital maritime trade corridor that links Montreal with the Great Lakes. The strike is expected to impact over 100 ships along the route and primarily disrupt movement toward Canadian provinces.

Forwarders Warn of Delays as Israel Air Cargo Disruption Continues
The Israel-Hamas conflict is impacting airfreight and express shipments to and from the region, leading to potential service disruptions. Multiple airlines have suspended direct flights to Israel, and most carriers are not accepting bookings for these affected routes. This situation has left goods that are already in transit stuck until further notice.

Trends To Watch

• [Ocean – FEWB] EUR trade: In the last week, the market remains flat and rates continue at the $800 level. However, the spot price is down to $700. As expected, carriers are planning another General Rate Increase (GRI) starting on November 1st in order to cover operational costs. The first round of price increases has been announced between $1700 and $1800. Due to the GRI increases, there are expected to be more void plans (canceling sailings) if cargo recovery doesn’t improve in the coming weeks; For instance, after Ocean Alliance announced 5 more void plans for November, 2M Alliance followed suit, and announced 7 sailings to be voided in November during their Winter Program. MED trade: Following North European markets, a GRI has been announced for WMED pushing back up to $2000 levels. However, they are still seeing oversupply. Ocean Alliance has announced 6 more MED void plans to support the GRI in November, and there is an expectation that 2M & THE Alliance may follow.
• [Ocean – TAEB] As capacity is starting to decrease, carriers are planning their first-rate restorations. We have seen announcements for rates to increase as soon as November 15th, 2023. Overall the on-time performance (OTP) is getting better and back to pre-pandemic levels around 70-75% of the time.
• [Ocean – TPEB] October capacity has decreased as expected, however it is not as big a drop as was seen during CNY earlier this year. November’s outlook, on the otherhand, is still very healthy, but that has the possibility of changing. Demand ex-China has started to come online this week, bookings over the next 1-2 weeks will determine capacity for November. PN3 was discontinued from THE Alliance services for the foreseeable future. Expect healthy blanks, but overall capacity to be comparable to Q2/Q3.
• [Air – Global] In September, global air cargo tonnage and rates increased compared to August. According to WorldACD Market Data, global air cargo had a rise of nearly +3% in tonnages and a +5% increase in rates. However, in week 39 (September 25 to October 1), there was a slight -1% drop in tonnages and a +2% increase in regional rates, the most notable increases were observed between the Americas, Europe, and Asia. Overall cargo capacity increased by 10% compared to the same period last year. Rates are now at $2.37 per kilo, which is 31% lower than last year but 38% higher than pre-COVID rates in September 2019.
• [US Exports] TAEB: Transatlantic Eastbound (TAEB) capacity is decreasing due to canceled sailings and capacity cuts to transatlantic services. TPWB: Capacity is available from US Coastal Base Ports to China Base Ports and South East Asia’s Port of Delivery, but subject to continued canceled sailings. Inland Rail Ramps are reporting lower Excepted Quantity (EQ) levels due to reduced imports into the Midwest. If you’re booking a US export from a Rail Ramp, it’s advisable to book at least two weeks before the Cargo Receipt Date (CRD) to ensure EQ availability.

Source from Flexport.com

Trends To Watch

• [Ocean – Europe] The European Commission (EC) has decided not to extend the Consortia Block Exemption Regulation (CBER) when it expires on April 25, 2024. In place since 2009, the CBER was designed to encourage competition in the shipping industry. What impact this will have on shipping to and from Europe remains unclear. (source: JOC)
• [Ocean – Canada] Talks continue between representatives of the Port of Montreal Longshoremen’s Union and the Maritime Employers Association (MEA) as their current collective agreement expires on December 31, 2023. Longshoremen at the Port of Montreal are looking for wage increases of at least 20% over the next four years and full job security in three years, while the port operator is looking to limit how many workers get that level of security and a contract that guarantees union peace through the end of the decade.
• [Ocean – TPEB] October capacity is down as expected with Golden Week, however it’s less of a drop than we saw during Lunar New Year (LNY). November’s outlook is good, but subject to change. Demand ex-China is just starting to come online this week, bookings over the next 1-2 weeks will determine capacity for November. Q4 outlook: Expect to see a good number of blank sailings, but with overall capacity comparable to Q2/Q3 numbers. The pre-LNY push will likely start in December. More new builds will continue coming online, carriers will most likely offset with more blanks and by moving smaller vessels to other markets.
• [Air Freight – Global] In September, global air cargo tonnages increased by nearly 3% and rates rose by 5% compared to August, according to WorldACD Market Data. Despite this boost, September tonnages were still down 2% year on year, marking the smallest monthly YoY decrease in 2023.
• [Ocean – FEWB] The market on the EUR trade remains flat. As expected, carriers are planning another round of GRI from Nov. 1, aiming to push up the market again to cover operation costs. Ocean Alliance announced 5 more void plans for November, in order to support the potential GRI carriers may plan more voids if cargo recovery is still not ideal from Mid-Oct. MED trade: Following NEUR, there’s also a GRI for WMED, but so far oversupply remains the case. Expect the market to drop further if the current round of voided sailings doesn’t lead to general strengthening.
• [U.S. Exports] TAEB and TPWB are both seeing blank sailings impacting equipment levels at inland IPI locations. Please book 2+ weeks prior to CRD to ensure an optimal booking.

N. America Vessel Dwell Times

The Week In News

ILWU Dockworkers Union’s Sway at West Coast Ports Is Tested in Bankruptcy
In advance of a judgment against it for what a federal jury found to be illegal work stoppages at the Port of Portland in 2019, the International Longshore and Warehouse Union (ILWU) has declared bankruptcy. The ILWU represents more than 22,000 workers at 29 ports along the U.S. West Coast, and as such wields a significant amount of leverage when it comes to port operations and controlling the flow of goods entering and leaving the U.S.

IATA: First Air Cargo Demand Growth in 19 Months
As part of its August air freight analysis, the International Air Transport Association (IATA) released numbers showing that global cargo tonne-kilometers (CTKs) were up 1.5% year-on-year. At the same time, they showed CTKs being 1.3% below their pre-pandemic level in 2019. According to an IATA representative, “Air cargo demand grew by 1.5% over the previous August. This is the first year-on-year growth in 19 months, so it is certainly welcome news. But it is off a low 2022 base and market signals are mixed.”

Source from Flexport.com

Trends To Watch

• [Weather – Asia] Typhoon Koinu is currently centered east of Southern Taiwan and is forecast to move west-northwest over the next several days. The typhoon is forecast to make landfall in southern Taiwan by the morning of Oct. 5 and continue to move westward across the Southern Taiwan Strait through Oct. 8 while weakening to a tropical storm. Air impacts: Starting on the night of Oct. 4 there will likely be flight delays and cancellations across Taiwan as the typhoon approaches, these delays will persist through Oct. 5 as the system moves westward over Southern Taiwan. Ocean impacts: Starting on Oct. 4 there will likely be vessel delays, especially in the south of Taiwan, with port closures likely at Kaohsiung. These delays/closures will persist through Oct. 5 before conditions return to normal as the system continues westward. As the storm moves westward across the Southern Taiwan Strait between Oct. 5-7 vessels transiting north/south along East China could be impacted.
• [Ocean – FEWB] EUR trade: With soft demand and Golden Week impact, rates continue to drop. Ocean Alliance has announced 5 more void plans for Nov, the other alliances may still announce their own void plans even full service take-out over the rest of year. MED trade: demand has become weak, matching North Europe and there have been blank sailing announcements from all 3 alliances. Rates keep dropping and the spot rate is open again for WMED.
• [Ocean – TAEB] New blank sailings across the trade and further reduction of contract rates is demonstrating the widely available capacity from U.S. coastal ports and Midwest rail ramps.
• [Ocean – LATAM] Due to the ongoing drought situation in the Amazon region, ocean carriers have announced a Low Water Surcharge for all cargo going in and out of the Port of Manus in Brazil. Other carriers have pulled their service completely. Rio Negro’s water level fell by an average of 30 centimeters (11.8 inches) a day since mid-September and stood at 16.4 meters (54 feet) last week, approximately six meters below its level the same time last year.
• [Air – Global] While general air cargo tonnage has seen a decline year-to-date, special air cargo product verticals have experienced growth according to WorldACD Market Data analysis. Despite a 7% drop in total worldwide chargeable weight from January to August 2023 compared to the same period in 2022, specific product categories such as vulnerable/high tech, live animals, perishables, and valuables have shown notable growth, with special cargo products overall growing by 3%.

N. America Vessel Dwell Times

The Week In News

[VIDEO] Watch: How COVID Changed the Shipping Industry — Forever

Innovations developed during the height of the pandemic are helping ecommerce logistics stay attractive to consumers who became accustomed to package tracking, easy returns, and more. This according to Jakki Krage Strako, Chief Commerce and Business Solutions Officer with the U.S. Postal Service. Consumers have taken their expectations back to the office and remain loyal to companies who provide the best support and service.

FMCSA Will Award $44M To Improve CDL Processes

The money is intended to help streamline the process of training and onboarding badly needed new drivers by increasing staffing at Commercial Driver License (CDL) training centers, improving cross-state reporting, and other moves to help bolster the supply chain. According to Transportation Secretary Pete Buttigieg, “With these grants, we are helping states bring more well-trained drivers into this essential field, strengthening our supply chains for years to come.”

Source from Flexport.com