Competitive Edge

March 15th, 2023

Takeaways

U.S. West Coast: Everyone’s pressing question, “How soon is soon?” West Coast dockworkers and maritime employers jointly announced the two sides are “hopeful of reaching a deal soon”, however no definitive timeline has been revealed or speculated on. Despite the statement, ten months of stalling negotiations have given way to a lack of confidence in stakeholders. This has been reflected in the WC’s loosening share of the import market. We discuss the West Coast labor talks more in depth in this month’s Interlog Insights. You can sign up here to read more!

U.S. Gulf Coast: The Port of Houston’s dwell fee program remains in effect.

U.S. East Coast: Due to the volume drag, Savannah will seize its offering of evening truck hours while also discontinuing its use of several inland pop-up storage yards. The single-digit vessel counts indicate the volume dip is apparent at all EC gateways.

IMPORT: Asia to North America (TPEB)

Recent Developments:

• Low import volumes from China have led some carriers to shifting capacities in the transpacific. Zim recently increased capacity on its Southeast Asia to USEC service while winding down its China to USWC service. 

• West Coast contract negotiations between the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) remain active. The existing labor contract between the two parties expired on July 1, 2022.

• Overall delays and congestion in the U.S. are down, but weekly blank sailings remain consistent.

Rates: Rates to all US coasts remain low and level.
Space: Space is open.
Capacity: Capacity is open. However, expect a continued presence of blank sailings.
Equipment: Unless advised otherwise, availability is open at inland and coastal ports.
TIPS:
• Book at least two weeks prior to the ready date.
• Expect blank sailings to carry on through Q1 2023.

IMPORT: Europe to North America (TAWB)

Recent Developments:

Relatively high rates and their profitability continue to attract carriers’ attention to the transatlantic market. However, expect the trade to eventually soften as demand dips below last year standards.

• Norfolk Southern is set to begin a new international intermodal service starting April 1. This new service would be between the Port of Virginia and Memphis, read more about this in our Freight News section below.

Rates: With capacity increasing and demand dropping, rates remain in a downward descent. However, they are still notably high when compared to pre-pandemic levels.
Space: Space is open to all U.S. coasts as congestion becomes an odd factor.
Capacity: Capacity continues to loosen as the market sees more ships, including larger ones, entering the market. It is set to increase even more with congestion having subsided.
Equipment: Availability has improved on both sides of the trade.
TIPS:
• Book at least three weeks prior to ready date.
• Even as market conditions become more fair, premium services (i.e., no-roll options and improved cargo reliability) should still be considered.
• Blank sailings have not been routine for the market but remain in close contact with providers to be aware of any developments.

EXPORT: North America to Asia

Rates: Rates continue to slip downward at a slight clip.
Space: Space is wide open.
Capacity: Capacity is widely available for all services. No considerable changes to this market’s capacity through Q1 2023.
Equipment: It can be generally said that most inland points and seaports have balanced equipment availability. If any uncertainty exists, it would be chassis availability at select inland hubs.
TIPS:
• Book at least two weeks prior to the time of departure.
• Blank sailings have not been routine for the market but remain in close contact with providers to be aware of any developments.
• Shippers with high volume projects should take advantage of carrier receptiveness to take on these opportunities. Space is wide open with a high acceptance rate.

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Did You Know: The Top U.S. Trade Partners in January 2023

At the number one spot in January was Mexico with 15.2 percent of total trade.

Number two was Canada with 14.7 percent of total trade.

Coming in third was China with 12.2 percent of total trade.

To round up the top five was Germany (4.8 percent) and Japan (4.1 percent) at fourth and fifth respectively.

Source


Freight News

The Port of Virginia Channels Deepening Expected to be Completed This Year

Soon the Port of Virginia will have the deepest channels on the U.S. East Coast, which will allow the port to accommodate two-way traffic of ultra large container vessels.

The channels will be 55 feet deep, with full completion on the biggest section – the Thimble Shoal West Channel – expected this fall. Completion on the other section – Thimble Shoal East Channel – is expected this spring – per Freightwaves.

Stephen Edwards, CEO at Virginia Port Authority said in a news release that cargo owners, ocean carriers and logistics providers have been following their process closely.

Edwards continued to say, they are telling those stakeholders that they can bring those vessels to Virginia without any hesitation regarding channel width or overhead draft restrictions.

Norfolk Southern Set to Launch a New International Intermodal Service

This new service is set to begin on April 1st and would be between the Port of Virginia and Memphis. As more cargo owners shift freight to ports out on the USEC, NS views this as a good way to try and capture trans-Atlantic business from Europe and Asia.

Trains will run every day and serve at both terminals at the Port of Virginia – Norfolk Intermodal Terminals and Virginia International Gateway, the JOC reports.

Additionally, the Port of Virginia will put chassis in Memphis in an effort to put further strain on other third-party chassis pools.

With this new service, NS and the Port of Virginia are targeting importers using trans-Atlantic services from Europe and Asia, as well as exporters moving goods through Memphis.

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Interlog Insights

In last week’s newsletter, we shared seven questions that shippers should ask themselves when choosing logistics partners.

We also discussed how February import volumes were weak and if the USWC labor negotiations have been impacting shippers and trade on the U.S. coasts.

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