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Freight & Logistics Update 23 November 2023

Freight & Logistics Update 23 November 2023

Dear Clients and Partners,

Below find this week’s Freight & Logistics Update – as always, shout if you have any questions or queries.

SOUTH AFRICA    

AIRFREIGHT

A reminder about a notice we sent out last week. We have seen a surge in demand for space on Air Imports into South Africa – this has been attributed to 2 factors:

  1. An increase in Sea freight to airfreight conversions as many South African importers are forced to move emergency stock in via Airfreight as their Sea Freight orders are delayed due to South Africa’s Port congestion.
  1. An e-commerce related demand spike focused mainly in China & Hong Kong that is exasperating capacity shortages.

 

The consequences have been:

  1. An increase in rate volatility.
  2. Cargo capacity shortages.
  3. Increased cargo off-loads & longer transit times.

 

SEAFREIGHT

South African ports – Durban especially – are experiencing massive delays – Quick overview as follows:

  • Transnet has advised it will take them anywhere between 7 & 15 weeks to clear the backlogs as a total of 96 vessels awaiting anchor outside South African ports.
  • One estimate on the cost to the economy has it at ZAR 98 Million (USD 5.32 M) per day.
  • Sailing schedule integrity has been hit hard and there has been an increase in port omissions (When vessels no longer call on Ports they were originally planned to sail to). Further impacting hard hit supply lines.
  • Imports and exports alike are likely to miss their December / Festive season Targets.
  • The snarl-up in South Africa’s ports is SA ports is jamming up trade across the region, with exporters & importers turning to Airfreight and road freight (Where appropriate) to get their products in and out of the country.
  • Shipping lines have introduced Congestion surcharges to help mitigate the extra costs they are incurring by servicing South African ports.

 

For a more in-depth reading on the above:

 

Now onto the port specific summary:

DURBAN

The Durban port faces significant delays attributed to:  Non-operational terminal equipment & ongoing breakdowns, Low labor productivity and adverse weather conditions.

  • Delayed berthing of vessels, resulting in an average of 18-21 days delays (resulting in additional delays in getting inbound containers to customers).
  • High number of vessels at anchor unable to berth, currently 63 vessels at outer anchorage. (high risk of vessels bypassing or omitting of the Durban call).
  • High terminal congestion and limited booking slots being granted for the collection of discharged containers (expect additional delays).
  • Increased risk of container demurrage and detention costs being incurred.

 

Summary of delays

  • Pier 1 : 6-7 days – Poor STS and RTG reliability and availability. Recovery expected in 3-4 weeks.
  • Pier 2 : 19-20 days – STS Breakdown and straddle carriers reliability and availability remains the key challenge to productivity. Recovery estimated in 8-12 weeks.
  • Durban Point : 3 days

 

CAPE TOWN

The Cape Town port has shown signs of slight improvement since our last update. Port berthing delays continues to be experienced. The port has reported windy weather during the week. High volumes of cargo and traffic experienced at Cape Town terminals.

  • CTCT : 3-4 days – Improving productivity has reduced waiting time. Recovery expected in 1 week.
  • MPT : 1-3 days

 

PORT ELIZABETH

Port berthing delays continues to be experienced and has increased from week 42. The port has reported windy weather during the week.

  • PECT : 2-3 days – STS Crane 3 maintenance continues. Recovery expected in 1-2 weeks.
  • NCT : 6-7 days – 3 berth operation implemented. Recovery expected in 2 weeks.

 

AFRICA & INDIAN OCEAN ISLANDS    

MAURITIUS: Berthing delays of 2 days experienced at Port Louis.

ANGOLA: Berthing delays of 7 days experienced at Luanda port. Congestion experienced at the port.

GHANA: Berthing delays of 2 days experienced at Tema port.

NIGERIA: Berthing delays of 4 days experienced at Apapa port.

TANZANIA: Berthing delays of 9 days experienced at Dar es Salaam port. Slight reduced draft at berths 8-11 (10m)

KENYA: Berthing delay of 1 day experienced at Mombasa port.

MOZAMBIQUE: Berthing delay of 1 day experienced at Maputo port.

NAMIBIA: Berthing delays of 3 days experienced at Walvis Bay port.

 

NORTH AMERICA    

USA

Some offices in the USA will be closed on the 23rd and 24th of November 2023 in observance of the upcoming Thanksgiving holiday.

Terminals Updates:

  • New York/New Jersey – Vessel waiting time is up to 1 day.
  • Norfolk – Vessel waiting time is up to 2 days. Ultra Large Container Vessels (ULCV) berth 1, will be out of service from midnight November 17 to midnight November 18 due to fender repairs and paving work.
  • Savannah – Vessel waiting time is up to 6 days. Two new cranes are currently being commissioned on berth 2, while four of the oldest cranes on the same berth are being demolished. As a result, berth 2’s capacity to handle vessels will be limited for several months.
  • Charleston – Vessel waiting time is up to 1 day.
  • Miami/Port Everglades – Vessel waiting time is up to 3 days.
  • Houston – Vessel waiting time is up to 2 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 4 days.
  • Seattle – Vessel waiting time is up to 4 days. Terminal 18 will be closed on November 23, 2023 and Husky Terminal will be closed on November 23 and 24, 2023.
  • Washington United Terminal will be closed on November 23, 2023.
  • Oakland – Vessel waiting time is up to 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.

 

Equipment Availability:

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

 

CANADA

Montreal: Berthing delays of 4 days experienced at this port. Bad weather on the North Atlantic is impacting vessel schedules through Montreal. Once alongside, there are no issues with labour availability and productivity is good.

Toronto: Berthing delays of 5 days experienced at this port.

Vancouver: Berthing delays of 4 days experienced at this port.

 

LATIN AMERICA    

BRAZIL: Berthing delays of 2 days experienced at Santos port.

PANAMA: The lower-than-usual water levels in the Gatun Lake are causing severe draft restrictions on vessels transiting the Panama Canal. This has caused a backlog of traffic waiting to pass through.

 

NORTH WEST CONTINENT, UNITED KINGDOM, MEDITERRANEAN    

BELGIUM: Berthing delays of 3 days experienced at Antwerp port.

GERMANY (Hamburg):

  • Berthing delays of 3 days experienced at Hamburg port and 4 days at Bremerhaven port.
  • Container Terminal Burchardkai (CTB): Berth 1+2 still closed for operations due to construction site for AGV operations berth only usable as layby. Construction will continue until December.

 

UNITED KINGDOM: Berthing delay of 1 day experienced at London Gateway port. Terminal will receive additional yard cranes for their ongoing expansion. Consequently, the berth capacity will be shortly reduced over the next week leading to operational challenges for simultaneous vessel arrivals.

SPAIN: Berthing delays of 2 days experienced at Barcelona port.

ITALY:

  • Berthing delays of 2 days experienced at La Spezia port and no delays at Genova port.
  • Weather-related Delays at North Tyrrhenian Ports: recent severe weather conditions, have impacted operations at North Tyrrhenian ports (Genoa, La Spezia, Leghorn, Civitavecchia, and Salerno). Terminal operational stops, continuous stop-and-go scenarios, and manoeuvring delays have been experienced. Vessel delays expected.

 

NETHERLANDS: Berthing delays of 2 days experienced at Rotterdam port. Seasonal winds are leading to operational challenges and slight delays.

FRANCE:

  • Berthing delays of 1 day experienced at Le Havre and 2 days Fos-sur-Mer port.
  • National strike expected on 23/11 in France. Local dockers union so far did not confirm participation.

 

TURKEY: Berthing delay of 1 day experienced at Istanbul port.

 

INDIAN SUB-CONTINENT & MIDDLE EAST    

INDIA:

  • Berthing delay of 1 day experienced at Nhava Sheva, Mundra and Chennai ports.
  • Some offices were closed from 13th to 15th November 2023 due to Diwali/Deepavali celebrations taking place in the country.

 

SRI LANKA:

  • Berthing delay of 1 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. We have also seen an increased number of carriers changing routings and introducing additional port calls and transhipments to their vessel schedules.

 

HONG KONG: Berthing delays of 1 day experienced at this port.

TAIWAN: Berthing delay of 1 day experienced at Kaohsiung port.

NANSHA: No berthing delays experienced at this port.

SHANGHAI / NINGBO: Berthing delays of 1 day experienced at Shanghai port and 2 days at Ningbo port.

QINGDAO: Berthing delays of 2 days experienced at this port.

XIAMEN: Berthing delay of 1 day experienced at this port.

SHEKOU / YANTIAN: Berthing delay of 1 day experienced at Shekou and Yantian ports.

XINGANG: Berthing delays of 3 days experienced at this port.

KOREA: Berthing delay of 1 day experienced at Busan port.

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

MALAYSIA: Berthing delay of 1 day experienced at Port Kelang.

THAILAND: Berthing delay of 1 day experienced at Bangkok port.

SINGAPORE:

  • Berthing delay of 1 day being experienced.
  • No delays experienced for transshipment cargo, only vessel scheduling delays experienced. Delays are expected FCL containers transshipping in Singapore. Expected delays are between 2-3 weeks.

 

NEWS ARTICLES    

Urgent intervention necessary at South Africa’s ports

Date: 14th November 2023

Although it’s commendable that the government of Cyril Ramaphosa is looking at long-term supply chain alleviation strategies through its National Logistics Crisis Committee (NLCC), it has become clear that immediate intervention is now necessary.

Commenting on yet another line implementing surcharges because of waiting time at the Port of Durban, 4PL Group’s Kevin Delport has said: “We are indeed in a logistics crisis, which must be addressed as soon as possible. “Not only are we shipping the same containerised volumes as during 2009, but we are 25% less productive than that time, which is also deeply concerning.”

Speaking after Hapag-Lloyd became the latest carrier to institute penalty fees for delays experienced along the South African coastline after Maersk, MSC and CMA CGM led the way with surcharges, the key accounts executive has added his voice to mounting complaints of equipment failure, unproductive booking systems and low productivity.

Mike Walwyn, a director at the South African Institute of Freight Forwarders, has said the same on various occasions, that the country’s ports have lost the resilience and resourcefulness for which it used to be known.

This morning Freight News correspondent in Durban, Lyse Comins, said the line of vessels at outer anchorage stretches all the way to Umhlanga, almost 20 kilometres away along the North Coast.

When Hapag-Lloyd announced that it would implement surcharges of $200 and $400 for TEUs and FEUs, Delport commented that about 70 vessels were stuck outside the port because of a waiting period of 18 to 20 days. Once berthed, it takes a further six to eight days for loads to be discharged. “However, this could increase due to delays in truck booking systems that could add another two-day delay,” Delport said.

Up the coast to the west, matters aren’t much better, with a waiting time of up to ten days before vessels berth at Coega’s Port of Ngqura. Here, too, there are further delays because of inefficient container booking systems, Delport said.

Turning to Cape Town, he said the port is experiencing high congestion. “Thirteen vessels are currently anchored with delays ranging between 12 to 14 days. “High wind, bad weather and equipment failure have also led to delays and possible omissions.”

An industry thought leader, speaking to Freight News on condition of anonymity, said: “The ports are squeezing the life out of traders in South Africa. “Delays are mounting and small- to medium-size shippers are backed into corners by costs they incur because of Transnet’s ineptitude.

Transnet Port Terminals has apparently said it’s aware of berthing delays and that it’s trying to find “amicable solutions” along with private sector stakeholders. [1]

 

Cape Town loses Maersk/CMA CGM call as carriers battle port delays

Date: 14th November 2023

After being hit with a series of port congestion surcharges this month, South African shippers and forwarders this week lost another direct call at Cape Town, as carriers continue to struggle to maintain schedules due to extended waiting times at the nation’s ports.

Maersk told customers today it was reorganising its Asia-West/South Africa network with a rejigged FEW6 service between Northern China and south-west Africa with two calls at Cape Town dropped.

“The updated FEW6 service will focus on the main south-west African ports, with a new call to Kribi. A significant change to this service will be the delinking of Cape Town coverage to enable quicker transit times of up to seven days between the south-west African ports and Asian ports,” said the carrier.

“With the removal of Cape Town from the FEW6, a brand-new service, the Cape Town Express, will be launched,” added Maersk. “The new service caters for consistent cargo movement between Port Louis and Cape Town. In Port Louis, there will be connectivity from and to Asia using the Safari  service.”

The Safari service is also a joint operation with CMA CGM and Cosco, and will have an updated port rotation of Shanghai-Ningbo-Shekou-Tanjung Pelepas-Port Louis-Durban-Port Louis-Tanjung Pelepas.

Mike Walwyn, director of maritime affairs at the Southern African Association of Freight Forwarders (SAAFF), told The Loadstar the new service structure could hit some of South Africa’s critical export industries. “The point is that these new schedules have been introduced to allow the carriers to maintain their global schedule integrity. By using efficient ports like Port Louis as hubs, they can tranship South African cargo using feeder vessels and thereby not interfering with the schedules of their mainline vessels.

In response to the crisis engulfing South Africa’s state-owned port and rail freight operator Transnet, the government has set up the National Logistics Crisis Committee, of which SAAFF is a member. “You will appreciate that our industry and others are involved in urgent and critical negotiations with government in an attempt to rectify the situation and restore our ports to their former productivity levels, but as you will know this will not happen overnight,” Mr Walwyn explained. [2]

 

US imports slow ahead of festive period:

Date: 15th November 2023

Inbound cargo volumes at the United States’ major container ports are expected to slow during the remainder of 2023 as most festive season goods have already been imported. This is according to the latest Global Port Tracker report released by the National Retail Federation and Hackett Associates.

“Retailers expect record-setting sales during the holiday sales season this year, and they have their shelves stocked to meet demand, whether it’s in stores or at distribution centres, to fulfil online orders,” said NRF Vice President for Supply Chain and Customs Policy, Jonathan Gold.

“Port, railroad and delivery service labour contract issues that caused worries earlier in the year are behind us, and the supply chain is running smoothly. Shoppers should have no trouble finding what they want this year.”

NRF has forecast record holiday sales and growth between 3% and 4% over last year, in line with pre-pandemic holiday growth rates. And the expected total of between $957.3 billion and $966.6 billion would easily top the record of $929.5 billion set last year.

US consumers stand out in the global economy as they continue to benefit from job and wage growth and are still able to dip into savings accumulated during the pandemic,” said Hackett. “While US consumers are doing well, a global recession in cargo trade could potentially affect the supply chain. [3]

 

Nationwide protests add to Panama woes:

Date: 16th November 2023

It’s not just drought in Panama that is giving supply chain planners pause for reflection, the Central American nation is also reeling from the largest protests in the western hemisphere, action that has affected rail, roads and ports over the past month.

Protests that began over a mining contract with a Canadian company have rocked Panama for weeks, with key highways blocked, and a port choked with fishing boats.

In October, First Quantum Minerals signed a 20-year contract to work Cobre Panama, the largestopen pit copper mine in Central America. Since then, protests have escalated to an anti-government movement with many strikes paralysing services.

A dozen small boats have been anchoring for weeks in the Panamanian Caribbean to prevent any ship from accessing the port. The widescale protests have even seen a cruiseship, Carnival Conquest, decide to ditch a call at Colón this month over security fears.

Today there are a total of 130 ships waiting at both ends of the waterway to transit, 31% higher than the average of the past seven years since the canal was expanded. [4]

 

Carriers at a critical juncture as spot market flashes red signals again:

Date: 17th November 2023

After recording gains across the board last week, the container spot market indices are back to flashing red for the main east-west tradelanes.

It is confirmation that ocean carrier 1 November FAK (freight all kinds) GRIs (general rate increases), from Asia to Europe in particular, have run out of steam and only achieved a small percentage of the ask. And this also explains why carriers have been obliged to make a final re-set attempt to push up spot rates on the route before the year closes by rolling out fresh, but identical, GRIs for 1 December. Drewry’s WCI Asia-North Europe component slipped 4% this week, for an average of $1,227 per 40ft, and is 43% lower than the same week of last year.

Earlier in the week, the Ningbo Containerized Freight Index (NCFI) commentary flagged up the declining trend, reporting prices to North Europe and the Mediterranean had “fallen sharply after being briefly pushed up”.

On the transatlantic, spot rates were flat this week, with the XSI average at $1,293 per 40ft – although these rates are some 80% lower than a year ago and remain well below carrier costs. [5]

 

Drewry: 53 Cancelled Sailings Out of a Total of 650

Date: 8th November 2023

Across the major East-West headhaul trades: Transpacific, Transatlantic and Asia-North Europe & Med, 53 cancelled sailings have been announced between weeks 46 (13 Nov-19 Nov) and week 50 (11 Dec-17 Dec), out of a total of 650 scheduled sailings, representing 8% cancellation rate.

During this period, 42% of the blank sailings will occur on the Transpacific Eastbound, 42% on Asia-North Europe and Med, and 17% on the Transatlantic Westbound trade.

Over the next five weeks, OCEAN Alliance have announced 22 cancellations, followed by THE Alliance and 2M with 7 and 4 cancellations, respectively. During the same period, 20 blank sailings have been implemented in non-Alliance services.

As can be seen above, we are seeing a modest improvement in carrier service reliability: on average 92% of the ships are expected to sail as scheduled, over the next five weeks with the exception of 2M Alliance who hits 97% during the same period. [6]

 

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

  1. https://www.freightnews.co.za/article/urgent-intervention-necessary-south-africas-ports
  2. https://theloadstar.com/cape-town-loses-maersk-cma-cgm-call-as-carriers-battle-port-delays/
  3. https://www.freightnews.co.za/article/us-imports-slow-ahead-festive-season
  4. https://splash247.com/nationwide-protests-add-to-panama-woes/
  5. https://theloadstar.com/carriers-at-a-critical-juncture-as-spot-market-flashes-red-signals-again/
  6. https://www.hellenicshippingnews.com/drewry-53-cancelled-sailings-out-of-a-total-of-650/

 

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

Linda & The Inter-Sped Team