Century Weekly Market Update Apr 8 - Apr 14

Welcome to the Century Weekly Market Update! We’re excited to bring you the latest news and insights from the supply chain and logistics industry over the past week.

Our weekly market update features a dedicated section on emerging industry trends and a report specifically focused on the frequency and impact of port omissions during blank sailings. These updates provide valuable insights to help supply chain decision makers navigate potential disruptions, optimize their supply chains, and stay informed about the latest industry developments.

Last week, trans-Pacific and trans-Atlantic freight rates steadied while routes to Europe saw slight increases. Fronthaul air freight rates soared, India-US spot rates declined, and the Port of Virginia extended terminal operating hours. Additionally, South Korea unveiled a plan to double their container shipping fleet capacity by 2030.

At Century, we're committed to helping our customers stay a step ahead in this rapidly changing industry. Our team of experts is dedicated to providing comprehensive and timely insights to help you make informed decisions and stay competitive.

Emerging Trends

US Retailers Increase Import Forecast in Response to Boost in Carrier Capacity

US retailers upgraded their imports forecast for the first half of 2024, now expecting an 11% Y/Y increase.
The upgraded forecast comes amidst ocean carriers adding services to all coasts, indicating they are not concerned about overcapacity during the summer-fall peak season.
Despite recent disruptions, such as the Port of Baltimore closure due to the collapse of the Francis Scott Key Bridge, US imports continue to rise led by strong consumer demand.
In February 2024, US imports from Asia showed significant growth, with a nearly 40% increase in laden TEUs Y/Y.
The Global Port Tracker (GPT) forecasts an increase in imports from April to August.
Ocean carriers adding or restarting 11 services within trans-Pacific and north-south trades leads to confidence in consumer demand.

US Retailers Establish a Considerably Higher Minimum for Asia Service Contracts

Due to improved spot rates and increased bargaining power of ocean carriers, numerous major US retailers signed service contracts for the eastbound trans-Pacific in 2024-2025, with rates increasing approximately 12% to 17% Y/Y.
Top US retailers obtained new contracts with rates ranging from US$ 1,400 to US$ 1,450 per FEU to the West Coast, while rates for the East Coast are approximately US$ 800 to US$ 1,000 higher than West Coast rates.
Ocean carriers’ high utilization of vessels is leading to increased spot rates for Asia to the West Coast which are at US $2,800 per FEU, and rates to the East Coast at $3,200 per FEU; a significant Y/Y increase of 72%.
Carriers plan to focus on negotiations with mid-sized importers and NVOs, with rates expected to settle in the range of US$ 1,500 to US$ 1,600 per FEU.
NVOs anticipate named account rates falling in the range of US$ 1,600 to US$ 1,700 per FEU, reflecting the evolving dynamics of the trans-Pacific trade.

Port of Savannah Sees Remarkable Growth in Intermodal Rail Volumes

Intermodal rail volumes at the Port of Savannah surged in March 2024, with a 22% Y/Y increase in rail cargo volumes and a 19% rise in total TEUs handled.
Efforts by the Georgia Ports Authority (GPA) and railroad partners CSX and Norfolk Southern have led to efficient cargo transportation, with shipments reaching inland destinations within three days of leaving the port.
The completion of projects like the Mason Mega Rail Terminal has significantly contributed to the expansion of intermodal cargo operations in Savannah, boasting the title of the largest on-port rail facility in North America with rapid rail dwell times.
The Mason Mega Rail Terminal offers daily rail departures to major markets including Dallas, TX, Memphis, TN and Atlanta, GA, enhancing connectivity and facilitating faster cargo movement.
Ongoing infrastructure projects such as the Blue Ridge Connector in Gainesville, GA, further strengthen the intermodal capabilities of the Port of Savannah, creating vital links between Northeast Georgia and the port to support future growth.
The Blue Ridge Connector, set to open in 2026, will serve as a crucial inland network facility, enhancing the region's connectivity and bolstering the efficiency of cargo transport to and from the Port of Savannah.

Weekly Blank Sailings Report

Century’s Blank Sailings Report for the week of April 8th – April 14th. Discover the latest insights on the current trend of blank sailings through the most up-to-date carrier data direct from Century.

Last week saw a total of 232 port omissions, a 9% decrease compared to the week prior.
Ningbo and Singapore recorded the highest amount of port omissions last week with 24 each, followed by Shanghai with 20 and Shekou with 11.
Other ports with notably high omissions last week were Kaohsiung and Busan with 10, and Xiamen with 9.
Shanghai recorded the biggest W/W increase in port omissions, rising by 100%.
Looking towards the coming weeks, Century’s data shows a 17.2% decrease in currently scheduled blank sailings for week 16.
Next week’s preliminary data shows a notable increase in port omissions expected in Rotterdam and notable decreases in Singapore and Ningbo.

Port omissions data for the most frequently omitted ports during week 15 can be found in the table below:

Our?full Blank Sailings Report for the week of April 8th – April 14th below provides a full list of every current scheduled port omission from Week 15 to Week 25 as of April 15th, 2024. The second tab breaks down this data into an easy-to-read table which shows port omissions by?each location per week so you can see which locations are being omitted the most and which locations are experiencing the sharpest increase in port omissions.

Click here to DOWNLOAD the full Week 15 Blank Sailings Report

Week In Review

Trans-Pacific and Trans-Atlantic Freight Rates Steady While Routes to Europe See Slight Increase

Trans-Pacific and trans-Atlantic routes had fairly steady rates W/W while the Global Container Freight Index rose 2% W/W.
Trans-Pacific freight rates have steadied after seven consecutive weeks of declines.
Rates from China/East Asia to the US West Coast stayed steady W/W with rates at US$ 3,287.
Rates from China/East Asia to the US East Coast declined by 1% W/W to US$ 4,275.
Freight rates from China/East Asia to South and North Europe both rose W/W, 3% and 7% respectively; rates to South Europe are at US$ 4,435 and rates to North Europe are US$ 3,545.

Fronthaul Air Freight Rates Soar While Backhaul Rates Remain Relatively Flat in April

Fronthaul and backhaul air freight markets between China and Europe are experiencing contrasting conditions, with significant rate discrepancies.
Fronthaul rates from China to Europe have surged to their highest yet in 2024 and are up 76% from pre-pandemic levels in 2019, reaching US$ 3.94 per kg in April 2024.
Conversely, backhaul rates from Europe to China remain relatively flat, with rates at US$ 1.59 per kg in April 2024, only a 5% increase from levels in 2019.
Rate increases are driven by factors like conflicts in the Red Sea impacting ocean freight reliability leading to a shift from ocean to air freight.
The shift from ocean to air freight is notable, with increased volumes seen particularly in air cargo routes via Dubai to Europe, resulting in high-capacity utilization and a seller's market.
Factors such as the Qing Ming festival, Ramadan, and Easter breaks have also influenced air cargo rates, but with the easing of ocean freight services and the end of these events, some downward pressure on rates is expected.

South Korea Unveils Plan to Double Container Shipping Fleet Capacity by 2030

South Korea plans to invest US$ 4 billion to double the national container shipping fleet capacity to 2 million TEUs by 2030, aiming to support carriers like HMM, KMTC, and Sinokor.
President Yoon Suk Yeol announced the financing initiative, which includes providing eco-friendly ship financing to national shipping companies through the Korea Ocean Business Corporation (KOBC).
The inauguration of the seventh container terminal at Busan New Port, Pier 7, marks a significant step in this initiative, boasting a fully automated facility with a capacity to handle approximately 2 million TEUs.
Currently, South Korea's 14 container lines have a total capacity of about 1.15 million TEUs, with HMM contributing the most at around 795,500 TEUs; total capacity is expected to increase to approximately 1.5 million TEUs with the delivery of vessels currently on order.
The government's move is an update to a previous initiative in 2022, where US$ 2 billion was earmarked to expand container shipping capacity to 1.3 million TEUs.
In addition to fleet expansion, South Korea plans further terminal development at Busan and Jinhae New Port, with a vision to build Jinhae into a smart mega port by 2032, fostering global logistics innovation.

India-US Spot Rate Decline Continues in April with Anticipated Market Shifts Ahead

Recent data from local freight forwarders reveals a continued decline in average spot rates from West India to the US East Coast, with decreases ranging from US$ 200 to US$ 400 per TEU/FEU compared to March 2024.
Forwarder sources provide specific April 2024 spot rates for major carriers: Hapag-Lloyd, Maersk, and CMA CGM, that indicate varied pricing for shipments to different US coasts.
A three-month low of US$ 3,766 per FEU was reported for rates from India to the US East Coast as of April 10th, 2024, following a peak of US$ 5,150 per FEU in mid-February.
Despite the decline in rates by 10% to 15% over the past month, industry experts don't anticipate a sudden collapse in rates, indicating a stable market outlook.
Maersk offers the lowest rate quotes among major players and significant connections for India-US trade lanes, potentially leading to growth in the trade lane as sourcing diversification moves away from China.
Ocean Network Express (ONE) plans to launch a new West India-USEC standalone connection in late May 2024, aiming to meet the rising demand in the India-US shipping route.
Carriers are exploring rate increases on India-Middle East trades, with CMA CGM implementing a US$ 100-per-container general rate increase and Hapag-Lloyd announcing peak season surcharges for specific destinations from West India starting in April 2024.

Relief Measures for Truckers and Businesses Along the East Coast Amidst Challenges Following the Collapse of the Francis Scott Key Bridge

Following the Francis Scott Key Bridge disaster, Maryland, Virginia, and Pennsylvania have waived International Registration Plan (IRP) and International Fuel Tax Association (IFTA) requirements for port truckers in an emergency.
Maryland has specifically waived IFTA requirements for motor carriers hauling freight to or from a seaport, extending the deadline for quarterly IFTA tax returns.
The Federal Motor Carrier Safety Administration (FMCSA) has extended its emergency declaration, relaxing maximum driving time and electronic logging device (ELD) regulations for drivers directly involved in the response efforts until May 9th, 2024, or until the end of the emergency.
These measures address key needs outlined by the Maryland Motor Truck Association, including driver hours of service extensions, ELD exceptions, and IFTA waivers.
Alongside federal aid, Maryland Governor announced US$ 60 million in state relief to support workers and businesses affected by the bridge collapse.
The Maryland Motor Truck Association emphasizes the importance of exploring all available resources, including trucking, to aid those affected by the disaster, highlighting the significant impact on the local intermodal trucking industry.

Port of Virginia Extends Terminal Operating Hours to Accommodate the Increased Demand Redirected from Baltimore

The Port of Virginia is extending its operating hours at Virginia International Gateway (VIG) to accommodate increased cargo volumes diverted from the Port of Baltimore due to the Francis Scott Key Bridge collapse.
VIG will now operate from 3 a.m. to 6 p.m. on weekdays and will be open on Saturdays from 8 a.m. to 5 p.m. in response to the increased demand for cargo handling.
While there's no specified end date for the extended hours, the Virginia Port Authority (VPA) will assess the situation periodically, considering the volume of Baltimore-related cargo being handled and the capacity of truck drivers to manage it during regular weekday hours.
Over 400 truck drivers from the Baltimore area have registered to operate temporarily at the Port of Virginia, facilitating cargo delivery to Maryland and Pennsylvania destinations typically serviced through Baltimore.
Norfolk Southern Railway could serve as a relief valve for diverted cargo, especially for destinations in western Maryland and Pennsylvania, potentially reducing the workload on truck drivers and alleviating congestion at the Port of Virginia.

Department of Homeland Security Unveils Enhanced Strategy to Combat Illegal Trade and Support American Textile Industry

The Department of Homeland Security (DHS) is implementing an "enhanced strategy" to combat illegal trade and support the American textile industry, aiming to ensure fair competition and protect national security.
Measures include intensifying screening of small package shipments under the Section 321 de minimis exception, enhancing inspection and testing, and conducting focused enforcement operations to address issues like forced labor.
DHS will align Customs and Border Protection (CBP) and Homeland Security Investigation (HSI) on special operations, including physical inspections and documentation reviews, to ensure cargo compliance and investigate violations.
Production verification teams will be dispatched to audit high-risk foreign facilities to ensure compliance with trade agreements like the US-Mexico-Canada Agreement (USMCA) and the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR).
The DHS plan also involves expanding the Entity List to identify additional suppliers engaged in forced labor, while stakeholders like the National Council of Textile Organizations advocate for strong penalties to deter illicit trade and safeguard domestic manufacturers.

The Transition to eBLs Leads to a Substantial Reduction in Carbon Emissions

Adopting electronic bills of lading (eBL) instead of paper-based alternatives would lead to an annual reduction of 107,000 metric tons of carbon emissions per a study commissioned by the Global Shipping Business Network (GSBN).
GSBN, a non-profit consortium, promotes the use of eBL and electronic cargo release documents among shipping lines and container terminal operators to promote efficiency and sustainability.
Nine of the top ten global ocean carriers committed to achieving 100% eBL usage by 2030.
The carbon reduction figure of 107,000 tons is a small fraction compared to the 230 million tons of CO2 generated by container shipping in 2023.
In addition to emission cuts, electronic documentation offers benefits such as real-time document editing, improved data structuring, and integration with financial transactions like trade financing.
GSBN's chief operating officer emphasizes the journey to net-zero emissions involves not only cleaner fuels but also transforming trade through digitization, citing the inefficiency and carbon-intensive nature of paper-based processes.

Slow but Steady Journey Towards Net-Zero Emissions for Maersk Continues

Maersk experienced a 37% increase in the use of its low-emission biofuel product in 2023, amounting to 660,000 TEUs, constituting just 3% of the carrier's annual volume.
While there's been a slow uptake of premium-priced green services by shippers, there's a noticeable shift in customer attitudes towards low-emission shipping, with more customers increasing cargo volumes or committing to ship 100% of their cargo with low-emission options.
The ECO Delivery product offered by Maersk, similar to Hapag-Lloyd’s ShipGreen, blends biofuel with conventional fossil fuels, aiming to reduce emissions by over 80% compared to conventional bunkers.
Maersk reports that almost 60% of its top 200 customers have committed to or set science-based targets for achieving net-zero emissions, with some customers shipping more than 50,000 TEUs per year using its biofuel product.
Despite big names joining zero-carbon initiatives, overall demand for low-emission ocean services remains modest relative to market size, with only about 1% of Hapag-Lloyd's annual volume in 2023 being carried via its ShipGreen product.
There's a disconnect between the significant costs required to achieve net-zero targets by ocean carriers and the willingness of cargo owners to pay higher rates for low-emission fuels.
The disconnect indicates need for a global mechanism to address the cost differential and robust emission reporting capabilities aligned with recognized calculation methodologies.

Maersk's OC1 Service Through the Panama Canal Resumes on May 10th

Maersk is set to reinstate its OC1 service through the Panama Canal, signaling a positive development for the canal's operations after a halt in January 2024.
During the hiatus, goods on the OC1 route were transported via rail across Panama, however, this method will be phased out by the end of May 2024 as Maersk returns to its original shipping route.
Maersk implemented a temporary solution by creating separate loops on each side of the canal, utilizing ports on both the Atlantic and Pacific coasts of Panama.
The Panama Canal faced capacity challenges due to a months-long drought in 2023; restrictions on daily transit bookings and vessel draft resulting in significant backlogs of ships.
Recent improvements in water levels at Gatún Lake, the source of water for the canal's lock system, have prompted the Panama Canal Authority to gradually ease transit restrictions, with Maersk closely monitoring the situation.
Mediterranean Shipping Company (MSC) is facing a potential US$ 63.3 million fine from the Federal Maritime Commission (FMC) for alleged violations of the U.S. Shipping Act, including excessive late fees and billing irregularities.