Market Update Q4 2024: No.12

Transpacific Market Rates and Update

Asia to US rates increased on November 1. India/Subcon rates and Asia rates have additional increases proposed for 11/15 application.

Generally in the import trade, Gulf rates increased significantly. EC/WC increases on a case-by-case basis depending on the carrier and origin of the cargo

Carrier schedule changes/blank sailing

The Eastbound Trans-Pacific trade is seeing unusually strong demand for Asian imports in November when peak season typically slows. Steady retail sales, concerns over higher tariffs, and the mid-January expiration of the labor agreement at U.S. East and Gulf Coast ports have reduced blank sailings to about 5.4% on the West Coast and 8.1% on the East Coast for November, according to eeSea.

Next 2 weeks blank sailings

PIERS data shows U.S. imports from Asia reached 1.72 million TEUs in September, up 16.7% year-over-year, while the National Retail Federation expects a 3.1% increase in imports for October. Ocean carriers are also adding general rate increases (GRIs) of $500 to $600 per FEU starting 1 November, despite strong rates since summer.

There are several factors contributing to strong volumes. These include frontloading of shipments due to strike concerns, tariff uncertainty following the U.S. election, and an early Chinese Lunar New Year on 29 January. With capacity constraints persisting through November into December, it is possible and carriers say peak season surcharges (PSSs) will likely continue, although at lower levels.

Canadian West Coast Labor Update – Vancouver / Prince Rupert - Strike Activity Commences

Terminal Operations:
As of Monday, November 4th, 8:00 AM, the Vancouver and Prince Rupert Port Terminals are effectively closed due to ILWU Local 514's strike action. There are currently no vessel, yard, or rail operations.
The BCMEA coastwide lockout will also take effect today at 4:30 p.m. PST and continue until further notice.

Rail Operations:
As of today, all export loads and pre-billed empties destined for the Port of Vancouver will not be accepted at inland rail ramps.

Montreal Labor Issue

Meanwhile, longshore workers at the Port of Montreal have already launched an unlimited strike at two terminals operated by Tremont, impacting around 40% of container traffic, which accounts for about 15% of the port’s overall volumes. The Maritime Employers Association (MEA) said that due to the disruptions, cargo volumes have decreased by -24% since 2022.

New Port Infrastructure investment

The U.S. government is awarding US$3 billion in investments to strengthen the country's port infrastructure, boost jobs, and reduce pollution at 55 ports across 27 states and territories.

The US$3 billion investment will fund “… battery-electric and hydrogen-powered human-operated and human-maintained equipment, including over 1,500 units of cargo handling equipment, 1,000 drayage trucks, 10 locomotives, and 20 vessels, as well as shore power systems for ocean-going vessels, battery-electric and hydrogen vehicle charging and fueling infrastructure, and solar power generation”, according to the statement released by the White House.

Congestion and Rail Delays via WC:

Vancouver and Canada gateways will join what is an already existing and fairly serious issue with rail delays via LA/LB (and less so but also not great is SEA/TAC)

There is approximately 1 week of port delay in LA/LB regarding vessel discharge, appointment/container availability, and empty return.
There is approximately a 2+ week delay for cargo NOT moving on the on-dock rail option.

If you have urgent cargo to the Midwest or Gulf Coast, we suggest discussing your timetable. We may be able to present faster/better options.

Author
Matthew Crocker
CCO