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Freight & Logistics Update – 17 May 2024

Freight & Logistics Update – 17 May 2024

Good Day Clients & Partners,

Herewith the latest Freight & Logistics Update.  As always, the Inter-Sped team are ready to go the extra mile for you – so don’t hesitate to contact us with any questions you may have.

SOUTH AFRICA    

Extended berthing delays continue to be experienced across all ports in South Africa. Delays upwards of two weeks continue to be experienced at Durban ports Pier 2 terminal and still estimates several weeks for shipping lines to restore schedule reliability across the trade routes. We expect more blank sailings, port omissions and changes to voyages being announced at short notice.

DURBAN

The port has experienced low wind speeds during the week.

  • Pier 1 : 5-6 days delay
  • Pier 2 : 19 days delay
  • Durban Point : 3 days delay

 

CAPE TOWN

The port has experienced strong winds during the week.

  • CTCT : 4-8 days delay
  • MPT : 4-5 days delay

 

PORT ELIZABETH

The port has experienced windy weather during the week.

  • PECT : 3-4 days delay
  • NCT : 1-3 days delay

 

AFRICA & INDIAN OCEAN ISLANDS    

ANGOLA

  • Berthing delays of 3 days experienced at Luanda port.

 

GHANA

  • Berthing delays of 2 days experienced at Tema port.

 

IVORY COAST

  • Berthing delays of 2 days experienced at Abidjan port.

 

KENYA

  • Berthing delays of 2 days experienced at Mombasa port.

 

MAURITIUS

  • Berthing delays of 4 days experienced at Port Louis.

 

MOZAMBIQUE

  • Berthing delays of 4 days experienced at Maputo port.

 

NAMIBIA

  • Berthing delays of 3 days experienced at Walvis Bay port.

 

NIGERIA

  • Berthing delays of 3 days experienced at Apapa port.

 

TANZANIA

  • Berthing delays of 15 days experienced at Dar es Salaam port. Delays are due to vessels bunching and high levels of congestion.

 

NORTH AMERICA    

CANADA

Montreal

  • Berthing delays of 5 days experienced at this port.

Toronto

  • Berthing delays of 10 days experienced at this port.

Vancouver

  • Berthing delays of 2 days experienced at this port. The strike commencement on May 22, 2024, is suspended till further notice.

 

USA

Terminals Updates:

  • New York/New Jersey – Vessel waiting time is up to 3 days.
  • Norfolk – Vessel waiting time is up to 2 days. Berth congestion has eased. Baltimore port closure is having a slight effect on NIT berth/terminal congestion.
  • Charleston – Vessel waiting time is up to 2 days. Dock construction at Wando Welch terminal started on March 11, 2024, reducing berth space from 3 to 2 berths for one year. Berths will be given on first come, first serve basis.
  • Savannah – Vessel waiting time is up to 4 days.
  • Miami/Port Everglades – Vessel waiting time is up to 2 days.
  • Houston – Vessel waiting time is up to 4 days.
  • Los Angeles/Long Beach – Vessel waiting time is up to 3 days.
  • Seattle – Vessel waiting time is up to 3 days. Terminal 18 will be closed on May 10, 17 and 24, 2024.
  • Oakland – Vessel waiting time is up to 2 days. Port of Oakland has started the bollard and fender replacement project at OICT, starting with Berth 55 through Berth 59. Project is expected to last into Q1 of 2025.

 

LATIN AMERICA    

BRAZIL

  • Berthing delays of 2 days experienced at Santos port.

 

NORTH WEST CONTINENT, UNITED KINGDOM, MEDITERRANEAN    

BELGIUM

  • Berthing delays of 2 days experienced at Antwerp port.

 

FRANCE

  • Berthing delays of 4 days experienced at Le Havre port. All terminals in Le Havre will close the gates from 07/20:00 – 10/06:00 due to national holiday but water side operations will continue regularly.

 

GERMANY

  • Berthing delays of 3 days experienced at Hamburg port and 1 day at Bremerhaven port. TerminalS will stop operations for the Pentecost holiday on 18/05 12:30 until 20/05 07:00. Monday (20/05) terminal will be working with voluntary labor.

 

ITALY

  • Berthing delay of 1 day experienced at Genova port and 7 days at La Spezia port.

 

NETHERLANDS

  • Berthing delays of 3 days experienced at Rotterdam port. Slight operational challenges this week due to insufficient tug capacity in the port of Rotterdam.

 

SPAIN

  • Berthing delays of 4 days experienced at Barcelona port. Train service between Bilbao and Valencia will be interrupted due to maintenance works from May 15 to 20, 2024.

 

SWEDEN

  • Increased berthing delays of 7 days experienced at Gothenburg port.

 

TURKEY

  • No berthing delays days experienced at Istanbul port.

 

UNITED KINGDOM

  • Berthing delays of 6 days experienced at London Gateway port. Commissioning of recently delivered new Gantry cranes in progress. Second batch of cranes just left Singapore and is expected by end of May, beginning of June.

 

INDIAN SUB-CONTINENT & MIDDLE EAST    

INDIA

  • Berthing delay of 1 days experienced at Nhava Sheva port and no delays at Chennai port.

 

UNITED ARAB EMIRATES

  • Berthing delays of 4 days experienced at Jebel Ali port.

 

ASIA PACIFIC (Including Oceania)    

HONG KONG

  • Berthing delay of 1 day experienced at this port.

 

KOREA

  • Berthing delay of 1 day experienced at Busan port.

 

MALAYSIA

  • Berthing delay of 1 day experienced at Port Kelang.

 

NANSHA

  • No berthing delays experienced at this port.

 

QINGDAO

  • Berthing delay of 1 day experienced at this port.

 

SHANGHAI / NINGBO

  • Berthing delays of 2 days experienced at Ningbo and Shanghai ports.

 

SHEKOU / YANTIAN

  • Berthing delays of 3 days experienced at Shekou port and 1 day at Yantian port.

 

XIAMEN

  • Berthing delays of 2 days experienced at this port.

 

XINGANG

  • Berthing delay of 1 day experienced at this port.

 

SINGAPORE

  • Berthing delays of 4 days being experienced at this port. Delays experienced due to bunching of vessels and congestion experienced at the port. FCL containers transshipping in Singapore have expected delays of plus 3 weeks.

 

TAIWAN

  • Berthing delay of 1 day experienced at Kaohsiung port.

 

THAILAND

  • Berthing delays of 2 days experienced at Bangkok port.

 

VIETNAM

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

 

NEWS ARTICLES    

Maersk Challenges Rival’s Bid for Durban Container Port Concession:

Date: 07/05/2024

Maersk, based in Copenhagen, is contesting the award of a contract to manage and expand Durban’s main container terminal, the largest in sub-Saharan Africa. The contract was granted to International Container Terminal Services Inc. (ICTSI), a firm owned by Filipino billionaire Enrique Razon. Maersk claims in court that ICTSI did not meet the necessary solvency requirements set by South Africa’s state-owned Transnet SOC Ltd. when it won the tender. The concession allows ICTSI to purchase nearly half of the terminal and operate it for 25 years. Maersk’s legal action in the Durban High Court could delay or disrupt efforts to bring private expertise to improve Transnet’s ports, which are some of the least efficient globally, according to the World Bank.

Maersk’s subsidiary, APM Terminals, argues that ICTSI’s solvency ratio was only 0.24, below the required 0.4, based on 2021 financial data. ICTSI, however, defends its financial stability, highlighting over $1 billion in cash reserves and claiming it was chosen as the best operating partner due to its high bid. Transnet maintains that it followed proper procedures in selecting ICTSI and plans to finalize the contract after due diligence. Maersk, as the runner-up in the bidding process, raises concerns about ICTSI’s capability to handle the complex and extensive project. Source

 

Bridge Debris Removal from the Dali Underway:

Date: 06/05/2024

Salvage teams are working to remove a large piece of bridge debris lying on top of the vessel Dali. The operation, overseen by the Key Bridge Unified Command, is expected to be completed by May 10, allowing the reopening of a 45-foot-deep section of the main shipping channel. The teams are carefully handling the roadbed material, crushed containers, and bridge fragments on the Dali’s bow to ensure a safe and efficient refloat of the vessel.

The United States Army Corps of Engineers estimates that 3,000 to 4,000 tons of bridge wreckage are pinning the Dali to the bottom. The vessel lost power and struck the bridge on March 26, causing a collapse that resulted in at least six fatalities and significant property damage in Baltimore. Specialized equipment is being used to monitor the Dali and the debris, and 182 containers have been removed to facilitate the operation. The Key Bridge Unified Command emphasizes public and responder safety, infrastructure restoration, and environmental protection, maintaining a 2000-yard safety zone around the site and enforcing a strict no-drone policy. Source

Maersk Prepares for Potential Rail Strike in Canada:

Date: 09/05/2024

With a potential rail strike in Canada set for May 22, Maersk has developed a contingency plan to handle North America west coast port operations, warning of significant backlogs and extended recovery times. The strike threat comes from the Teamsters Canada Rail Conference (TCRC), which represents Canadian rail workers. After five months of unsuccessful negotiations with Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC), the union has called for industrial action if no deal is reached by the deadline. Both rail operators have expressed concerns that an agreement might not be achieved in time.

In preparation, Maersk has been collaborating with CN, CPKC, and DP World to minimize congestion at Canadian west coast ports. Maersk plans to reroute its TP1 service to the Seattle-Tacoma Northwest Seaport Alliance for four upcoming sailings, instead of dispatching cargo in Vancouver and transporting it cross-border. This change, starting with the Maria Y, aims to manage US import and export rail cargo more efficiently. However, there are concerns that diverting cargo to Tacoma could exacerbate existing bottlenecks in the US rail network, which is already dealing with staffing and congestion issues. Additionally, Maersk is exploring options to divert cargo to Prince Rupert and is considering limited truck transport within Canada. Meanwhile, CN has reached a tentative four-year agreement with its trucking subsidiary, CNTL, covering around 750 owner-operators until the end of 2027. Source

 

Severe Flooding Paralyzes Southern Brazil:

Date: 07/05/2024

Massive floods in Brazil’s Rio Grande do Sul have killed at least 85 people and caused widespread disruption. Over 130 people are still missing, more than 19,000 are homeless, and around 150,000 have been displaced across nearly 350 municipalities. The ports of Porto Alegre, Rio Grande, and Tramandai have shut down completely, halting all logistical operations in the state. Porto Alegre’s Salgado Filho International Airport is also flooded, leading to a suspension of all flights and port operations, including crew changes.

The flooding, which began with heavy rains on April 27, has caused significant damage. The 100MW 14 de Julho hydroelectric plant’s dam on the Antas River ruptured, prompting an emergency evacuation. Major businesses, including steelmaker Gerdau, logistics company Rumo, and petrochemical giant Braskem, have suspended operations due to safety concerns. Rainfall in some areas exceeded 300 mm in less than a week, with Bento Gonçalves recording 543.4 mm. The Brazilian government has asked Congress to declare a state of public calamity to enable extra spending for disaster response without adhering to fiscal caps. This disaster has revived memories of the 2015 dam collapse at a Samarco iron ore mine, which caused significant loss and damage. Source

 

West Mediterranean Ports Face Capacity Challenges Due to Transshipment Surge:

Date: 09/05/2024

The west Mediterranean container ports are grappling with increased transshipment traffic, especially as the Red Sea crisis continues. The closure of the Suez Canal has prompted carriers to adjust their networks, avoiding sending ultra-large container ships into the eastern Mediterranean. As a result, ports like Algeciras, Tanger Med, Barcelona, Valencia, and Las Palmas are experiencing higher transshipment volumes. Barcelona, in particular, saw significant year-on-year increases in transshipment traffic for the first quarter of 2024.

This surge in volume is pushing some ports close to or beyond their design capacities. Barcelona’s container terminals handled 3.4 million TEUs in 2023, and a projected 60% increase could overwhelm its capacity. Similarly, Algeciras and Valencia are nearing their limits, with growth rates suggesting they will handle just over 5 million TEUs each, close to their maximum capacities. Las Palmas is also facing a potential overflow, with transshipment traffic projected to hit its 1.6 million TEU capacity.

To address these challenges, additional capacity at other ports is being considered. Tanger Med in Morocco, with a capacity of 10.4 million TEUs, and the port of Sines in Portugal, with a capacity of 2.7 million TEUs, are potential alternatives. There is also the possibility of reviving full-scale operations at Malaga and Castellon, which currently have underutilized capacities. These measures are being evaluated to prevent severe congestion and ensure efficient handling of the increased transshipment traffic. Source

 

Colombo Port Congestion Forces Carriers to Seek Alternatives:

Date: 10/05/2024

Due to capacity issues at Sri Lanka’s Colombo Port, carriers are rerouting transshipment cargo to other ports in the subcontinent. Adani Ennore Container Terminal (AECTPL) near Chennai has seen a surge in ad-hoc vessel calls from MSC, which has caused operational chaos and delays in the region. MSC’s recent purchase of a 49% stake in AECTPL from Adani Group has intensified this activity. The unexpected influx of vessels at Ennore is disrupting regular services and causing significant delays.

The situation at Ennore has been further complicated by recent power outages, affecting vessel schedules and terminal productivity. For instance, CMA CGM’s APL Boston faced delays due to these outages. Meanwhile, PSA Chennai Terminal is also experiencing slowdowns, contributing to congestion and long truck queues. As a result, MSC is deploying additional vessels to manage the rerouted cargo. This disruption is driving carriers to seek alternative ports, such as Hambantota International Port and Colombo’s East Container Terminal, which is still under development. Despite these challenges, Ennore reported a 22% year-on-year increase in container volumes for the fiscal year 2023-24. Source

 

MSC Container Ships Targeted by Houthi Attacks in Gulf of Aden:

Date: 08/05/2024

Two MSC container ships, the MSC Gina and MSC Diego, came under attack by Houthi rebels on May 7 while passing through the Gulf of Aden. The MSC Gina, which was attacked about 315 kilometers south of Yemen’s Socotra island, experienced its second assault by the Yemeni militia. At the same time, the MSC Diego, another 4,000 TEU vessel, was also targeted. Fortunately, no seafarers were injured in these incidents.

These attacks are part of a series of assaults by Iran-backed Houthi rebels from the Ansar Allah movement, who have been targeting maritime trade since November 19. Since their initial air assault on the Galaxy Leader in the southern Red Sea, nearly 100 commercial vessels have been attacked. Recently, Iran released the crew of the MSC Aries, who were seized in the Strait of Hormuz, following consular intervention. However, the crew of the Galaxy Leader remains captive in Yemen, marking over 160 days since their abduction. Source

 

Asia-Europe Ocean Trade Faces Pandemic-Level Demand Surge:

Date: 08/05/2024

Forwarders are warning that demand for Asia-Europe ocean trade is skyrocketing, resembling the peak of the pandemic. A UK forwarder described the situation as “shocking,” noting that the rapid increase in demand has led box lines to drop FAK rate quotes and cut contract capacity. The forwarder observed a 10-20% year-on-year growth among their customers, attributed to restocking and longer transit times requiring additional stock in transit. This surge coincides with the traditional peak season in May, creating a challenging scenario for importers.

Scan Global Logistics echoed these concerns, highlighting a surge in Asia westbound ocean freight levels due to sustained capacity demand, blank sailings, and a bleak outlook for the Red Sea crisis. Container carriers are taking advantage of the situation, implementing peak season surcharges and GRIs. Rates for Asia-LatAm routes have also soared, and capacity is being diverted to more profitable lanes. This has led to a significant divergence between long-term contract rates and short-term spot rates, sometimes varying by more than $3,000 per 40ft container. Additionally, a shortage of containers is exacerbating the problem, with container prices rising due to the uncertainty in the Red Sea and diversions around the Cape of Good Hope.

Forwarders and logistics companies are asking for understanding from customers, expecting the challenging conditions to persist through May. The situation is leading to capacity shortages and rising ocean freight rates, with little relief in sight. However, some predict that demand will decline rapidly after the October Chinese Golden Week, potentially easing the pressure on the market. Source

 

Improvement in delays could ramp up overcapacity:

Date: 10/05/2024

Shipping lines might soon face an overcapacity issue if round-Africa services improve to pre-pandemic reliability levels. More reliable schedules could add up to 4% extra capacity this year, alongside a 9% increase from new vessel deliveries. Alan Murphy, CEO of maritime consultancy Sea-Intelligence, explains that vessel delays typically absorb a portion of global capacity. Historically, this has ranged from 1%-3%, peaking at 14% during the pandemic. In March, fleet absorption from delays was 5.7%, down from 7.5% in January.

Sea-Intelligence’s research shows that while current delays absorb less capacity than during the pandemic, improvements in schedules and new vessel deliveries could significantly increase market capacity. Removing the normal background level of delays helps gauge the impact of specific events like the pandemic. During the pandemic, up to 13.8% of global capacity was unavailable. Early 2024 saw a minor spike, but it is quickly diminishing. Thus, as round-Africa service delays improve and new ships are added, shipping lines may encounter substantial overcapacity. Source

 

A ‘carrier-controlled market’ as spot rates rise and capacity tightens:

Date: 10th May 2024

The container shipping market is experiencing a surge in spot rates and tightening capacity, described as a “carrier-controlled market.” Peter Sand, Xeneta’s chief analyst, highlighted the irrationality of the current market conditions. The ongoing Red Sea crisis and higher-than-expected demand have caught many Asia-Europe forwarders off guard, resulting in a significant rise in spot freight rates. For example, Drewry’s World Container Index (WCI) saw the Shanghai-Rotterdam rate jump 20% to $3,709 per 40ft, aligning with the Xeneta XSI level of $3,716, which represents a 15% increase. The Shanghai-Genoa route also saw a 16% rise to $4,295 per 40ft.

As spot rates climb, capacity from Asia is tightening, leading carriers to prioritize higher-paying FAK shipments over contract cargo. Maersk has introduced a $1,500 per 40ft peak season surcharge (PSS) from Asia to North Europe, with other carriers likely to follow suit. Forwarders are facing challenges securing bookings, with some experiencing reduced allocations and additional surcharges. One forwarder noted that genuine demand and careful capacity management by carriers are driving the volume increases.

Sources predict significant rate increases for the second half of May, potentially reaching $5,000 per 40ft on Asia-North Europe and $5,400 on Asia-Mediterranean routes by June. This early peak season could lead to even higher rates in the third quarter if demand continues to grow. Spot rates on Asia-North America trades have also surged, with the XSI transpacific rate rising 145% to $3,754 per 40ft, and the WCI Shanghai-New York route jumping 116% to $5,089 per 40ft. Source

 

SOURCES & REFERENCES     

SACO CFR | Hapag Lloyd | Maersk | MSC | Transnet | The LoadStar Publications | gCaptain.com | Shipco Transport | Splash247.com | Freightnews | Hellenic Shipping News | Seatrade Maritime News | JAS Newsflash

We continue to monitor the freight world developments closely, and will be in contact with you directly for updates relevant to you on an individual shipment level.

 

Best Regards,

JJ & The Inter-Sped Team