Freight & Logistics Update 17 May 2023

Good morning, Clients & Partners,

Below please find our latest industry update & news.

As always, we will keep you posted on any impacts to your cargo on an individual shipment level. If you have any questions please don’t hesitate to get in touch.

SOUTH AFRICA

DURBAN

Port berthing delays are minimal and remain the same as seen in week 18. The port has reported strong winds during the week.

Pier 1 : 0 days
Pier 2 : 0 days
Durban Point : 2 days

CAPE TOWN

Berthing delays at terminals in Cape Town have improved however continues to be experienced. The port experienced strong winds during the week.

CTCT : 3-5 days
MPT : 2 days

PORT ELIZABETH

No changes to berthing delays experienced in recent weeks. The port has reported strong winds during the week.

PECT : 0-3 days
NCT : 0-2 days

AFRICA & INDIAN OCEAN ISLANDS

MAURITIUS

Increased berthing delay of 5 days experienced at Port Louis.

ANGOLA

Increased berthing delay of 5 days experienced at Luanda port.

GHANA

Berthing delay of 2 days experienced at Tema port.

NIGERIA

Berthing delay of 1 day experienced at Apapa port.

TANZANIA

Berthing delay of 2 days experienced at Dar es Salaam port.

KENYA

Berthing delays of 2 days experienced at Mombasa port.

MOZAMBIQUE

Berthing delay of 1 day experienced at Maputo port.

NAMIBIA

Berthing delay of 3 days experienced at Walvis Bay port.

NORTH AMERICA

UNITED STATES OF AMERICA

Terminal updates

NY/NJ – Vessel waiting time is up to 1 day. Import Dwell time at APM terminal is 1 day.
Norfolk – Vessel waiting time is up to 2 days. Two cranes down at Norfolk Int’l Terminal, however, no negative impact in the week.
Savannah – Vessel waiting time is up to 2 days.
Charleston – Vessel waiting time is down to 1 day.
Miami/Port Everglades – Vessel waiting time is up to 2 days.
Houston – Vessel waiting time is 3 days. Barbours Cut Container Terminal continues to experience berth congestion due to high yard utilization.
Los Angeles/ Long Beach – Vessel waiting time is up to 4 days.
Seattle – Vessel waiting time 3 days.
Oakland – Vessel waiting time 3 days.

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.

CANADA

Vancouver: No berth congestion and ships are working immediately once alongside. Yard utilization at GCT has decreased and is presently at 84%. Rail productivity remains below expectations due to reduced car supply by both rail providers. Dwell times remain high at 6.1 days and it is expected that this will remain high as railcar supply remains inconsistent.

MONTREAL

Montreal: Vessels are arriving on proforma schedule. Once alongside, productivity is stable and vessel changes are not expected. There are no issues with labour availability, and there is good productivity in the terminal yard.

LATIN AMERICA

BRAZIL

Berthing delay of 2 days experienced at Santos port.

NORTHWEST CONTINENT, UNITED KINGDOM, MEDITERRANEAN

Vessel schedule delays continue to impact the region. Amended port rotations and port omissions on the carrier services, as well as vessel changes, cascading / rolled schedules and blank sailings may result in amended LCL cargo loading schedules. Import containers from the region destined for Cape Town with MSC as the shipping line is experiencing severe delays on the MSC Shosholoza feeder service from Port Elizabeth to Cape Town where containers are being rolled more than once.

BELGIUM

Berthing delay of 2 days experienced at Antwerp port. AGW Terminal received 3 new gantry cranes currently undergoing testing, will be available for full operations during the summer.

GERMANY

Berthing delay of 2 days experienced at Hamburg port and no delays experienced at Bremerhaven port.

UNITED KINGDOM

Berthing delay of 2 days experienced at London Gateway port. First phase of dredging works successfully completed without impact to operations. Busy line-up this week but all vessels with a berth window.

SPAIN

Berthing delays of 2 days experienced at Barcelona port.

ITALY

Reduced berthing delays of 3 days experienced at Genova port, while a berthing delay of 4 days experienced at La Spezia port. Genova, GPT terminal has possible gate in restrictions for DG exports, due to elevate number of IMO cargo congesting the terminal.

NETHERLANDS

Berthing delay of 1 day experienced at Rotterdam port. Port of Rotterdam with the second busy week which led to smaller delays due to Pilot and Tugboat capacity shortages.

FRANCE

Berthing delay of 1 day experienced at Le Havre and Fos-sur-Mer ports. Terminals are continuing with the positive trend with another week of no strike. Yards are reducing and vessel congestion is nullified. In line with the reduced yard the productivity is noticeably increasing.

INDIAN SUB-CONTINENT and MIDDLE EAST

Loading schedules from these regions continue to be planned around released carrier schedules, therefore packing dates, and intended sailing dates are subject to change. Middle East and Indian Sub-Continent carrier capacity remains available from the region, and delays in vessel scheduling remains the only challenge impacting the region. Schedules are maintained where possible and multiple carriers are used on these services to maintain service reliability. Carrier Ocean Network Express has announced their AIM service from the Indian Sub-Continent to Southern Africa will now offer weekly services as opposed to the erratic schedules previously experienced.

INDIA

Berthing delay of 1 day experienced at Nhava Sheva and Chennai ports. Only one berth available at Nhava Sheva GTI due to terminal upgrade.

UNITED ARAB EMIRATES

Berthing delay of 1 day experienced at Jebel Ali port.

ASIA PACIFIC

Most of the Asia terminals operations are close to normal with average waiting times up to 1 day, except for Pusan and Ningbo due to bunching of vessels and surge in mega vessels handled by these ports. Hazardous commodity acceptance out of China remains a challenge as approval for loading remains subject to carriers’ stringent acceptance protocols.

HONG KONG

Berthing delay of 1 day experienced. Trucking services from China into Kong Kong are fully functional.

TAIWAN

Berthing delay of 1 day experienced at Kaohsiung port.

SHANGHAI / NINGBO

Berthing delay of 3 days experienced at Shanghai and Ningbo ports.

QINGDAO

Berthing delay of 3 days experienced.

XIAMEN

Berthing delay of 3 days experienced.

XINGANG

Increased berthing delay of 11 days experienced.

KOREA

Berthing delay of 1 to 4 days experienced at Busan port. Vessel bunching occurred outside the port.

VIETNAM

Berthing delay of 1 day experienced at Hai Phong and Ho Chi Minh ports.

SINGAPORE

Berthing delay of 1 day experienced.

NEWS ARTICLES

US Unlikely To Sanction South Africa In Russia Weapons Dispute.

Date: 14 th May 2023

By: Reuters (gCaptain)

“South African Finance Minister Enoch Godongwana said his country had resolved a dispute with the U.S. over allegations that Pretoria supplied weapons to Russia, and South Africa is unlikely to face U.S. repercussions, Bloomberg News reported Godongwana said in an interview on Sunday.

“A number of actions were taken in order to ensure that our relationship with the US remains, and that relationship should be normal and cordial,” the minister told Bloomberg in an interview in Cape Town on Sunday. “The Americans are not likely to respond with any anger tomorrow.”

U.S. Ambassador to South Africa Reuben Brigety said last week he was confident that a Russian ship had picked up weapons in South Africa in December, in a possible breach of Pretoria’s declared neutrality in the Ukraine conflict. South Africa’s government denied the claims. After a meeting between Brigety and South African Foreign Minister Naledi Pandor on Friday, the ambassador “admitted that he crossed the line and apologized unreservedly,” a South African government statement said on Friday.

A finance ministry statement on Saturday said, “Action was taken long ago once this matter was brought to the attention of South African officials” when U.S. Secretary of Treasury Janet Yellen met with Godongwana in February. When asked for comment, the U.S. State Department referred to a tweet by Brigety on Friday that said he had corrected “any misimpressions left by my public remarks.” [1]

Durban transporters call for meeting over truck booking system.

Date:12 th May 2023

By: Freight News by FTW

Transnet Port Terminals (TPT) announced last week that it had recorded an improvement in truck turnaround time at Durban Container Terminals following the implementation of an adjusted free import storage rule seven months ago. However, Durban port stakeholders, reacting to the announcement on Friday, said that while there had been an improvement a few weeks ago, truck turnaround times in the port were averaging 3.5 to five hours and left much to be desired.

According to TPT, the container terminals had shown “significant improvements” in key metrics such as truck turnaround time of 15%, averaging 59 minutes by the end of the 2022/23 financial year. Truck staging had decreased by 24%, averaging 76 minutes, and stack occupancy levels had decreased by 18%, averaging 54%.

Durban Terminals managing executive Earle Peters said the change in rule to count the 78 hours of free storage the moment a container had been discharged from a vessel had eliminated time wastage, compared to the old rule when containers were only counted after all the containers on a vessel had been offloaded.

“For an operation of our size, yard fluidity is crucial. Its improvement eases traffic on public roads and creates fluidity in the operational area,” Peters said. He added that transporters receiving notifications in real-time from the terminal operating system Navis had also enhanced effectiveness. Peters said that to sustain operational efficiencies, the terminal management had focused on managing truck movements, employing mass evacuation strategies in the yard, better managing the truck staging area, and maximising the effective use of straddle carriers.

“These achievements are a testament to the terminal’s commitment to continuous improvement and its focus on providing the best possible service to our customers. We are proud of the progress we have made to date, and we remain dedicated to finding innovative ways to further enhance our operations through ongoing collaboration with transporter associations and industry stakeholders,” Peters said.

However, transporters have complained that the port has not been particularly efficient over the past two weeks. Durban Harbour Carriers chairperson Sue Moodley said the port’s Pier 1 and Pier 2 terminals had not been efficient due to the unavailability of equipment over the past two weeks.

“There are a lot of breakdowns, and as a result, the number of truck booking slots has been reduced, so we cannot access our containers when we want to.” She said the revised booking system that was implemented in March 2020 to improve efficiency during the Covid-19 pandemic was not working efficiently.

“The booking system has parameters that need to be met with adequate resources. There were 27 running straddles but only 20 or 22 are now working, so they had to reduce the number of slots. There are insufficient skilled operators available too,” she said. According to Moodley, Transnet is reviewing slot availability every two to four hours, but because trucks are currently not being turned around in 90 minutes, new slots are not opening quickly enough to give transporters access to pick up boxes.

“The accessibility of containers is a challenge that transporters deal with daily due to the limitation of slots, especially when a specific tower is busy. This impacts negatively, not just on the transporter but also on the customer and the entire logistics chain. “We as an association have engaged with Transnet and asked them to revisit the booking system and its parameters and to make it more workable. We are waiting for them to have the discussion with us,” she said.

Dave Watts, an independent consultant to the maritime sector, said that while the scenario painted in the announcement may have been correct three weeks ago, the current situation was that trucks were taking 3.5-five hours on average to be turned around in the port. He said a shortage of equipment was part of the problem, causing the inefficiencies that were leading to delays.” [2]

Alliance rivals ready to cash in if 2M divorce gets messy.

Date: 10th May 2023

“THE Alliance and Ocean Alliance vessel-sharing partners are taking full advantage of the 2M’s potentially messy divorce to beef up their east-west networks and grab market share. Both Ocean and THEA members announced network upgrades last month, whereas, as the notice period for the disbandment of the 10-year VSA continued, 2M partners Maersk and MSC kept their strategy cards close to their chests.

However, these polar-opposite strategies are understood to be becoming more evident in operational discussions as the notice period ticks on, with one source telling The Loadstar communication was being kept to a minimum, and that the two carriers were “pulling in different directions” on capacity management.

During Maersk’s Q1 earnings, CEO Vincent Clerc said the company would publish its standalone network plans “in due time, once we have operational control”.

He said: “We do believe we can actually create a network where we can increase asset intensity, so we will need less capacity to move the same amount of volumes, with less carbon footprint, more reliability and, also, very competitive transit times. “We cannot do that today, in an alliance set-up, we will do that once we get out of the alliance,” he added.

Meanwhile, THEA partners Hapag-Lloyd, ONE, Yang Ming and HMM are busy upgrading their AsiaEurope loops following the delivery of newbuild 24,000 teu vessels. Alphaliner reports that Japanese carrier ONE’s 24,000 teu ONE Innovation, currently on sea trials, is to be deployed on THEA’s Asia-North Europe FE3 loop, commencing its maiden voyage from Ningbo on 4 June.

According to the consultant, the vessel will replace the 16,010 teu HMM Garam, which will be cascaded onto THEA’s Asia-Med MD2 loop. Alphaliner said: “Until recently the FE3 fleet consisted of 11 14,600-16,000 teu ships. The upgrade of the service started last month with HMM shifting the 23,964 teu HMM Le Havre and its sister ship HMM Gdansk to this loop.” The FE3 service is the second THEA Asia-North Europe loop to be upgraded to 24,000 teu class vessels, after the FE4 loop deployed 11 24,000 teu ULCVs provided by HMM. As new contract rates settle at “just above spot”, the 24,000 teu behemoths are becoming the new workhorses of the tradelane, with carriers refocusing on slow-steaming and maximising utilisation in order to produce positive voyage results. Moreover, some THEA backhaul sailings from North Europe and the US east coast to Asia are sailing via the longer-transit Cape of Good Hope route to save on Suez Canal toll fees and as a form of capacity management.

Indeed, the pressure is on for the shipping lines after a better-than-expected first quarter – due to the tailwind effect of unexpired higher contract rates – to break even in the next quarters of trading. After Maersk’s Q1 results last week, it is the turn of Hapag-Lloyd, tomorrow, to update its outlook for the full-year. On 2 March, the Hamburg-headquartered carrier said it expected an ebit of $2.1bn to $4.3bn for the year, but cautioned that this forecast was “subject to considerable uncertainty”. [3]

No signs of an uptick for a US trucking sector stuck in low gear.

Date: 12th May 2023

“The road ahead remains bumpy for US trucking operators, as macroeconomic indicators point to soft demand, while capacity remains high.

According to the latest Uber Freight Market Update & Outlook, this is corroborated by low-key projections from carriers as they tabled their results for the first quarter. Uber Freight’s analysts draw a picture of a market characterised by sluggish demand, and ample capacity – and in Q1 last year, capacity expanded 7%, whereas demand was down 1%.

This is keeping the pressure on rates and has resulted in more tender acceptance rates as carriers cramble for business. The major drivers of demand seem stuck in low gear. Relative to sales, inventories have been stable, as consumer spending was largely flat in the quarter.

Manufacturing fared worse, with output shrinking 1.1%, year on year, in March. Manufacturing has contracted for six months, and new orders point to more contraction ahead, which is expected to translate into lower volumes.

With these macroeconomic indicators suggesting lacklustre demand in the coming months, Uber Freight’s analysts see no signs of a market rebound. Recovery, widely predicted earlier in the year, is receding further into the future.

And this outlook is echoed in the recent earnings calls by major operators. Old Dominion has revised its expectations for Q1 and continues to focus on managing costs, said CEO Greg Gantt, and while Mark Rourke, president and CEO of Schneider National, sees a chance of moderate recovery in the second half, he stressed that the outlook was uncertain. And Heartland Express CEO Mike Gerdin, added: “Demand is significantly less than it has been in the last two years, along with significant pressure from many shippers to reduce freight rates while operational costs continue to rise.”

First tender acceptance rates reflect the carriers’ predicament. They stood at 94.3% in the dry van segment, 94.7% in the reefer van category and 99% for intermodal traffic. Carriers have been struggling. According to Uber Freight, carrier authority revocations eased in the first quarter, but remain “very high”.

The driver pool expanded 3.1%, year on year, in the first quarter, with 2,400 more jobs, although finding long-distance drivers remained challenging. Uber Freight predicts weaker growth in new jobs, going forward, due to the stagnating demand.

The truckload sector continued its journey through a challenging market with spot rates largely flat throughout Q1, while contract rates were in decline as shippers pressed for cost cuts. Although truckload spot rates did not move much in the first quarter, Uber Freight analysts concluded that there was no sign of a bottom and expect prices to decline further before the summer produce season kicks in. This should bring some modest rate increases, but of no lasting impact, they noted.

With the PMI in contraction, less-than-truckload (LTL) carriers expect volume decline. The sector continues to fare better than truckload, thanks to higher entry barriers and better pricing discipline, but it is feeling the pressure. Most affected has been Yellow Freight, which reported a 12% Q1 drop in tonnage.

Despite the pricing discipline, LTL rates continue to decline slightly, as carriers are more aggressive in their pursuit of new business, according to Uber Freight. And, on the bright side, on-time performance has improved in the sector, analysts observed. For intermodal service providers, the quarter proved another disappointing spell. Volumes have been down in 19 of the past 20 months, sending spot rates down to levels not seen since 2016. And Uber Freight’s analysts don’t expect a rebound in the sector before 2024, but any growth will be from a low base this year, they predicted.

In the longer term, they expect supply issues for over-the-road capacity to drive volumes to intermodal carriers. But now, however, the sector is being severely hit by the decline in imports, they note, adding that some customers shifted traffic to road for faster transits.

However, Uber Freight pointed out that the labour dispute on the US west coast did not appear to be a factor and noted that intermodal volumes in Canada had declined even more than in the US. In fact, the intermodal market has been weak right across North America. Volumes held up best in Mexico, but that market has traditionally been characterised by high volatility. With clouds over macroeconomics, recovery for truckers remains elusive. They will have to navigate the coming months in low gear.” [4]

Germany Approves COSCO Stake in Hamburg Port Terminal

Date: 10th May 2023

Port logistics firm HHLA said on Wednesday the German government has cleared the purchase by China’s Cosco of a 24.9% stake in a container terminal in the sea port of Hamburg, amid a political row over Chinese investment in the German economy.

A spokesperson for the German government said in a statement that Berlin had informed HHLA and Cosco that their reworked deal was compliant with a cabinet decision in the fall of last year that limits the ownership of Chinese state firm Cosco in the terminal to less than 25%.

The deal was also in line with Berlin declaring the terminal, known as Tollerort, as critical infrastructure this year, the statement added. The clearance comes even after German economy ministry said last month that it was reviewing a decision to allow Cosco to take the stake. China’s foreign ministry at the time urged Germany to be “objective and rational” in its review. [5]

REFERENCES & ACKNOWLEDGEMENTS