Freight & Logistics Update 9 October 2024

SOUTH AFRICA

Air Freight: On the import side, peak season is in full swing with demand for space on the increase daily – as always we encourage all our customers & partners to start prebooking shipments as far in advance as possible. Exports – Increased demand being experienced across all regions leading to capacity constraints all round.

Sea Freight: Strong winds continued to affect all the main South African ports.

South Africa to NWC/UK/West Mediterranean – MSC Vessels omitting Coega Port

MSC no longer accept to co-load any type of lithium batteries with other dangerous cargo in the same container to safeguard public/crew/equipment and vessels.

The MSC Antonia, a Liberian-flagged container ship, lost 46 containers and damaged 305 others during severe weather off the South African coast on August 28, 2024. The vessel was en route from Colombo to New York. South African Maritime Safety Authority and Nelson Mandela Bay Municipality are conducting mop-up operations and urging caution to maritime operators and the public. The ship is now in Cape Town for assessment and repairs, while local authorities continue to collect debris along the coastline (already 2 tonnes cleared). The public is advised to report any sightings of containers or debris and to avoid handling any wreckage for safety reasons.

DURBAN

The port has experienced windy weather during the week.

Pier 1 : 4-9 days delay
Pier 2 : 7-15 days delay
Durban Point : 3 days delay

CAPE TOWN

The port has experienced windy weather during the week.

CTCT : 1-2 days delay
MPT : 0-1 day delay

PORT ELIZABETH

The port has experienced strong wind speeds during the week.

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

AFRICA & INDIAN OCEAN ISLANDS

East African ports are experiencing congestion however no severe impact noted. We will continue to monitor the situation and provide updates accordingly.

Sea Freight: East African services ex-South Africa remain under pressure as MSC no longer sailing directly from Durban, resulting in longer transit times & Messina only sail once monthly, Hapag Lloyd offers service however with a longer transit routing via Jebel Ali.

Mozambique has listed new information required for imports, including a compulsory identifier number called a NUIT. We will update you on an individual shipment level.

The East African ports of Dar-Es-Salaam and Djibouti both experiencing increased port congestion.

Tema Port is experiencing port congestion which affects many other West African destinations that tranship through this port.

Air Freight: Increased demand for exports is leading to increased rate pressure and space shortages – pre-booking is advised.

Air France is no longer servicing: Ougadougou, Burkina Faso, Bamako, N’djamena, Niamey.

ANGOLA

Berthing delays of 3 days experienced at Luanda port.

GHANA

Berthing delay of 1 day experienced at Tema port.

IVORY COAST

Berthing delays of 2 days experienced at Abidjan port.

KENYA

Berthing delay of 1 day experienced at Mombasa port.

MAURITIUS

Berthing delays of 5 days experienced at Port Louis.

MOZAMBIQUE

Berthing delays of 4 days experienced at Maputo port.

NAMIBIA

Berthing delays of 6 days experienced at Walvis Bay port.

NIGERIA

Berthing delay of 1 day experienced at Apapa port.

SENEGAL

Berthing delay of 1 day experienced at Dakar port.

TANZANIA

Berthing delays of 8 days experienced at Dar es Salaam port. High levels of congestion continue to be experienced at this port.

NORTH AMERICA

USA Strike: Kindly note that while the Strike has concluded, USA East Coast and Gulf port operational delays are expected to last for weeks. It’s possible that we will see an increase in Sea Freight rates (or related surcharges). Because of the delays on Sea Freight, there will be an increase in Sea to Air Conversions, which will further increase demand for space, driving up rates and result in increased congestion.

Hurricane Milton: Airlines and airports in Florida are preparing for Hurricane Milton, a major storm expected to bring damaging winds, intense storm surge and heavy rainfall as it approaches the state’s west coast. It will be the second major hurricane to hit Florida in weeks.

Multiple US airlines have added a series of embargo’s to their Florida cargo operations as they prepare for the arrival of hurricane Milton.

Hurricane Helene:

Airport & port closures along with more than 400 roads closures in western North Carolina, the state Department of Transportation said Saturday morning.

More than 3 million without power: The remnants of Helene continued to knock out power for several states across the eastern US on Saturday, with roughly 3.1 million customers left in the dark in areas like South Carolina, Georgia, North Carolina, Florida and Ohio, according to PowerOutage.us.

+ Helene disrupts travel and delivery services: Helene has caused numerous disruptions to travel and delivery services. Several Amtrak trains arriving or departing Florida and Georgia have been canceled, the company said. Delivery services were also impacted, with UPS announcing it has suspended service to Florida, North Carolina and Georgia because of the storm. FedEx likewise suspended or limited its service in five states. Water inundated countless roadways across the region, making them impassable. In North Carolina, 290 roads were closed throughout the state, and Gov. Roy Cooper said the state’s transportation department is shutting down even more roadways as severe flooding, landslides and washed-out roads pose serious threats to public safety.

Air Freight: The full extent of Hurricane Helene’s impact on air freight services remains to be seen. We will keep you posted with further updates on a regular basis.

BA are currently not accepting bookings into the USA , due to capacity constraints.

Sea Freight: As port workers near a strike at East and Gulf Coast ports, many importers and exporters are exploring alternative routes to minimize potential disruptions. However, Hurricane Helene’s impact on the Southeast is adding complications to these plans. We are closely monitoring the situation and will provide you with regular updates.

Vessel scheduling amendments are on the increase – impacting both import and export services to and from the USA – with many changes only being advised last moment.

The USA have seen their peak season start much earlier than usual in preparation for the potential strike and the bulk of the import volume has come in already for the year-end shopping holiday season.

CANADA

Montreal

Berthing delays of 6 days experienced at this port. Port workers at Montreal began a three-day strike on Monday, 30th September 2024. The strike ended early on Thursday, 3 rd October as scheduled. All Port of Montreal terminals are now open, and operations has resumed.

Toronto

Berthing delays of 10 days experienced at this port.

Vancouver

Berthing delays of 2 days experienced at this port.

USA

Terminals Updates:

New York/New Jersey – Vessel waiting time is up to 7 days.
Norfolk – Vessel waiting time is up to 3 days.
Charleston – Vessel waiting time is up to 7 days.
Savannah – Vessel waiting time is up to 6 days.
Miami/Port Everglades – Vessel waiting time is up to 4 days.
Houston – Vessel waiting time is up to 6 days.
Oakland – Vessel waiting time is up to 4 days.
Los Angeles/Long Beach – Vessel waiting time is up to 2 days.
Seattle – Vessel waiting time is up to 1 day. T18 will be closed on October 4 and 11, 2024.

LATIN AMERICA

Although cargo is moving and services are running relatively smoothly, The increase in volumes due to peak season is being felt and it is likely that we will see an increase in in cargo off-loads & schedule delays.

ARGENTINA

Berthing delays of 2 days experienced at Buenos Aires port.

BRAZIL

Berthing delays of 6 days experienced at Santos port.

MEXICO

Berthing delays of 3 days experienced at Altamira and Manzanillo ports and 4 days at Veracruz port.

NORTH WEST CONTINENT, UNITED KINGDOM, MEDITERRANEAN

Air Freight: Export services into Europe: there has been a surge in demand, we advise pre-booking where possible.

Import services from Europe: Increased demand and space constraints expected to increase, advise pre-booking where possible.

Sea Freight: Vessel schedule delays continue to impact the region Predictions are that peak season will start early in the EU as many importers & exporters aim to navigate the multiple disruptions faced by Sea Freight supply lines.

BELGIUM

Berthing delays of 4 days experienced at Antwerp port.

FRANCE

Berthing delays of 2 days experienced at Le Havre port.

GERMANY

Berthing delays of 5 days experienced at Hamburg port and 1 day at Bremerhaven port.

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 delay of 1 day experienced at Barcelona port.

SWEDEN

Berthing delay of 4 days experienced at Gothenburg port.

TURKEY

Berthing delays of 3 days experienced at Istanbul port.

UNITED KINGDOM

Berthing delays of 2 days experienced at London Gateway port. Possible disruptions expected caused by pilot boarding limitations.

INDIAN SUB-CONTINENT & MIDDLE EAST

India: The effects of the heavy inventory at Nhava Sheva’s APMT terminal that we have reported on in previous weeks is still being felt, this all as peak season volumes increase.

Sea Freight: Import services out of the Indian Sub-Continent remain under pressure with increased demand causing capacity constraints Nhava Sheva’s APMT terminal is also battling serious congestion caused by excessive container stock (exceeding 20,000 TEUs). Vehicles are now taking up to 18 hours to enter. This is now having a knock on effect on other terminal movements. Export services to the region are running relatively smoothly.

Air Freight: Export & import services are for the main part running very smoothly

However, in the Middle East we are seeing an increasing number of airlines cancel or suspend their services to Israel and/or Lebanon and some other neighbouring territories.

https://www.reuters.com/business/aerospace-defense/airlines-suspend-flights-middle-east-tensions-rise-2024-08-08/

INDIA

Berthing delays of 3 days experienced at Nhava Sheva port and 1 day at Chennai port.

UNITED ARAB EMIRATES

Berthing delays of 2 days experienced at Jebel Ali port.

LEBANON

Berthing delays of 6 days experienced at Beirut port. All services remain active amid the on-going situation in the Middle East.

ASIA PACIFIC (Including Oceania)

China’s Golden week holidays have ended. And while we expect most suppliers back at work, we now expect a huge surge in demand as exporters across the region push to get orders out in record time.

As always we encourage all our clients and partners to pre-book space as far in advance as possible.

Sea Freight: The port of Singapore remains heavily congested – This impacting services (both imports and exports) that are routed via Singapore. In a drive to avoid a fall in container rates, many shipping lines have blanked a number of export sailings from Asia – this prior to the Chinese national holiday in early October. The blank sailings will likely result in upward rate pressure.

Air Freight: Demand for space coming out of the Far East remains elevated but manageable with all service running smoothly. Export space into the Far East is also running very smoothly. Imports: Japan – large spike in demand leading to serious space constraints and backlogs.

HONG KONG

Berthing delay of 1 day experienced at this port.

KOREA

Berthing delay of 1 day experienced at Busan port.

MALAYSIA

Berthing delays of 2 days experienced at Port Kelang.

NANSHA

Berthing delays of 2 days experienced at this port.

QINGDAO

Berthing delays of 2 day experienced at this port.

SHANGHAI

Berthing delays of 4 days experienced at this port. Vessel bunching due to post Typhoon Bebinca and Pulasan effect.

NINGBO

Berthing delays of 6 days experienced at this port. vessel bunching due to post Typhoon Bebinca and Pulasan effect.

SHEKOU / YANTIAN

Berthing delays of 2 days experienced at Shekou port and no delays at Yantian port. Shekou experiencing delays due to port closure as a result of extreme weather conditions.

XIAMEN

Berthing delays of 2 days experienced at this port.

XINGANG

No berthing delays experienced at this port.

SINGAPORE

Berthing delay of 1 day being experienced at this port. FCL containers transshipping in Singapore have expected delays of 2 weeks.

TAIWAN

Berthing delays of 4 days experienced at Kaohsiung port. Due to the severe weather conditions experienced s a result of Typhoon Krathon, our partners offices was closed from the 2nd to 4th of October 2024.

THAILAND

No berthing delays experienced at this port.

VIETNAM

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

NEWS ARTICLES

US dockworkers embark on biggest strike since 1977

01/10/2024

A major dockworkers’ strike has begun at ports along the US Atlantic seaboard and Gulf of Mexico after negotiations failed between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX). The strike, involving 45,000 stevedore laborers and affecting about two dozen ports, began at midnight on October 1 after the ILA rejected a last-minute offer from USMX that included a 50% wage increase over six years and a pledge to maintain current automation limits. This is the largest strike of its kind since 1977, with operations ceasing at major ports from Boston to Houston, although the ILA has agreed to continue servicing military cargo and passenger cruise ships.

The economic impact of the strike could be substantial, with estimates suggesting that a one-week strike could cost the US economy nearly $4 billion and cause supply chain disruptions lasting through mid-November. If the strike extends to two weeks, the delays and supply chain dysfunctions could persist until January. Port operations have already been affected, with picket lines reported at the Port of Philadelphia, and the situation remains unresolved as the ILA is currently refusing the USMX’s request to extend the current contract while negotiations continue. Source

Hurricane Milton expected to make landfall in Florida

09/10/2024

Hurricane Milton has intensified to a catastrophic Category 5 storm and is approaching Florida’s west coast, expected to make landfall Wednesday night or early Thursday with maximum sustained winds of nearly 160 mph. The hurricane threatens densely populated areas including Tampa, Sarasota, and Fort Myers with damaging hurricane-force winds and a life-threatening storm surge that could reach up to 15 feet. This follows closely behind Hurricane Helene, marking an unusually intense period of hurricane activity in the Gulf of Mexico.

Scientists attribute the increased intensity of these hurricanes to exceptionally warm ocean temperatures in the Gulf of Mexico, which reached all-time highs this summer. A recent “marine heat wave” has provided additional fuel for these storms, enabling Hurricane Milton to rapidly intensify from a tropical storm to a Category 5 hurricane in about a day, making it the fifth most intense hurricane on record. While multiple factors contribute to hurricane formation, the unusually warm waters combined with favorable atmospheric conditions have created ideal circumstances for powerful storms to develop. Source

Shippers brace for extra costs as carriers invoke force majeure

03/10/2024

As US east and Gulf coast ports become inaccessible due to strikes, shipping carriers are invoking force majeure clauses in their contracts, protecting themselves from liability while leaving shippers to bear additional costs. Force majeure, which typically refers to unforeseen events preventing contract fulfillment, allows carriers to be excused from their obligations and potentially suspend carriage, store goods, or even abandon carriage to deliver goods at their discretion. Major carriers like ONE, CMA CGM, and APL have already enacted these provisions, which may also allow them to impose surcharges on shippers without offering refunds.

While shippers unable to fulfill minimum volume commitments might also be excused under force majeure, this offers little consolation as most shippers are trying to meet holiday season demands rather than struggling to fulfill volume requirements. The initiative to declare force majeure lies solely with the carriers, leaving shippers with limited recourse – their only option being to challenge decisions in court, a process that could take years. Industry experts, including James Hookham of the Global Shipper’s Forum, note that refunds are rarely seen in the container shipping industry, and this situation is unlikely to change despite the current circumstances. Source

US ports re-open as ILA and USMX extend master contract – and negotiations – to January

04/10/2024

The United States Maritime Alliance (USMX) and the International Longshoremen’s Association (ILA) have reached a tentative agreement on wages, ending the port strike with immediate effect. The current master contract has been extended until January 15, with reports suggesting ILA members will receive a 62% pay increase over six years. However, automation levels remain to be negotiated. As ports reopen, approximately 50 containerships anchored offshore will begin berthing, though congestion is expected to persist throughout the month. Major companies affected by the strike include Walmart with 837.2 TEU in ports and an average dwell time of over 10 days, followed by Kuehne + Nagel with 323 TEU.

The contract’s new January expiration date moves potential future disruptions to after the busy pre-Christmas season and places any challenges in the hands of the newly elected president. Savannah currently has the most containers still in port at 8,971 TEU, followed by New York with 3,901 and Houston with 2,401. Meanwhile, the Port of Montreal has also reopened after its 72-hour industrial action, with the Maritime Employers’ Association scheduled to meet with the union under mediation to work towards a lasting agreement that provides stability and facilitates the return of cargo to Montreal. Source

Typhoon Krathon Brings Taiwan to a Standstill

02/10/2024

Typhoon Krathon is approaching Taiwan with maximum sustained winds of 155 kilometers per hour, though it’s expected to weaken to 101 kilometers per hour before making landfall on Thursday morning between Tainan and Kaohsiung. The storm has prompted widespread closures across the island, including Taiwan’s $2.5 trillion stock market for a second consecutive day, and has led to the evacuation of over 9,000 people, with one death, two missing, and 70 injuries reported as of Wednesday afternoon.

The slow-moving typhoon has caused significant disruptions, with nearly 500 flights cancelled, 164 ship crossings suspended, and over 6,800 households without power. While Taiwan Semiconductor Manufacturing Co. has activated routine typhoon preparations, it doesn’t expect major operational impacts. The storm, which developed in the Philippines (where it’s known as Julian), has already caused four casualties there and prompted hundreds of evacuations due to flooding. Taiwanese authorities warn that some mountainous areas could receive up to 49 centimeters of rain, and at least 18 counties and cities are expected to suspend school and office operations for another day. Source

Blank sailings increase as lines apply rate correction

30/09/2024

Shipping lines are planning to blank-sail 53 additional scheduled sailings until mid-October to manage overcapacity, adding to the already announced 90 blank sailings out of 692 scheduled (a 13% cancellation rate). The majority of these cancellations affect the Transpacific Eastbound route (67%), followed by Asia-Europe/Med routes (21%) and the Transatlantic route (12%), with Ocean Alliance, THE Alliance, 2M Alliance, and non-alliance carriers all participating in the cancellations. Despite challenges including blank sailings, the Red Sea crisis, and potential US port strikes, ocean freight rates on Europe westbound and Transpacific Eastbound routes continue to decline, with the steepest drops of 15-27% observed on the US East Coast routes up to August.

US retail sales grew in August, with strong consumer spending on household essentials despite a slowing labor market, leading to a 0.45% month-on-month increase in total retail sales. Alvin Fuh, ocean freight vice president at Dimerco Express Group, noted that concerns about potential port strikes and rising tariffs have prompted cargo owners to accelerate shipments, resulting in a 2.1% increase in port handling volume to 2.37 million TEUs in August. However, handling volumes are projected to decline from September to December, though total port volume for 2024 could still reach 24.98 million TEUs, a 12% increase from 2023. Currently, space availability is improving on routes from Asia to the US East Coast and European base ports, while the US to Asia route remains tight with rising rates. Source

Gemini’s outdated hub-and spoke strategy will prove ‘ineffective’

30/09/2024

At the Busan International Port Conference, analysts expressed doubts about the effectiveness of Gemini Cooperation’s “hub and spoke” strategy. The Gemini alliance between Maersk Line and Hapag-Lloyd, set to begin in February 2025, plans to focus on transshipment through shuttle services rather than direct port calls, which may increase costs. Tan Hua Joo, Linerlytica’s chief analyst, pointed out that both Maersk and Hapag-Lloyd have been slow to expand their fleets, leaving them at a disadvantage compared to MSC, the largest liner operator. He criticized the alliance as a weak partnership, offering fewer Asia-Europe services and trailing competitors like Ocean Alliance and Premier Alliance.

Additionally, Tan suggested that Gemini’s strategy was outdated, having been formed before the Red Sea crisis and driven by a lack of available shipping slots. He argued that the rising costs of transshipment would hurt Gemini’s competitiveness. Lars Jensen, CEO of Vespucci Maritime, agreed that Maersk and Hapag-Lloyd lacked sufficient tonnage, emphasizing the importance of vessel utilization and efficiency for commercial success. Despite claims that Gemini’s model would improve reliability, both analysts were skeptical that shippers would pay extra for punctuality. Source

Container spot rates drop 43% in Q3, worst development in non-COVID year

03/10/2024

The Shanghai Containerized Freight Index (SCFI) dropped another 10% in week 39, marking a 43% decline in the third quarter—its largest non-pandemic Q3 drop since the index’s launch in 2009. Niels Rasmussen, Chief Shipping Analyst at BIMCO, explained that this decline followed a decrease in cargo volumes and spot rates, similar to 2022 after the pandemic-driven boom. Spot container rates to key markets like Europe, the Mediterranean, and the US have fallen sharply, with rates to Europe dropping nearly 55%. Meanwhile, the China Containerized Freight Index (CCFI), which measures average freight rates, fell 19% in Q3, making it the worst third quarter performance in a non-COVID year since 2009.

While freight rates have seen significant drops, average time charter rates remained stable due to limited ship availability and the impact of Red Sea rerouting. Upcoming changes in global shipping alliances may increase demand for vessels, helping to support rates temporarily. However, Rasmussen warned that medium-to-long-term freight rates could be a concern for carriers, as the fleet rerouted through the Red Sea will eventually return, adding to supply growth. Combined with an expected 7% fleet expansion by 2025, demand may struggle to keep pace with this increase in capacity. Source

SOURCES & REFERENCES

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.

JJ & The Inter-Sped Team