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Freight & Logistics Update – 23rd May 2024

Freight & Logistics Update – 23rd May 2024

Good Day Clients & Partners,

We hope its been an excellent start to the week! Below is the latest Freight & Logistics Update.  As always, the Inter-Sped team are ready to go the extra mile for You

Again there is increased pressure on supply chains in many regions – Swe have highlighted the sections dealing with these pressures in blue:

SOUTH AFRICA    

Berthing delays continue to be experienced across all ports in South Africa. Delays upwards of two weeks continues to be experienced at Durban ports Pier 2 terminal. We expect more blank sailings, port omissions, rollovers and changes to voyages being announced at short notice.

DURBAN

The port has experienced low wind speeds during the week.

  • Pier 1 : 5-7 days delay
  • Pier 2 : 19-20 days delay
  • Durban Point : 3 days delay

 

CAPE TOWN

The port has experienced low wind speeds during the week.

  • CTCT : 4-8 days delay
  • MPT : 1-2 days delay

 

PORT ELIZABETH

The port has experienced strong winds during the week.

  • PECT : 0-2 days delay
  • NCT : 1-3 days delay

 

ASIA PACIFIC (Including Oceania)    

Severe capacity constraints, erratic scheduling along with increased vessel roll overs & blank sailings out of many Asian ports has lead to a massive spike in demand and serious rate increases. Equipment shortages are now adding to the pressure.

HONG KONG

  • Berthing delay of 1 day experienced at this port.

 

KOREA

  • Berthing delays of 2 days experienced at Busan port.

 

MALAYSIA

  • Berthing delays of 2 days experienced at Port Kelang.

 

NANSHA

  • Berthing delay of 1 day experienced at this port.

 

QINGDAO

  • Berthing delay of 1 day experienced at this port.

 

SHANGHAI / NINGBO

  • Berthing delay of 1 day experienced at Ningbo and Shanghai ports.

 

SHEKOU / YANTIAN

  • Berthing delays of 3 days experienced at Shekou port and no delays at Yantian port.

 

XIAMEN

  • No berthing delays experienced at this port.

 

XINGANG

  • No berthing delays 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 delays of 2 days experienced at Kaohsiung port.

 

THAILAND

  • Berthing delays of 2 days experienced at Bangkok port.

 

VIETNAM

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

 

NORTH WEST CONTINENT, UNITED KINGDOM, MEDITERRANEAN    

Vessel schedule delays continue to impact the region, with  amended port rotations, port omissions & vessel changes & cascading rolled schedules all on the rise.

Key factors contributing to this include:

  • While carriers have substantially increased container shipping capacity on the Asia-Europe to counter the effects of the Red Sea Crisis – there is still an effective 10% capacity shortage in comparison to last year.
  • Western Mediterranean Transhipment ports are severely congested due to the new routings the carries have had to introduce on their Asia-Europe traffic.

 

BELGIUM

  • Berthing delays of 2 days experienced at Antwerp port. PSA 913: Slight reduction in berth capacity with ongoing construction works which will last for two weeks.

 

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 4 days experienced at Hamburg port and 1 day at Bremerhaven port. CTB: One berth closed for gantry crane decommissioning. Terminal implemented upgrade to Terminal Operating System with slight impact to productivity.

 

ITALY

  • Berthing delays of 3 days experienced at Genova and La Spezia ports.

 

NETHERLANDS

  • Berthing delays of 3 days experienced at Rotterdam port.

 

SPAIN

  • Berthing delays of 6 days experienced at Barcelona port. Train service between Bilbao and Valencia will be interrupted due to maintenance works from May 15 to 20, 2024. This interruption affects both import and export services.

 

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 2 days experienced at London Gateway port. Commissioning of recently delivered new Gantry cranes in progress and will be completed this week.

 

INDIAN SUB-CONTINENT & MIDDLE EAST    

Capacity constraints are being experienced on services out of Indian Sub-Continent. This may lead to different transit times being achieved compared to what has been published.

INDIA

  • Berthing delay of 1 day experienced at Nhava Sheva and Chennai ports.

 

UNITED ARAB EMIRATES

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

 

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 3 days experienced at Mombasa port.

 

MAURITIUS

  • Berthing delay of 1 day 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 12 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 3 days experienced at this port.

Toronto

  • Berthing delays of 6 days experienced at this port.

Vancouver

  • Berthing delay of 1 day experienced at this port. Negotiations between the Teamsters Canada Rail Conference and both Canadian Class 1 railways have resulted with the assistance of federal mediators. Until a decision is rendered, there is minimal risk of a work stoppage.

 

USA

Terminals Updates:

  • New York/New Jersey – Vessel waiting time is up to 3 days. APMT will not have a gate open on Saturdays.
  • 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 4 days. Cargo Spillage at Wando Welch Terminal reduced berth space to 1 position for several days, increasing berth waiting time.
  • Savannah – Vessel waiting time is up to 5 days.
  • Miami/Port Everglades – Vessel waiting time is up to 1 day.
  • Houston – Vessel waiting time is up to 3 days.
  • Los Angeles/Long Beach – Vessel waiting time is up to 3 days.
  • Seattle – Vessel waiting time is up to 2 days. Terminal 18 will be closed on May 17, 24 and 27, 2024. Husky Terminal will have a Saturday gate on May 18, 2024, and hoot gate (03:00 hrs. – 07:00 hrs.) on May 21 and May 23, 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 delay of 1 day experienced at Santos port.

 

MEXICO

  • Manzanillo port working partially, Heavy yard utilization – Low productivity at yard and vessel operation.

 

NEWS ARTICLES    

South African Ports Boost Container and Bulk Volumes:
17/05/2024

Transnet Port Terminals (TPT) has seen a significant increase in the volume of goods handled in the first six weeks of the 2024/2025 financial year. Container volumes rose by 10%, while bulk and breakbulk volumes increased by 5% and 17%, respectively. This improvement is credited to TPT staff’s dedication to the group’s turnaround strategy. However, automotive volumes dropped by 3% due to importers’ high stock levels and lower car sales caused by slow economic growth. TPT CEO Jabu Mdaki noted that port performance is recovering compared to the previous financial year ending March 31, 2023. Despite equipment shortfalls, TPT is committed to moving more volumes and has launched an equipment acquisition drive with a capital investment of R3.9 billion this financial year.

TPT is enhancing the availability and reliability of its existing fleet through a 24-hour maintenance regime, supported by original equipment manufacturers providing technical support and critical spares. Mdaki emphasized the importance of collaboration with customers to boost operational efficiency. To support this, customers are helping with equipment supply and terminal partnership programs. Additionally, TPT’s container terminals have started the citrus season with over 200 extra cargo coordinators and port workers, and increased capacity across terminals. Mdaki stressed the need for the industry to utilize the full 24-hour operational window at terminals for a successful season. Source

 

Canadian Government Invokes ‘Red Tape Rule’ to Prevent Rail Strike:
13/05/2024

The Canadian government has prevented a planned rail strike by invoking a rule that could classify certain rail services as essential. The Teamsters Canada Rail Conference (TCRC) had called for a strike against Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) after five months of unsuccessful negotiations, set to begin on May 22. However, Minister of Labour Seamus O’Regan requested the Canadian Industrial Relations Board (CIRB) to determine if any rail services were essential for public health and safety, halting the strike process. The CIRB set a deadline for submissions on the matter for May 21, which effectively froze the strike action while the investigation is underway.

The TCRC expressed frustration with the decision, arguing it undermines the negotiation process and threatens their rights. They pointed out that agreements filed with the CIRB indicated no essential services were required during a strike. Despite the strike’s postponement, negotiations are continuing as scheduled in Montreal, with discussions between TCRC and CN beginning today and talks with CPKC set for Friday. CN emphasized the importance of resolving the uncertainty around the labor disruption to ensure the delivery of essential goods across Canada. The company remains committed to reaching a negotiated agreement with the union. Source

 

Panama Canal Slowly Returning to Normal Operations:
17/05/2024

Rising water levels in the Panama Canal are bringing hopes of a return to normal operations for container shipping after over a year of drought-related restrictions. Starting Thursday, the Panama Canal Authority increased the daily number of ships allowed to transit from 24 to 31. While this increase offers limited relief for container shipping, significant changes are expected on June 1, with an additional transit slot for larger Neopanamax ships, raising the daily total to 32. Additionally, draft limits for Neopanamax ships will increase from 44 feet to 45 feet on June 15, moving closer to the normal limit of 50 feet.

Despite these improvements, experts like Peter Sand, Chief Analyst at Xeneta, caution that the canal is far from returning to pre-restriction levels. The water shortage has significantly impacted scheduling reliability and spot rates, and recovery will be slow and dependent on unpredictable rainfall. Businesses should be prepared for ongoing disruptions, as the effects of the drought on the Panama Canal will likely be felt for years rather than months.Source

 

Flooding Slows Cargo Movement at Brazil’s Rio Grande Port:
17/05/2024

Heavy rains and flooding have significantly disrupted cargo shipments at Brazil’s Rio Grande port. The port authority stated that the full impact will be assessed at the end of the month. Despite the bad weather, which has particularly affected soy exports and fertilizer imports, all terminals remain operational with a new draft of 12.80 meters (41.99 ft) set for vessels at three grain terminals. The flooding has not only affected the port but has also hampered meat production and the harvesting of rice, corn, and soybeans in Rio Grande do Sul, a major agricultural region in southern Brazil. Emergency services report that the floods have submerged entire towns, killed at least 154 people, displaced half a million, and damaged food silos and critical infrastructure.

Grain traders in the area, including Bunge, have also been impacted. Bunge temporarily halted operations at its Rio Grande soy crushing facility and port terminal due to forecasted rains and flooding. As of Friday, the facilities remain closed and will only resume once it is safe. The port’s location, influenced by tropical and polar currents, makes it susceptible to extreme weather events, exacerbated by climate change. The port authority continues to manage operations amidst these challenges, ensuring that terminals stay functional despite the adverse conditions.Source

 

European Hauliers Squeezed as Rates Fall and Costs Keep Rising:
15/05/2024

The European road freight market is struggling as both spot and contract rates fall due to weak demand and high operating costs. In Q1 2024, the European road freight spot rate index dropped 8.2 points year-on-year, primarily due to low demand caused by inflation suppressing consumer buying habits. However, a recent 33-month low in the European inflation rate has slightly boosted confidence and could lead to higher demand and rate normalization. Despite the decline, the high costs of vehicle maintenance, insurance, and tyres keep contract prices elevated. Upply CEO Thomas Larrieu noted the difficult economic environment but expects gradual improvement throughout the year, with some routes already seeing price increases in April.

Ti data forecasts a modest growth of 1.1% in road freight revenue for the region in 2024, with the IRU expecting EU road transport volume growth to improve to 0.4% year-on-year. Ti’s Michael Clover anticipates rates will pick up as import volumes recover and supply chain bottlenecks reemerge. However, rising costs from new CO2 tolls, which increased by 40% in Hungary and 83% in Germany, add pressure on hauliers. The EC’s recent announcement for a 45% reduction in emissions by 2030 for new HGVs has been criticized by the IRU as overly ambitious, potentially disadvantaging SMEs. IRU’s Vincent Erard stressed the need for alternative zero-emission vehicles and incentives to support operators, especially SMEs, in achieving decarbonization goals.Source

 

More EU ‘Greener Shipping’ Regulations Loom, with ‘Significant’ Penalties:
16/05/2024

Shipping companies must prepare for the upcoming FuelEU Maritime regulation, part of the EU’s Fit for 55 package, aimed at increasing the use of renewable and low-carbon fuels in the shipping sector. The regulation requires ships over 5,000 gross tonnes to reduce their energy use annually compared to a 2020 baseline, starting with a 2% reduction next year and reaching 80% by 2050. Albrecht Grell, co-MD of OceanScore, emphasized that penalties for non-compliance will be based on the document of compliance rather than the ‘polluter pays’ principle. The penalties will depend on factors such as fuel mix and trading patterns, and are expected to increase over time.

The deadline for shipping companies to submit a monitoring plan tracking fuel type and consumption for each EU voyage is August 31. Friederike Hesse, co-founder and MD of zero44, highlighted that green fuel options will be limited in 2025, making strategies like pooling penalties essential. This new regulation, along with the EU Emissions Trading System (ETS) that taxes carbon emissions, will push the industry to invest in low-GHG fuels and zero-emission ships. By 2026, when the EU ETS is fully phased in, non-compliance will result in severe penalties, while those who comply will benefit from the new regulations. Hesse explained that these regulations work together to enforce the transition to greener shipping practices. Source

 

CMA CGM Switches Box Ship Call to Chennai as Ennore Struggles:
16/05/2024

CMA CGM has shifted the APL Boston’s scheduled call from Adani Ennore Container Terminal (AECT) to Chennai Container Terminal due to disruptions at Ennore. The ship, part of the CMA/MSC’s NEWMO service, couldn’t secure a berth at Ennore after a two-day wait. This move aims to load export containers already at Chennai. The change was necessary to avoid further delays as Ennore faced power outages and capacity issues from unscheduled transshipment ship calls from MSC. This congestion forced some vessels to switch calls to other ports, including Kattupalli Port. The NEWMO service, which started calling Ennore last year for faster turnarounds, includes stops at major ports such as London Gateway, Rotterdam, and Singapore.

Ennore handled 61,000 TEU in April, up from 49,000 TEU the previous year, while Chennai saw an increase to 135,000 TEU from 124,000 TEU. The APL Boston’s call marked a milestone for Chennai as it became the deepest-draught containership handled there, surpassing a record set by CMA CGM Mozart in 2017. Major Indian ports have experienced a significant increase in transshipment loads recently, with a combined movement of 53,000 TEU in April, up from 16,500 TEU the previous year. This increase is partly attributed to cargo diversions related to the Red Sea crisis. Source

 

Carriers Juggling Capacity and Port Congestion ‘Taking Us Back to the Dark Days’:
13/05/2024

Shipping companies are drastically cutting capacity in response to the Red Sea crisis, causing significant congestion in Europe for Asia-Mediterranean traffic. According to analysts at Xeneta, new transshipment networks aimed at mitigating Red Sea diversions are instead exacerbating the issue. The deployment of more smaller vessels has led to increased wait times. Major carriers like Cosco and Evergreen are shifting tonnage meant for Far East-North Europe routes to the Mediterranean, resulting in an 8% year-on-year capacity increase for Asia-Med, while Asia-North Europe capacity is down by 3.1%. This shift has made Western Mediterranean transshipment ports, such as Barcelona, busier than ever, with Barcelona seeing a 48% rise in transshipment TEU in Q1 2024 compared to the previous year. The added congestion has led to longer wait times, with Barcelona now experiencing wait times of 3.53 days.

The situation has drawn comparisons to the pandemic, with industry observers noting that the current congestion and high demand are reminiscent of those “dark days.” Rates from Singapore to Barcelona have been rising again, increasing by 10% in early May. Despite some claims that capacity remains sufficient, the redeployment of large vessels built for specific trades like Asia-Europe and the slower speeds of current shipping practices have contributed to the congestion. Analysts warn that port congestion is reducing the effective available vessel capacity, mirroring issues seen during the pandemic. This has led to a challenging period expected to continue into Q3, despite the potential for new capacity entering the market. Source

 

Widespread Support for Carbon Tax:
13/05/2024

A global carbon tax on shipping emissions is expected to be implemented soon, with Swedish energy technology company Climeon predicting an economic pricing mechanism by next year. This tax would require shipping companies to pay a fee per tonne of carbon emitted from burning fuel. While there is strong industry support, with 47 countries backing the initiative, Brazil and China oppose it due to concerns about its impact on emerging economies. Countries have until September to decide on the emissions price or a new fuel standard, which is seen as essential to achieving the International Maritime Organization’s (IMO) ambitious targets and preventing market fragmentation.

The proposed carbon tax could significantly affect carriers, with one suggestion being a fee of $150 per tonne of CO2. This cost might be passed on to customers, impacting the global economy since over 90% of traded goods are transported by sea. Impact assessments are expected by Autumn 2024, and the tax could be implemented as early as 2025. A global carbon tax aims to help the shipping industry achieve key net-zero goals, including a 40% reduction in CO2 emissions per transport work by 2030 and net-zero GHG emissions by 2050. The IMO’s strategy targets a 40% reduction in carbon intensity by 2030 and increased use of zero or near-zero GHG emission technologies and fuels. Source

 

Q1 deliveries of TEU container ship capacity reach record high:

13/05/2024

In the first four months of 2024, deliveries of TEU container ship capacity hit a record one million, as reported by Bimco. This follows the record-setting delivery of 2.3 million TEUs in 2023, surpassing the former high by 37%. With only 19 smaller ships retired through ship recycling, the fleet expanded by nearly one million TEUs, a 3.5% increase compared to the beginning of the year, contributing to last year’s fleet growth of 8.2%. The recent need for about 10% more capacity due to ships rerouting via the Cape of Good Hope following Red Sea attacks has highlighted potential oversupply issues once normal routes resume, especially considering that between 2019 and 2023, the fleet grew by 21% while container volumes increased by only 4%.

Despite the decline in the order book due to record deliveries, which now stands at 6.1 million TEUs, 21% of the current fleet size, 1.8 million TEUs have been contracted during 2023 and 2024. This year, delivery volumes are on target to exceed three million TEUs, a 30% increase from last year’s record, while in 2025, deliveries are expected to reach just below two million TEUs. Although deliveries in 2024 are projected to reach 11% of fleet capacity at the beginning of the year, less than the 14% seen in 2008, they are still contributing to maintaining global container trade momentum rather than causing significant oversupply issues as initially expected. Source

 

Vessel juggling leaves ocean alliances short of Asia-Europe capacity:

15/05/2024

Recent data from Alphaliner reveals that despite substantial increases in container shipping capacity, Asia-Europe services are still facing a shortage of ships, amounting to nearly 10%. This shortfall is attributed to the impact of the Red Sea crisis and vessel diversions around the Cape of Good Hope. The number of ships required for weekly service between Asia and Europe has risen to 376, compared to 321 needed last year for the same number of services. However, the three major alliances have only deployed 340 ships, leaving a significant gap, particularly in trades to Northern Europe and the Mediterranean, requiring approximately 509,400 additional slots to ensure weekly sailings for all alliance loops.

Alphaliner’s analysis indicates that Ocean Alliance carriers, including CMA CGM, Cosco, Evergreen, and OOCL, face the greatest challenge in finding sufficient ships, as they deploy 120 vessels but require an additional 20 to meet capacity demands. A notable consequence of rerouting ships via the Cape of Good Hope is the shift in capacity within the Ocean Alliance fleet, with megamax vessels being relocated from North European loops to joint Asia-Mediterranean services. This situation has created challenges, especially in maintaining services to the eastern Mediterranean, with Piraeus being a vital regional hub. Conversely, the 2M and THE Alliance appear to have a more balanced vessel deployment, with MSC, Maersk, and THEA requiring eight vessels each to complete their joint services. Source

 

East-west freight rates continue rise; even transatlantic edges up:

17/05/2024

Recent data shows that container spot rates on major east-west shipping routes continue to surge, with significant week-on-week increases recorded. The Drewry’s World Container Index (WCI) reported double-digit gains on the Asia-Europe and Asia-North America routes, with Shanghai-Rotterdam, Shanghai-Los Angeles, and Shanghai-New York legs reaching $4,172, $4,476, and $5,717 per 40ft, respectively. This surge is attributed to rising demand, tight capacity, and the need to reposition empty containers, according to analysts. Additionally, the Shanghai-Genoa route saw an 11% increase, reaching $4,776 per 40ft, while Freightos’ FBX Asia-Mediterranean leg recorded a 17% increase, climbing to $5,179 per 40ft. The spike in rates is fueled by early month General Rate Increases (GRIs) and surcharges, coupled with increased demand and congestion in key regions like the West Mediterranean and South Asia due to Red Sea diversions.

Moreover, European forwarders anticipate further rate hikes, with projections reaching $5,000 to $5,400 per 40ft for North Europe and Mediterranean shipments by the month’s end. Carriers are also announcing higher rates, with CMA CGM introducing an Asia-North Europe FAK rate of $6,000 per 40ft effective from June 1. Even the transatlantic route, previously stagnant, witnessed improvement, with the Rotterdam-New York leg rising 2% to $2,209 per 40ft. Hapag-Lloyd’s CEO suggested that this rate increase in the transatlantic trade indicates a longer-lasting market correction, as trends in the Atlantic typically follow those in other markets a few months later. He noted tight capacity and strong demand as factors contributing to the rate recovery in the transatlantic trade. 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