Century Weekly Market Update Sept. 16 - Sept. 22

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, the global container freight index declined by 6% W/W, along with most major trade lane rates. Chinese ports experienced disruptions due to Typhoon Bebinca, the Duisburg Gateway Terminal opened in Germany, and the world’s first ammonia-powered maritime vessel sailed successfully on its maiden voyage. Additionally, the dedicated section “Looming US East Coast Port Strike” illustrates that the growing possibility of the strike leads to a substantial decrease in container rates to the US East Coast.

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 Industry Trends:

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Rising Competition Among Shipping Alliances as Direct Port Connectivity Dominates 2025 Networks

• Gemini, Premier Alliance, and MSC have all announced their 2025 networks, while Ocean Alliance has not yet made an official announcement.
• MSC offers the most direct port-port combinations on Asia-Europe routes, while Ocean Alliance provides the highest frequency of calls on the port pairs they serve for Asia-North America routes.
• Gemini's network strategy focuses on fewer direct port-port pairs, emphasizing shuttles over direct connections.
• MSC provides 3.5 times more direct connections between Asia and Europe compared to Gemini, while MSC and Ocean Alliance compete heavily for direct connections on Asia-North America routes.
• Around half of the direct port-pairs in both trades are unique to one alliance, while 5%-14% of direct port-pairs are served by all four alliances, intensifying competition on those routes.
• Alliances offering distinct port pairs benefit from less competition, while common port pairs see higher competitive pressure among the alliances.

Volatile Spot Rates and Rising Carrier Profits Shaping 2024 Shipping Market

• Spot rates for major trades from the Far East to the US and Europe have been decreasing since their peak in July 2024, with significant drops like a 29% decrease on the Far East to North Europe route.
• Transatlantic trade spot rates, however, have seen a 26% increase since July 2024, highlighting how different markets are following distinct trends.
• The US West Coast has seen an increase in imports from the Far East in 2024, yet spot rates there have dropped faster than on the East Coast due to record capacity levels.
• Service reliability for shipments from the Far East to the US West Coast has improved by 25 percentage points compared to last year, making it a more reliable option than the US East Coast.
• The long-term contract market, measured by the Xeneta Global XSI?, rose 5% in August, with the Far East Exports sub-index driving this increase.
• Ocean carriers posted significant profits in Q2 2024, with Asian carriers like Evergreen outperforming others due to their higher exposure to Far East export trades, where the largest rate increases occurred.

Record Import Volumes Met with Improved Warehouse Efficiency but Rail Backlogs Persist in Southern California Supply Chain

• The Los Angeles and Long Beach ports have avoided significant supply chain disruptions due to Southern California warehouses maintaining efficiency and avoiding bottlenecks.
• Unlike during the COVID-19 pandemic, when warehouses faced worker shortages and equipment delays, facilities today are fully staffed and better equipped to handle steady import volumes.
• Near-dock surge yards, which provide temporary storage for inbound containers, have helped ease terminal congestion, enabling a continuous flow of freight to warehouses and preventing backlog at the ports.
• Chassis availability and usage have improved, with street dwell times for chassis dropping to an average of 5.9 days, down from the pandemic peak of over 10 days, reducing port congestion and promoting more efficient operations.
• Rail container dwell times, however, remain a challenge, with the average dwell time increasing to 8.2 days in August, up from 5.66 days in July, as intermodal rail volumes surge.
• Record intermodal rail volumes, projected to stay strong through October, could lead to continued rail backlogs, though analysts do not predict a major breakdown in the supply chain system.

Weekly Blank Sailings Report: ?

Century’s Blank Sailings Report for the week of September 16th – September 22nd. 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 424 port omissions, 18.3% decrease compared to the week prior.
• Singapore recorded the highest amount of port omissions last week with 33, followed by Ningbo and Shanghai both with 32.
• Other ports with notably high omissions last week are Busan with 22 and Hong Kong with 19.
• Kaohsiung saw a significant decrease in blank sailings W/W, decreasing by 68.2% to only 7 blanks.
• Looking towards the coming weeks, Century’s data shows a 7.1% increase in currently scheduled blank sailings for week 39.
• Next week’s preliminary data shows notable increase at Antwerp and notable decrease at Hong Kong.

Port omissions data for the most frequently omitted ports during week 38 can be found in the table below:

Our?full Blank Sailings Report for the week of September 16th – September 22nd below provides a full list of every current scheduled port omission from Week 38 to Week 48 as of September 23rd, 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.

Century consistently strives to enhance customer satisfaction by proactively addressing challenges in the shipping process. In our commitment to securing space for our valued customers amidst ongoing carrier constraints, our dedicated operators diligently undertake additional measures. After working through meticulous analysis of Carrier Booking and the Actual Shipped Ratio, we found that our teams are currently, on average, making two carrier booking requests per container in order to help ensure our customers' cargo flows as smoothly as possible.

Click here to DOWNLOAD the full Week 38 Blank Sailings Report

Week in Review:

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Rates in Vast Majority of Major Trade Lanes Remained Steady or Declined W/W

• Almost all global trade lanes saw steadied or decreased rates W/W along with the Global Container Freight Index which decreased by 6% W/W to US$ 4,701.
• China/East Asia to North America East Coast rates decreased by 4% W/W to US$ 8,952.
• China/East Asia to North America West Coast rates increased by 1% W/W to US$ 6,875.
• The only major routes that saw W/W increases were the China/East Asia - North America West Coast and the North Europe – China/East Asia route.
• Every trans-Atlantic route saw steady rates except for north America East Coast – North Europe which saw a decline in rates W/W.

Container Shipping Rates Plummet Amid Strike Fears and Cargo Diversions on US East Coast

• Spot container rates from Asia to the US East Coast have dropped over 40% in the past three weeks, attributed to cargo diversions and the fading peak season.
• Many shippers moved holiday merchandise early, in July 2024, to avoid peak season surcharges and potential disruptions from the International Longshoremen’s Association strike threat.
• East Coast and Gulf ports saw a nearly 9% M/M increase in cargo volumes from Asia in July 2024, but these volumes dropped by 2.6% in August 2024 as the front-loading surge slowed.
• August imports to East Coast ports decreased 4% M/M but were still up 9.1% Y/Y, marking the second-highest total since October 2022.
• Carriers are planning to blank 13% of the total capacity from Asia to the US East and Gulf coasts in October, significantly reducing available capacity.
• Capacity from Asia to both coasts is expected to rise in September and October, but the increase will be offset by substantial blank sailings planned for next month.

Major Chinese Ports Experience Severe Disruptions Due to Typhoon Bebinca

• There were extensive disruptions at Shanghai and Ningbo ports due to terminal closures and delays caused by Typhoon Bebinca, which made landfall as the strongest cyclone in 75 years, impacting shipping operations.
• Hapag-Lloyd reported significant delays in vessel berthing, with wait times extending from 36 to 60 hours at Shanghai and 24 to 48 hours at Ningbo as ships accumulated ahead of the storm.
• The Shanghai International Port Group closed all container terminals on Sunday, September 15th, with operations at the Yangshan offshore deepwater port complex resuming shortly after the storm, while other inner-city terminals restarted early Tuesday, September 17th.
• Ningbo-Zhoushan port, the third-busiest container port in the world, also shut down its terminal complex last Sunday, with operations restarting late Monday following the storm.
• Despite the typhoon weakening, logistics and transportation continue to experience delays, complicating cargo movements and vessel schedules in the coming days.
• Air cargo operations were suspended at Shanghai’s airports due to the storm, and significant flight cancellations were reported at Ningbo and Hangzhou, further impacting supply chain operations.

Duisburg Gateway Terminal Opens as Key Logistics Hub for China-Europe Rail Freight

• Duisburg Gateway Terminal (DGT) has officially commenced operations, positioning itself as Europe’s largest inland container facility with train traffic already established between China and Germany.
• The first phase of DGT spans 155,000 square meters, with plans for expansion to 235,000 square meters over two years, ultimately aiming for an annual capacity of 850,000 TEUs.
• Located strategically on the Rhine River, DGT enhances Duisport's status as a vital logistics hub in North Rhine-Westphalia, linking key European ports like Rotterdam and Antwerp through the Rhine-Alpine corridor.
• The terminal has been developed as a climate-neutral facility, utilizing renewable energy sources and hydrogen technologies to power its operations and potentially supply neighboring districts.
• With six cranes and 12 rail tracks, DGT is designed to handle significant volumes, accommodating up to 20 trains, 400 trucks, and six ships daily when fully operational.
• After a decline in rail freight from China due to sanctions on Russia, demand for rail solutions has surged, with estimates indicating a 50% Y/Y increase in China-Europe rail volume in early 2024, prompting some shippers to resume routes through Russia.

Strike by Grain Terminal Workers Disrupts Canada's West Coast Export Operations

• Grain workers at six terminals in Vancouver, critical for exporting crops like canola and wheat, initiated a strike after negotiations with the Vancouver Terminal Elevators’ Association collapsed, leading to potential vessel delays.
• The work stoppage is expected to stop nearly 100,000 metric tons of grain from reaching the terminals each day, resulting in an estimated loss of US$ 26 million in potential daily exports.
• The Port of Vancouver handles over half of all grain produced in Canada, making the strike particularly detrimental to grain farmers in the prairies who depend on this export route.
• Access to export markets is essential for the canola industry, and the strike poses significant financial risks at a time when the agricultural sector is already facing market challenges.
• The Canadian government is urging both parties to return to negotiations with federal mediators to resolve the strike swiftly and restore supply chain functionality.
• While some grain operations at Prince Rupert Grain remain active, the current strike will cause a backlog of Canadian grain destined for Pacific markets, with limited alternative routes available for shipments.

Mississippi River Shipping Restrictions Raise Transportation Costs Amid Harvest Season

• Barge operators are facing restrictions on shipments along the Mississippi River for the third consecutive year due to shrinking water levels, leading to increased transportation costs as grain harvests begin.
• Operators have decreased tow sizes by up to 34%, resulting in significant increases in southbound freight rates, with St. Louis rates up 15% compared to last year and 53% above the three-year average.
• Approximately two-thirds of U.S. grain exports are moved via the Mississippi, and ongoing low water levels are causing delays of up to two days for shipments, according to the American Commercial Barge Line.
• While temporary relief from Hurricane Francine improved water levels, forecasts indicate a return to low thresholds later in September 2024, exacerbating the challenges for shippers.
• Unlike last year, when lower commodity prices prompted farmers to store grain longer, this year’s expected depressed financial environment may drive quicker shipments, further stressing barge capacity.
• The week of September 7 saw barged grain movements increase by 128% Y/Y, highlighting a rising demand amidst the shipping constraints.

Successful Maiden Voyage of the World's First Ammonia-Powered Maritime Vessel

• The NH3 Kraken, a retrofitted tugboat, has completed its maiden voyage using a green ammonia-powered system, demonstrating a significant advancement in sustainable maritime technology.
• Amogy, a clean energy company, converted the 1957 tugboat to utilize "green ammonia," splitting it into hydrogen and nitrogen to power a zero-emission fuel cell, showcasing a new eco-friendly fuel source for shipping.
• This voyage marks the first on-water demonstration of Amogy's ammonia-powered technology, contributing to the company's goal of commercializing sustainable solutions in the maritime industry.
• Amogy aims to help the shipping sector meet International Maritime Organization (IMO) targets of reducing greenhouse gas emissions by at least 40% by 2030, aligning with broader global sustainability goals.
• The European Union plans to enforce stricter carbon emissions regulations for shipping starting in 2025, necessitating a transition to greener fuels like ammonia to comply with emerging policies.
• With prior successful tests of its ammonia system on various vehicles, the NH3 Kraken represents Amogy's most substantial application yet, paving the way for further innovations in decarbonizing maritime operations.

Looming US East Coast Port Strike:

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Ocean Carriers Shift Negotiation Tactics Amidst Looming Dockworker Strike

• For decades, ocean carriers prioritized keeping U.S. ports operational, even at the cost of significant wage and benefit concessions, but this approach has changed as negotiations with dockworkers evolve.
• Current sentiments among carriers indicate a lack of urgency to finalize a labor agreement between the United States Maritime Alliance (USMX) and the International Longshoremen’s Association (ILA), increasing the likelihood of a strike as the existing contract nears expiration on September 30th, 2024.
• With no scheduled talks and a potential strike expected on October 1st, the operational chaos resulting from a dockworker stoppage could severely impact supply chains.
• Carriers are navigating recent negative experiences in the U.S. market, including backlash from lawmakers and the Ocean Shipping Reform Act, which has shaped their reluctance to make concessions during negotiations.
• Unlike other global markets, U.S. carriers cannot recoup terminal handling charges from shippers, making any wage increases for dockworkers a direct financial burden on the carriers.
• The Biden administration's potential influence to pressure carriers into accepting higher wages or new automation rules appears limited, leaving both sides at an impasse as negotiations stall.

Contingency Plans as Strike Threat Looms, Sparking Surcharges and Operational Adjustments

• Some US East and Gulf Coast ports are preparing for a planned dockworker strike, by extending weekend operating hours to facilitate cargo retrieval.
• The Georgia Ports Authority is advising shippers to pick up cargo before the strike, as its Garden City Terminal will close on October 1st, and any refrigerated containers leftover will not be maintained.
• The Port of Houston plans to keep its container terminals operational until 7 PM on September 30, encouraging quick pickup of imports to avoid disruption during a potential work stoppage.
• Ocean carriers are preparing for the strike by imposing new surcharges, including Hapag-Lloyd announcing a “work disruption surcharge” of US$1,000 per TEU for exports affected by the anticipated strike.
• Export bookings from some inland US locations have been halted by Cosco Shipping, reflecting the broader trend of carriers adjusting operations and port rotations in response to the strike threat.

Importers are Rushing to Secure Goods Ahead of Looming Dockworker Strike

• U.S. importers are rapidly bringing in electronics, holiday merchandise, and industrial materials to avoid potential disruptions from an impending dockworker strike affecting major ports from Maine to Texas.
• With nearly 2.4 million containers imported in August 2024, a 21% Y/Y increase, many companies are redirecting cargo to West Coast ports to mitigate strike risks, resulting in significant volume increases.
• California’s ports of Los Angeles and Long Beach saw a combined 47.4% Y/Y surge in inbound container volume in July 2024, raising concerns about potential congestion if many importers divert cargo there.
• Some importers are opting to delay shipments, planning to hold off on cargo transport until late October to avoid potential disruptions during the strike period, reflecting a cautious approach amid uncertainty.

Sources:

Sea Intelligence

Xeneta

JOC

Freightos

JOC

JOC

JOC

JOC

Supply Chain Dive

Supply Chain Brain

JOC

JOC

Wall Street Journal