Century Weekly Market Update Oct. 28th - Nov. 3rd

Century Weekly Market Update Oct. 28th - Nov. 3rd

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 stabilized at US$ 3,315, ending a six-week downward trend. The peak season for eastbound trans-Pacific shipments is extended by growing import demands and reduced blank sailings from Asia, and labor unrest continues among dockworkers at the Port of Montreal, marked by a partial unlimited strike. Additionally, US ports are striving to achieve zero emissions with support from the EPA's funds and Climate United's Electric Truck Lease Project.

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:

 

Global Schedule Reliability Shows Slight Downturn Following May's Peak

  • The global ocean freight schedule reliability fell to 51.4% in September 2024, showing a fluctuating trend between 50% and 55% throughout this year.
  • There was a significant Y/Y decline of 13 percentage points in schedule reliability for September 2024.
  • The average delay for late vessel arrivals decreased to 4.58 days in September 2024, signaling an improvement compared to last year.
  • Maersk demonstrated the highest reliability among the top 13 carriers, achieving a schedule reliability of 55.5%, while Wan Hai had the lowest reliability at 40.4%.
  • None of the carriers improved in reliability performance Y/Y, with both MSC and Wan Hai witnessing the largest drops of 21.5 percentage points.

Sea Intelligence

US Retail Sector Experiences Significant Inventory Surge

  • The US Census Bureau data indicates a consistent rise in retail inventory levels, with an accelerated pace.
  • Retail inventories are surpassing the expected trend, with a significant deviation of US$ 26 billion in August 2024.
  • Retailers are accumulating excessive inventory beyond standard levels, potentially signaling an early peak season.
  • This trend may lead to a decline in import volumes, mirroring the fluctuations in spot rates on the trans-Pacific following the peak in mid-July 2024.

Sea Intelligence

 Contract Negotiations Resume for US East and Gulf Coast Dockworkers

  • Following the conclusion of the strike between the United States Maritime Alliance (USMX) and the International Longshoreman’s Association (ILA) on October 3rd, 2024, their current contract has been extended until January 15th, 2024, to allow for negotiations on a new contract.
  • A tentative agreement has been reached with a 61.5% wage increase over the 6-year contract duration. All remaining matters are pending resolution through the upcoming contract discussions in November 2024.
  • The specifics of the negotiations will be confidential until the scheduled meetings are held in New Jersey.
  • Automation has become a contentious topic, particularly as the union advocates for prohibiting automated equipment.
  • Outstanding issues include safeguarding jurisdiction, healthcare benefits, and compensation for dockworkers affected by layoffs resulting from the transition to containerized shipping.


Weekly Blank Sailings Report:  

Century’s Blank Sailings Report for the week of October 28th – November 3rd. 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 603 port omissions, a 6.7% increase compared to the week prior.
  • Singapore recorded the highest amount of port omissions last week with 57, followed by Ningbo with 49 and Shanghai with 48.
  • Other ports with notably high omissions last week are Busan with 42 and Port Klang with 30.
  • Taipei saw a significant increase in blank sailings W/W, increasing by 600% from 1 to 7 blanks.
  • Looking towards the coming weeks, Century’s data shows a 2.4% increase in currently scheduled blank sailings for week 45.
  • Next week’s preliminary data shows notable increases in port omissions to be expected at ports in Yantian and Cartagena.

Port omissions data for the most frequently omitted ports during week 44 can be found in the table below:

Internal

Our full Blank Sailings Report for the week of 28th – November 3rd below provides a full list of every current scheduled port omission from Week 44 to Week 54 as of November 3rd. 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 44 Blank Sailings Report


Week in Review:

 

Global Container Freight Index Shows Resilience Following Continuous Decline

  • After six successive weeks of decline, the Global Container Freight Index remains steady at US$ 3,315.
  • China/East Asia to North America East Coast rates increased by 1% W/W to US$ 5,219.
  • China/East Asia to North America West Coast rates decreased by 2% W/W to US$ 5,403.
  • Corresponding with the stable trend seen in the Global Container Freight Index, a few lanes also displayed steady W/W rates: North America East Coast –  China/East Asia, North Europe – China/East Asia, and Europe – South America West Coast.

Freightos

Surging Import Demands from Asia Drive Unprecedented Strength in Trans-Pacific Shipping

  • The eastbound trans-Pacific route is experiencing an extended peak season, resulting in significant imports from Asia and a decrease in blank sailings for November.
  • Import demand from Asia remains consistent due to strong retail sales during Black Friday season, concerns about tariffs, and the upcoming expiration of a labor agreement at US East and Gulf coast ports.
  • Projections suggest that approximately 5.4% of total capacity bound for the US West Coast and about 8.1% destined for the East Coast will be blanked in November 2024, indicating a decline from the previous year’s blank capacity.
  • The spot rates from Asia to the US West Coast surged by 133% Y/Y to US$ 4,200 per FEU, while rates to the US East Coast rates increased by 87% Y/Y to US$ 4,300 per FEU. Such escalations prompted carriers to announce rate adjustments beginning in November 2024.
  • High vessel load factors have been driven by robust peak season demand, causing US imports from Asia to jump by 16.7% Y/Y in September 2024.
  • Strong demand and limited blank sailings are maintaining tight vessel space, creating pressure on peak season surcharges and the potential for carriers to implement rate increases.

Journal of Commerce

US Trucking Demand Shows Persistent Weakness in Q4 2024

  • US trucking demand remains weak in Q4 2024, awaiting a substantial upsurge from a robust US manufacturing sector.
  • The for-hire trucking ton-mile index experienced a Y/Y drop of 0.6% in August 2024, reflecting the industry's standstill.
  • The soft demand reported by prominent publicly traded trucking firms implies that rate hikes in early 2025 are unlikely to occur.
  • Yellow, a once-dominant US trucking company, filed for bankruptcy in 2023, causing a reduction in LTL (less-than-truckload) capacity, with the loss of 323 terminals and roughly 19,000 doors of LTL capacity that have not yet been filled.
  • LTL carriers are being cautious about activating terminals previously owned by Yellow, choosing to wait for market improvements.
  • A potential upturn in the first half of 2025 depends on Federal Reserve decisions regarding interest rates and the industrial sector's recovery.

Journal of Commerce

 Shippers Brace for Red Sea Disruptions in 2025 Contract Talks

  • The upcoming negotiation for the 2025 contracts between Asia-Europe shippers and carriers will heavily focus on the Red Sea situation to avoid the recurrence of space constraints and high rates experienced during the current peak season.
  • A possible return to the Red Sea and Suez Canal routes in 2025 might result in a quick drop in rates due to an overflow of vessel capacity.
  • Negotiations are focused on establishing contract flexibility to accommodate potential Red Sea reopening and fluctuations in rates.
  • European importers typically initiate annual contract talks with carriers in Q4 to secure fixed-rate agreements.
  • Rising spot prices on trade lanes like Asia-North Europe and the Mediterranean are influenced by numerous factors such as blank sailings and upcoming holidays.


Journal of Commerce

Strong Demand Drives Intra-Asia Rate Hikes Amid Post-Typhoon Port Congestion

  • Container lines are leveraging a constrained intra-Asia market by implementing peak season rate increases, driven by robust Chinese demand and congestion-induced challenges.
  • Rates in the intra-Asia market dipped before the recent holidays but have since experienced a significant recovery.
  • Despite a decline in Drewry's intra-Asia container index, specific routes like Busan-Shanghai and Shanghai-Yokohama have observed rate rises in October.
  • Vessel schedules in China, Vietnam, South Korea, Japan, and Philippines were disrupted due to the occurrence of multiple typhoons in September.
  • Rate hikes are attributed to cargo backlogs from blank sailings and heightened Indian import demand during Hindu Festivals.
  • Before October, there were signs of improving intra-Asia rates, as evidenced by the growth in SITC International's average revenue of US$59 per TEU in Q3 2024.

Global Air Cargo Demand Remains Strong Through Holiday Season Amidst Thinning Growth Rates

  • Global air cargo demand shows resilience throughout the holiday season, although the pace of growth is moderating when compared to summer.
  • The International Air Transport Association recorded a 9.4% increase in cargo tonne-kilometers (CTKs) from September 2023, while industry CTKs fell by 0.4% on a seasonally adjusted basis.
  • September 2024 marked the conclusion of a nine-month period featuring double-digit annual demand growth, which began in December 2023
  • Carriers originating from Asia Pacific and Europe played a crucial role in the global upsurge of CTKs, accounting for 42% and 26%, respectively.
  • Despite retailers pushing forward their cargo orders in preparation for a destination port strike, there was no significant move towards air freight as the strike approached.

Port of Montreal Dockworkers Initiated Partial Unlimited Strike

  • Following a 24-hour strike from October 27th to October 28th, CUPE Local 375, the Canadian Longshoremen’s Union, declared a partial unlimited strike as part of their escalating pressure tactics amid ongoing contract talks with the Maritime Employers Association.
  • Approximately 1,200 dockworkers at the Port of Montreal commenced a work stoppage at 11:00 am on October 31st at Viau and Maisonneuve Termont terminals.
  • 15% of the total volume handled at Viau and Maisonneuve Termont terminals, which together account for 40% of the Port of Montreal’s handling capacity, was affected by the strike.
  • Longshore workers have been operating without a collective agreement since December 31st, 2023, with salary, scheduling, and work-life balance being key negotiation points.
  • Federal Labor Minister Steven MacKinnon's proposal for a special 90-day mediation period to facilitate negotiations without any strikes or lockout was declined in early October.

 EPA Grants US$ 3 Billion to Support Zero-Emission Initiatives at US Ports

  • US$ 3 billion has been allocated by the U.S. Environmental Protection Agency (EPA) to 55 recipients under the Clean Ports Program, targeting the reduction of diesel air pollution within US ports.
  • President Joe Biden unveiled this initiative while visiting the Port of Baltimore, stressing the importance of implementing zero-emission equipment and infrastructure projects to enhance air quality.
  • The funding facilitates the purchase of over 1,500 cargo handling units, 1,000 drayage trucks, 10 locomotives and 20 vessels, along with shore power systems, charging infrastructure, and solar power generation.
  • The EPA's grant for non-automated equipment indirectly supports the International Longshoremen's Association amid disputes with the U.S. Maritime Alliance, as negotiations for a new contract are set to restart in November 2024.
  • The Port of Los Angeles secured around US$ 412 million to shift towards zero-emission operations, reaching a total of US$ 644 million when incorporating private sector contributions.
  • The Port Authority of New York and New Jersey will be granted US$ 344 million for their Catalyzing Change project, primarily aiming to implement electric cargo handling equipment and drayage trucks, along with the necessary charging infrastructure.

Climate United Initiates Electric Truck Lease Project at US Ports

  • Climate United, a nonprofit organization, is launching a US$ 250 million project to provide electric truck leases to small fleet operators at US ports.
  • The initiative involves acquiring up to 500 Class 8 electric semi-trucks in the next three years, with a priority on vehicles manufactured in the US using domestic components.
  • The objective of Climate United is to initially rent out these trucks to operators at the Ports of Los Angeles and Long Beach, with future plans to expand the service to include other shipping hubs.
  • Despite being cost-effective to operate, electric drayage trucks face a hurdle with high initial costs, hindering small fleets from transitioning to all-electric vehicles.
  • California requires drayage fleets at ports and intermodal railyards to gradually introduce zero-emission vehicles starting in 2024, with the goal of achieving fully zero-emission fleets by 2035.
  • The Ports of Los Angeles and Long Beach have invested US$ 25 million in new charging infrastructure for electric semi-trucks, in collaboration with the state offering vouchers up to US$ 250,000 for zero-emission drayage vehicles.

Enhancing Truckload Booking through Automation Improves Daily Loads and Operational Effectiveness

  • Automation is being utilized by freight brokers to enhance productivity in load booking, facilitating better access to capacity for shippers.
  • The logistics industry is swiftly embracing automation, resulting in notable enhancements in efficiency within truckload booking.
  • Traditionally, the average count for daily loads per person ranges from four to six, but automation is pushing this figure higher, enabling certain brokers to achieve 10 or more daily loads per person.
  • Brokers are concentrating on automating booking processes to promote development across various sectors of their operations, with the goal of achieving 50 daily loads per person.
  • Major brokerages are also pursuing substantial growth in daily loads, prioritizing the automation of repetitive tasks to enhance overall efficiency.
  • The integration of automation in brokerage operations is expected to transform the workforce, directing human resources towards tasks that demand a higher degree of personal engagement.


Sources:

Sea Intelligence

Sea Intelligence

Sourcing Journal

Freightos

JOC

JOC

JOC

JOC

Sourcing Journal

Financial Post

Sourcing Journal

Supply Chain Brain

JOC


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