North America update - June 10, 2024
North America readies itself for a tumultuous peak season
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Trade Overview
Despite widespread warnings of an early peak season, obstacles on the Transpacific trade warrant caution in forecasting a sudden spike in volumes. The negative factors at play on the global stage extend well beyond North American ports and have put shippers, carriers, port & terminal operators, and Canada’s biggest rail networks on high alert. This tells a story of maintaining equilibrium now and in the months ahead.
On the Transpacific side; some ports like Baltimore, Halifax, and Panama are actively recovering from previous weeks and sometimes months worth of issues. Others like Vancouver, Miami, and Charleston are facing fresh waves of congestion, loss of vessel capacity, or declines in schedule reliability. Anticipation of the CA strike keeps carriers on their toes with some already taking significant actions to omit, blank, or swap calls into Vancouver into June and beyond. There are a total of 14 port swaps and diversions away from CA and into US gateway ports confirmed from w24 onward, as well as 3 completed since Mid-May. Further delay of the strike action and government intervention mean an indefinite extension of measures taken by carriers to predict this impact, creating a persistent shadow of doubt on the weeks ahead.
Looking at the Asia-Europe trade; rate hikes due to Red Sea risks and increased transit costs around the Cape of Good Hope, reports of container and equipment shortages in Asia, a relatively short-lived but high congestion spike in Singapore, and a need for capacity injection all spell difficulties for the peak season ahead. There has been some fresh stability injected by a commitment to the Cape of Good Hope in long-term schedules on the part of Red Sea affected services, including some serving the East Coast like THEA’s EC5.
However well-defined those new schedules are, longer transit times on routes passing Panama or the Cape of Good Hope into North American ports may still mean that plenty of shippers choose to move inventory through the West Coast gateway and target the East Coast by rail instead. This, coupled with diversions away from Canada’s West Coast ports, may mean that the likes of Seattle, Tacoma, Los Angeles, Long Beach, and Oakland see extra vessel capacity. On the flip side, that also raises inevitable schedule reliability management concerns for ports hosting increased traffic.
From a positive outlook; despite major events in nearly every geographic sector in our E/W trades, stakeholders across the board continue to demonstrate flexibility and ingenuity. Carriers employ creative long & short-term scheduling solutions, and P&T operators as well as intermodal shippers continue to amp up their forward visibility efforts to cleverly anticipate risks. All in all, if rumors of a second Pandemic-type bubble ring true, it seems fair to say that everyone is coming in armed with a great deal of aptitude for ad-hoc crisis management.
Congestion & Traffic Highlights
Panama is seeing a welcome resurgence as nearly all services have returned to their original proforma routes, but it carries a double-edge as congestion has begun to climb again since w17. If it proves to be persistent, this could threaten established transit times and create a cyclical situation with carriers and shippers once again taking business elsewhere. Panama is currently 80% congested with 4 vessels waiting, 1 in port, and 37 steaming towards. Average congestion has been in the ~30% range since w20, still below the previous peaks of 60% in January and March. Weekly averages are up from 54 vessels from January through mid-May; the next 6 weeks expects to see an average of 61 weekly transits.
Charleston terminals suffered from heavy congestion when they were shut down due to software vendor issues between May 20-22. Congestion has been on an upward trend here since w18, preceding the software issues by 2 weeks and shooting from 30% to 70% on average in a matter of 14 days. This is likely due to wall construction at Wando Welch Terminal which is projected to continue through the next 12 months. Increased wait times have led to at least one service, the ML - OC1, announcing redirection to Savannah for the foreseeable future. Average weekly congestion has remained at ~70% for the past 3 weeks and the port is currently 67% congested with 14 vessels waiting, 7 in port, and 12 steaming towards.
Miami has recently experienced a bit of a peak in congestion, rising from 0% in w18 up to a 32% average in w23. While it is currently experiencing the highest levels of average weekly congestion seen over the past 12 months, the cause of this remains unknown to our team. The port is currently at 100% congestion with 2 vessels waiting, 0 in port, and 7 steaming towards.
Baltimore is not quite fully functioning at its former levels but is on the steady road to recovery. w21 onwards has seen a significant rise in traffic with an average of 10 weekly arrivals these past 21 days and there is an expected uptick of 2-3 additional vessels per week starting in w26. Many services have made good on their promise to return to proforma calls by mid-May and the rest are expected to resume usual operations into Baltimore by the end of June. Services returning in June include but are not limited to: ML - TA2, ML - AMEX, GRMLDI - NAWAS, and the ML - TP20.
Blank Sailings Highlights
From w23 through w29, the US West Coast expects a total of 14 blank sailings, with 5 being freshly announced in the past 30 days. The MSC- SENTOSA SHIKRA is the most blanked service standing at just 2 blanks, showing that the canceled sailings are fairly distributed for the most part.
The US East Coast on the other hand, expects 25 blanks within the forward 6 week window. Like the USWC, blanks are fairly evenly distributed across services.The OCEAN- AWE8 holds the highest count with just 2. There were just 2 new blanks announced in the previous month compared to our last reporting period.
The Canadian West Coast expects 14 blanks, with the ZIM- ZPX leading with 6. A whopping 10 of these blanks were announced in the past month alone. East Coast Canada is expecting just 7 blanks. The TROP- CANADA and the ZIM - CFX service cover 3 each. TROP - CANADA announced blanks due to the vessel TROPIC LISETTE’s scheduled maintenance which took place on May 21. THEA- EC5 is down to just 1 blank way out in w31, down from 3 in our previous 6 week reporting period at the start of May.
Services Review
Maersk Line Adjustments
ML - TP20 - Maersk has announced the suspension of this service. In the public advisory on May 31, Maersk stated that the ripple effects of the ongoing Red Sea situation have led them to reorganize the network to meet their customer needs. The suspension of this service comes barely 3 months after its relaunch in April 2024.
ML - OC1 will be calling Garden City Terminal in Savannah in v18, beginning June 18.
Mexico's West Coast
MSC - Mexica is a new service that began on May 26, the first sailing was MSC Marina. The service connects Asia and the West Coast of Mexico (Manzanillo and Lazaro Cardenas) Source - MSC.
COSCO - WSA5, also connecting Asia & Mexico, was announced by OOCL and began in early May.
Red Sea Reroutes
OCEAN - AWE2 has seen the Cape of Good Hope replace Suez Canal in long term schedules for v13 beginning May 9th. An increased proforma round trip time of 2 weeks.
THEA - EC5 has presented the Cape of Good Hope as the route of choice since November 2023. These past few weeks have seen a considerable reshuffling of its vessels and slot assignments; a positive outcome that has brought delays down from a minimum of -20 days or more on the first call into Halifax all the way to -10 days or below forecasted delay from w23 onwards.
Strike Actions
ZIM - ZEX will see two extraloader vessels, formerly on the ZIM - ZPX, calling Long Beach in June - one of many instances of some measures to divert cargo from Vancouver in anticipation of strike action.
ZIM - ZPX will notably see 7 blanks all the way through the end of June.
OCEAN - PSW2 had announced 4 omissions for Rupert when the strike was first announced, but has since dropped 3 and retained just the 1 in w26.
2M - WCNA loop 5 had previously planned inducement calls for Tacoma and Seattle for 4 vessels headed to Vancouver in June. Seattle inducements have recently been removed but Tacoma remains.
Our team plans to release the next iteration of our newsletter in early July. In the meantime please do keep an eye on our Linkedin posts for other updates and invitations.
