Freight & Logistics Update 10 January 2024

Good Day Clients & Partners

As this is our first update for the year, we would like to wish you a Happy 2024! The first Freight & Logistics Update for the year as below.

The Inter-Sped team are ready to jump for you – so don’t hesitate to contact us for any of your freight and logistics needs.

SOUTH AFRICA

Port Congestion Surcharges: ‘PCS’ has now been rolled out by all carriers, and will remain in place until the congestion in Durban has been cleared. The amount averaging at US$200 TEU will be imposed across all trade routes and across all South African ports.

DURBAN

Port berthing delays continue to be experienced due to high levels of congestion.
The recovery plan for port congestion continues to progress at a steady pace. On the volume tracker, there has been a level of increased activity since the start of the year.
31 vessels – of which 13 container vessels (estimated 17,000 TEUS) remain at anchor, with a waiting time of 11 – 15 days before berthing, and a further 3 – 5 days for vessel discharging.
The delays have a knock-on effect, with the collection of containers as trucks are waiting 2 – 3 days for booking slots. There has also been an impact of truckers evacuating containers off terminal and taking them to depots over the festive season. This has created a backlog and space restriction, having an impact on the empty return of equipment.

Pier update:

Pier 1 : Upto 14 days
Pier 2 : 19-22 days
Durban Point : 3 days

CAPE TOWN

Port Berthing delays have increased in compared to previous weeks.
High winds and swells are impacting the Cape Town operations and with 7 vessels at anchor.
Delays with container collection due to challenges with equipment down times.
The 7 new RTG carriers that arrived in December, have not yet been put into commission so the positive impacts are yet to be felt.

Pier update:

CTCT : 3-5 days
MPT : 5-10 days

PORT ELIZABETH

The port has reported windy weather during the week which has impacted port operations.
Terminal delays are being experienced with the container booking systems, which can impact the collection of inbound containers from the terminal. An additional 24 hours delay should be expected.

Pier update:

PECT : 0-2 days
NCT : Upto 7 days

AFRICA & INDIAN OCEAN ISLANDS

Red Sea Risk Surcharge: Due to the ongoing conflict in the Red Sea and the diverting of ocean carrier via the Cape, surcharge costs have been implemented. These include a Red Sea risk surcharge and container imbalance surcharge (as equipment is not reaching its destinations on time, due to the extended routes). We have also received notice of freight rate increases for January and anticipate this to continue for Q1.

ANGOLA

Berthing delays of 4 days experienced at Luanda port. Congestion experienced at the port.

GHANA

Berthing delays of 4 days experienced at Tema port.

IVORY COAST

Berthing delays of 2 days experienced at Abidjan port.

KENYA

Berthing delays of 4 days experienced at Mombasa port.

MAURITIUS

Berthing delays of 4 days experienced at Port Louis.

MOZAMBIQUE

Berthing delays of 8 days experienced at Maputo port.

NAMIBIA

No berthing delays experienced at Walvis Bay port.

NIGERIA

No berthing delays experienced at Apapa port.

TANZANIA

Berthing delays of 12 days experienced at Dar es Salaam port.

NORTH AMERICA

CANADA

Montreal

Berthing delays of 5 days experienced at this port. Bad weather conti8nues on the North Atlantic ocean and this is having mild impact on vessel schedules through Montreal.

Toronto

Berthing delays of 2 days experienced at this port.

Vancouver

Berthing delays of 3 days experienced at this port.

USA

Terminals Updates:

New York/New Jersey – Vessel waiting time is up to 3 days.
Norfolk – Vessel waiting time is up to 4 days. One crane down for routine maintenance.
Savannah – Vessel waiting time is up to 3 days. Berth 2 is back on line helping to reduce waiting times.
Charleston – Vessel waiting time is up to 2 days.
Miami/Port Everglades – Vessel waiting time is up to 2 days.
Houston – Vessel waiting time is up to 8 days. Due to vessel bunching the yard is facing congestion impacting the discharge productivity and extending port stays
Los Angeles/ Long Beach – Vessel waiting time is up to 1 day.
Seattle – Vessel waiting time is up to 1 day.
Oakland – Vessel waiting time is up to 6 days. Dredging operations at OICT berths causing some berthing delays.

Rail Updates:

BNSF – Rail ramp is currently experiencing congestion in Chicago, Columbus, and Los Angeles. There are delays in picking-up and delivering containers at these locations.
UP/LAX/LGB – Rail ramp is currently experiencing congestion in Los Angeles. There are delays in picking-up and delivering containers at this location.

Equipment Availability:

Due to persistent congestion nationwide, chassis shortages continue to be observed resulting in potential delays for pick-up and delivery.

LATIN AMERICA

BRAZIL

Berthing delay of 1 day experienced at Santos port.

NORTH WEST CONTINENT, UNITED KINGDOM, MEDITERRANEAN

European ETS fee: the introduction of the European ETS fee came into effect on the 1st January 2024, and is applicable for all cargo entering or leaving all European Union countries. This mandatory sustainability fee is imposed on all ocean carriers under the EU regulations and it will differ between carriers at an average of US$35 per TEU.

BELGIUM

Berthing delays of 5 days experienced at Antwerp port.

FRANCE

Berthing delays of 3 days experienced at Le Havre port.

GERMANY

Berthing delay of 4 days experienced at Hamburg and Bremerhaven ports. CTA Terminal ongoing shore power construction with no impact to water side operations. CTB Terminal Ongoing shore power construction with challenges to operations for all piers at CTB.

ITALY

Berthing delays of 3 days experienced at Genova port and 1 day at La Spezia port.

NETHERLANDS

Berthing delays of 3 days experienced at Rotterdam port. Operational challenges beginning of the week due to strong winds but resulting with no backlog.

SPAIN

Berthing delays of 3 days experienced at Barcelona port.

SWEDEN

Berthing delay of 1 day experienced at Gothenburg port.

TURKEY

Berthing delay of 1 day experienced at Istanbul port.

UNITED KINGDOM

Berthing delays of 3 days experienced at London Gateway port. Strong winds led to closure of Pilot stations earlier in the week resulting in several berthing delays. Terminal is working through the backlog with an extremely busy berth line-up, further delays can be expected.

INDIAN SUB-CONTINENT & MIDDLE EAST

INDIA

Berthing delay of 1 day experienced at Nhava Sheva and Chennai ports, while Mundra is experiencing delays of 2 days. Strike action experienced causing disruption to the transportation network affecting collections and deliveries on Tuesday, 2nd January 2024. The strike also concluded on the same day and all trucking services are fully operational.

SRI LANKA

Berthing delays of 2 day experienced at Colombo port.

UNITED ARAB EMIRATES

Berthing delay of 1 day experienced at Jebel Ali port.

ASIA PACIFIC (Including Oceania)

Hazardous commodity acceptance out of China remains a challenge as approval for loading remains subject to carriers’ stringent acceptance protocols. Capacity constraints are currently being experienced with carriers out of Asia.

HONG KONG

Berthing delay of 1 day experienced at this port.

KOREA

Berthing delay of 2 days experienced at Busan port.

MALAYSIA

Berthing delay of 1 day experienced at Port Kelang.

NANSHA

Berthing delays of 4 days experienced at this port.

QINGDAO

Berthing delays of 2 days experienced at this port.

SHANGHAI / NINGBO

Berthing delays of 3 days experienced at Shanghai port and 2 days at Ningbo port. Ningbo experienced intermittent port closure from strong winds, adding pressure to the bunching of vessels.

SHEKOU / YANTIAN

Berthing delays of 2 days experienced at Shekou port and 7 days at Yantian port.

XIAMEN

Berthing delay of 1 day experienced at this port.

XINGANG

Berthing delays of 4 days experienced at this port.

SINGAPORE

Berthing delay of 1 day being experienced at this port. No delays experienced for transshipment cargo. Delays are expected for FCL containers transshipping in Singapore. Expected delays are between 1-2 weeks.

TAIWAN

Berthing delay of 1 day experienced at Kaohsiung port.

THAILAND

Berthing delay of 1 day experienced at Bangkok port.

VIETNAM

Berthing delays of 1 day experienced at Ho Chi Minh port and 2 days at Hai Phong port.

NEWS ARTICLES

Shipping starts shelling out for EU Allowances

Date: 2nd January 2024

The largest regional green regulations in the history of shipping came into effect on the 1st of January, with the industry included in the European Union’s emissions trading system ( EUETS), a market-based measure that sets a cap on allowed emissions.

Vessels visiting EU ports will be required to offset their applicable CO2 voyage emissions through the purchase of an equivalent number of EU Allowances (EUAs).

Clarksons Research has put together a graph estimating EU ETS costs for certain ship types on the basis of this year’s average EUA price of $90 per tonne of CO2 and 2022 trading patterns. The data shows that for a VLCC heading from Ras Tanura to Rotterdam EU ETS costs will be around $200,000 per voyage next year equivalent to 4% of today’s freight cost, increasing to $0.5m and 10% in 2026 when the regulation is fully phased in at 100%. [1]

Red Sea attacks continue and shipping costs soar

Date: 3rd January 2023

Supply chains are in chaos, as it appears even the power of the US Navy is proving insufficient to deter attacks on commercial shipping in the Red Sea, with costs set to soar ever higher.

Having just days earlier said it would resume services through the waterway, Maersk announced it would re-suspend services after Yemen-based, Iranian-backed Houthi militants attacked its 15,000 teu box ship Hangzhou on the 30th of December. In an update to customers, the carrier said: “We have made the decision to pause all transits through the Red Sea and the Gulf of Aden until further notice.”

A coalition of US and, it is claimed, units from 20 other countries aimed to protect commercial shipping using the Red Sea through Operation Prosperity Guardian, launched on 19 December. And while the US has shown relative speed in addressing threats, the superpower has seemingly failed to get its coalition partners onboard, with almost half of the parties involved refusing to publicly declare their participation.

For forwarders and shippers, this has led to a surge in costs amid a raft of new surcharges by carriers and a delay in deliveries.

Of the major carriers, CMA CGM is the only one willing to allow its ships to transit the Red Sea, and a source claimed this only involved an “occasional vessel”, and “only when there is a French warship on hand to offer security”, meaning more costs.

Rates are increasing, with a large number of acronyms and mechanisms being employed, from established GRIs and PSSs to new ones. These include contingency surcharges, contingency adjustment charges and emergency contingency surcharges. [2]

Supply chain confusion and sky-high rates ring in the new year for shippers

Date: 3 rd January 2023

On day 19 of the Red Sea crisis, confidence in the ability of the US-led Operation Prosperity Guardian naval protection force to guarantee safe passage to and from the Suez Canal has suffered a setback, following further missile attacks on vessels by Yemen-based Houthi rebels.

Operators of vessels within an alliance will take the final decision to transit the Red Sea, or re-route their ships around the Cape of Good Hope or, in some cases, pause the voyage pending further risk assessment. It follows that alliance vessel-sharing agreement partners will have little or no control over the routing of a voyage, notwithstanding that the individual co-loading carrier may have decided to send all of its ships around the Cape or via Suez.

Indeed, Lars Jensen, CEO of Vespucci Maritime, is advising shippers: “If you book with a specific carrier and have a preference for a specific routing, you need to look into who is operating the vessel on that specific sailing.”

Meanwhile, there is much confusion over the revised ETAs in Europe of vessels already enroute from Asia, with some shippers complaining of “discrepancies” in rotations and arrival times between alliance members loading on the same ship.In fact, a UK port agency contact told The Loadstar that since Christmas, he’d seen five different ETAs for one particular ship. “And I don’t think they are finished yet,” he added, “when it eventually gets to North Europe there are bound to be rotation changes and import discharges consolidated in order to get the ship back to Asia as fast as possible.”

This could cause more headaches for importers who, in turn, are struggling to keep their customers, retailers or site project managers, abreast of the latest changes to the arrival of their goods.[3]

MSC Solidify’s Position as the World’s Largest Shipping Line

Date: 3rd January 2023

MSC Mediterranean Shipping Company solidified its position as the world’s largest shipping line in 2023 with the addition of more than 1 million TEUs (twenty-foot equivalent containers), according to statistics released by Alphaliner.

MSC overtook Maersk to become the world’s largest shipping line in early 2022. Since then, the Geneva-based company’s industry-leading fleet expansion has played a key role in widening the gap over second-place Maersk, which actually experienced a fleet reduction of 112,500 TEUs in 2023, representing reduction of 2.7%.

MSC on the other hand added just over 1 million TEUs of capacity over the last twelve months thanks to the delivery of fourteen 24,000-TEU “megamax” ships, as well as twenty-six neo-panamax ships ranging in capacity from 15,250-16,550 TEU and the addition of secondhand ships. By the end of 2023, MSC’s fleet consisted of 783 cellular ships representing 5.6 million TEUs, representing an impressive growth of 22% which will only continue with 122 ships still on order, representing 1.47 million TEUs, according to Alphaliner.

Notably, MSC and Maersk in January 2023 announced plans to end their vessel sharing alliance, known as 2M, starting from January 2025. While MSC is rapidly expanding its fleet size, Maersk is embarked on an integrator strategy and since 2021 has has had a policy of only ordering new vessels that can operate on green fuels.[4]

Shippers facing huge wave of rocketing ocean rates and new surcharges

Date: 5th January 2023

The contagion of skyrocketing container freight rates has now spread from the Asia-Europe tradelane, to the transpacific, and is also about to hit transatlantic shippers.

Spot rates from North Europe to the US east coast have been sub-economic for ocean carriers for some time, with for instance Xeneta’s XSI reading this week languishing at an average of just $1,464 per 40ft, compared with an average of $6,412 in the same week of last year.

And this is down from the robust $2,000-plus rates seen on this unspectacular, but less volatile, tradelane prior to the pandemic.

Under the US Shipping Act, carriers have a 30-day notice requirement before they can impose surcharges or GRIs (general rate increases), but the Federal Maritime Commission has waived this for shipments from Asia to the US being rerouted around the Cape of Good Hope due to the the Red Sea crisis. But for transatlantic shipments, the lines must comply with the act, albeit that when the charges come they will be huge.

It follows that today’s announcement from Maersk of a PSS (peak season surcharge) of $750 per 40ft from North Europe to the US and Canada will not be effective until 5 February. Maersk told customers the PSS was necessary “due to the dynamic market situation causing disruptions on global networks”.

Rival CMA CGM has already announced a “rate restoration initiative” for the trade of $1,000 per 40ft from European ports to the US, Canada and Mexico from 21 January.

Meanwhile, Asia-Europe carriers have announced numerous surcharges for cargo already in transit, having declared force majeure on bill of lading contracts, including transit disruption and emergency contingency surcharges, which consignees will be required to pay prior to the release of containers at the destination port.

Additionally, the lines have announced new FAK (freight all kinds) rates from Asia to Europe, with, for instance, CMA CGM advising that from 15 January it will charge $6,000 to ship a 40ft container from Asia to North Europe. [5]

SOURCES & REFERENCES

[1] https://splash247.com/shipping-starts-shelling-out-for-eu-allowances/

[2] https://theloadstar.com/red-sea-attacks-continue-despite-naval-protection-and-shipping-costs-soar/

[3] https://theloadstar.com/supply-chain-confusion-and-sky-high-rates-ring-in-the-new-year-for-shippers/

[4] https://gcaptain.com/msc-worlds-largest-shipping-line-2023/

[5] https://theloadstar.com/shippers-facing-huge-wave-of-rocketing-ocean-rates-and-new-surcharges/

As always, the Inter-Sped team will do their utmost to ensure we provide the very best services & outperform the industry as a whole.

Best Regards

Coenie & The Inter-Sped Team.