Market situation – container flows – August 24

Asia

While some shipping lines started to reduce rates for cargo destined for the U.S. EC and WC, as a result of a slight dip in volumes due to the summer vacation period, other shipping lines have rapidly reacted to a bounce back of volumes with an early General Rate Increase (GRI) announcement for the second half of August and beginning of September.

Port congestion in Asia is improving, but overall on-time performance for Asia-Europe trade remains suboptimal due to re-routings via the Cape of Good Hope. Blank sailings will continue in the months to come. A few extra loaders have been injected onto the FEWB route to compensate for downsized vessels, but the frequency of calls is lower than before. The bad weather conditions around the Cape of Good Hope have caused extra delays in the already unstable sailing schedules.

Long-term named account space remains limited and restricted by carriers. Space and equipment are being prioritized for the high spot market.

A container loaded with lithium batteries exploded on board the YM Mobility when it was berthed in the Zhoushan port (Ningbo). Fortunately there were no reported casualties. The shockwave from the blast was felt over a kilometer away, but surprisingly it only caused minor structural damage.

Europe

In the Netherlands and Belgium limited congestion is seen, coupled with on-and-off strikes in Germany and France. These strikes have impacted terminal operations and last-mile deliveries, but at the moment they are not proving problematic. However, in the current environment not much is needed to tilt from ‘normal’ to ‘crisis’.

Similar to what is happening in North Europe, congestion in the Mediterranean region remains, with an average wait time of 4-7 days outside of the main ports of Italy and Spain. Also here strikes at ports in Southern Italy have caused more pressure on certain services. The effects are now being felt in the East Mediterranean, where rates are increasing.

From 07/10/24, export shipments from Bremerhaven and Wilhelmshaven will change customs formalities. It will become mandatory to indicate the name of the vessel on which the shipment is booked in the BHT/WHT documents. If the vessel changes after the documents are issued, you will need to cancel the earlier documents and submit new ones.

North America

On September 30, the current contract covering dockworkers handling containers along the U.S. East Coast and Gulf Coast will expire. This gives the possibility of the first strike since 1977 if the International Longshoremen’s Association (ILA) cannot agree on terms with the Biden administration. The timing is very unsettling as in the U.S. the election campaigns are underway and, in August, import volumes to the country have seen the steepest increase in a year’s time. Maersk CEO Vincent Clerc said in an interview that port strikes along the coast are ‘highly unlikely’. Hapag-Lloyd CEO Rolf Habben Jansen, however, said the threat of a strike had risen, and he does expect some disruptions as a consequence of the ongoing discussions.

Commodities transported on Canadian rails are not considered essential services because “reasonable alternatives” exist through long-haul trucking, the Canada Industrial Relations Board (CIRB) ruled Friday, opening the door for a strike to occur as soon as August 22 that would shut down both Canadian railroads. The Teamsters Canada Rail Conference, which represents close to 10,000 workers at CN and CPKC, has taken note of the CIRB decision.

Indian Subcontinent

The two top ports, Nhava Sheva and Mundra, are facing terminal congestion issues due to heavy rainfall in Mundra, increased volume, and sliding sailing schedules. Carriers have resorted to early vessel gate closures to manage yard utilization and vessel loadings.

Due to political protests in Bangladesh, there is a substantial backlog accumulating in the country. This is expected to further expand to the port of Colombo, Sri Lanka, because over 50% of all cargo coming out of Bangladesh requires a transshipment in Colombo.

Latin America

North-south services between Latin America and North America are being affected by congestion and delays at Brazilian ports. Mainly Paranagua and Navegantes are facing port omissions and vessel diversions. It is no surprise that container freight rates continue to surge on northbound trades to the U.S., Central America and the Caribbean amid tight capacity and strong demand. The recently announced peak season surcharges and general rate increases will push the rates from September 1 close to the record highs seen during COVID-19 in June 2022. Rates have close to doubled since mid-June this year and show little sign of easing until November or December.

Red Sea & Gulf Area

The Suezmax vessel Delta Blue, a Greek tanker vessel, was attacked 4 times in 24 hours. No injuries or structural damage were reported but the tensions in the region near the coast of Yemen remain high.

General

Commercially idle fleet back at pandemic levels. Idle tonnage dropped to 0.7% in the first half of 2024, levels seen during the pandemic. There were no ships over 18,000 TEU idle, and only 2 commercially unemployed ships in the 12,500-17,999 TEU category.

Searching for the best green fuel in nuclear matter. After having invested a lot of R&D in paving the pathway for methanol and after making a huge order for LNG-capable ships, Maersk is now looking into the feasibility of using nuclear energy in its vessels. It is clear that the correct way forward has yet to be determined.