October 5th, 2022
Stay Current with Interlog’s Weekly Newsletter:
As most are aware, Hurricane Ian touched down in Florida last week on Wednesday, September 28th. Continuing to move throughout Florida during the week, making its way to parts of Georgia and the Carolinas. Hurricane Ian left a devastating impact on those communities as they are now going through the wreckage. We are planning to touch on the hurricane, the impact, and any new updates regarding Hurricane Ian in our weekly Interlog Insights Newsletter. If you would like to sign up to get our newsletter every Friday morning, click here.
Additionally, Hurricane Ian left an impact on the supply chain industry. Many warehouses, factories, distribution centers, and other industries were directly impacted because of Hurricane Ian. You can read more about Hurricane Ian and the impacts it has on the supply chain, here.
We extend our condolences to the communities, families and everyone impacted by Hurricane Ian.
UPDATE: U.S./Canada Ports – Number of Vessels at Anchor as of 10-04-22
- Savannah: 31 Vessels at Anchor (+1)
- Houston: 30 Vessels at Anchor (-2)
- Vancouver: 29 Vessels at Anchor (-10)
- San Francisco/Oakland: 10 Vessels at Anchor (+1)
- New York/Newark: 8 Vessels at Anchor (0)
- Los Angeles/Long Beach: 8 Vessels at Anchor (0)
- Mobile: 8 Vessels at Anchor (+3)
- Charleston: 2 Vessels at Anchor (-1)
Note: This count does not include vessels moored and being unloaded at port docks. Colored numbers in parentheses represents the change from last week over.
- U.S. West Coast: Not only is the congestion down, it’s also been consistent with little change week over week. The USWC is most the stable of the three in respects to vessel congestion.
- U.S. Gulf Coast: Houston remains to be the epicenter of congestion for the Gulf. Mobile has garnered several vessels at anchor over the past couple of weeks.
- U.S. East Coast: Savannah remains at the forefront of vessel congestion along the USEC. Moreover, this week has it crowned as the leader in congestion for all of the United States.
- New York/Newark remains at eight vessels backlogged—the same as last week—dropping 50 percent from just two weeks ago. We continue to suspect that carriers are weary of the port’s impending fees on dwelling containers.
- Canada: The Canadian West Coast ports are at near yard capacity. Vancouver has been subject to vessel berthing delays; however the port has seen improvements that hopefully will sustain.
IMPORT: Asia to North America (TPEB)
- China’s Golden Week is underway and will end October 7. Factories in China are closed at this time.
- The holiday’s typical impacts to capacity and rates are not as significant when compared to last year.
- 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 July 1.
Rates: Rates continue to fall. Notably from Chinese base ports to all U.S. coasts.
- Carriers have announced GRIs effective October 15 affecting all Canadian and U.S. destinations for freight from Asian and Indian sub-continent origins.
Space: Space is generally open.
Capacity: Amid lower demand from shippers, many carriers have reduced their capacities. Shippers continue to divert cargo to the USEC and USGC due to fears of disruptions at West Coast ports from ongoing labor talks.
Equipment: Some inland terminals are reaching max capacity with inventory. Intermodal systems remain stressed with congestion and truck and chassis deficits.
- Book at least two weeks prior to the ready date.
- For cargo ready now, take advantage of opening space and fallen rates on the spot market.
- Reconsider averting West Coast routings. The “hot spots” for ship congestion and vessel wait times has shifted to the East Coast.
IMPORT: Europe to North America (TAWB)
- Northern European hubs, such as Rotterdam, Antwerp, and Hamburg, remain congested.
- Labor-related tensions remain gripping the U.K’s ports as unions dispute over a new pay deal that matches inflation rates.
- The second strike in the last two months of around 1,900 dockworkers at Britain’s largest container port, Felixstowe, has wrapped up today.
- Some 560 dockworkers at the Port of Liverpool have returned to work following an 11-day strike with no new offers from either side.
- For both the port strikes at Felixstowe and Liverpool, the dockworkers have warned the ports respectively that further walkouts could occur.
- USWC ports have seen port and yard congestion and improvements to vessel waiting times.
- On the USEC, both ports of New York/Newark and Savannah remain having a significant number of backlogged vessels at anchor off their respective shores.
- The Port of Houston, on the U.S. Gulf Coast, is also grappling with vessel congestion.
Rates: Rates have seen some decreases. However, not at the same clip as other trade lanes. With carriers expected to introduce more capacity to the TAWB lane, many speculate this will trend rates downward.
Space: Space remains tight to the USEC. However, space has opened for direct routings to the USWC.
Capacity: Capacity for both North Europe and Mediterranean services remain gripped. Low water level of Germany’s Rhine River continues and both terminals experience a shift from barge to truck capacity for import and export delivery/pick-up.
Equipment: Equipment at European seaports is not as readily available as it has been for the past few months. Inland terminals in Europe are also still reporting equipment shortages. On the U.S. side, truck and chassis availability remain concerning.
- Book five or more weeks prior to ready date.
- Strongly consider premium services for no-roll options and improved reliability of cargo.
- Be flexible and entertain alternative routings. They could cut back on wait times and/or costs.
EXPORT: North America to Asia
- For the US, port congestion remains an issue for Savannah and Houston.
- Diminished schedule integrity continues to challenge post earliest return dates.
- Vessel arrivals remain smooth for USWC POLs.
Rates: So far, no GRIs announced for October.
Capacity: Available capacity remains fluid for USWC POLs.
Equipment: Truck, container, and chassis availability remains dire and has significantly contributed to congestion of the intermodal system and IPI origins. Standard equipment at ports remains available unless carriers advise otherwise.
- Book four to five weeks prior to the time of departure to secure necessary equipment and vessel space.
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Did You Know: An 8-Day Strike at the Port of Felixstowe Will Overlap a Second Strike at the Port of Liverpool – Which is Expected to Take Place October 11th-17th
Union reps at both of these ports were expected to meet last Wednesday to discuss further steps.
The Port of Felixstowe is an important port in the United Kingdom, and their largest port – which is also crucial transport link during the holiday shipping season.
30% of the traffic that is handled at the Port of Liverpool comes from or heads to the U.S.
Source: CNBC 09-28-22, CNBC 09-27-22
Ocean carriers are increasing blank sailings as October demand seeks to soften
It’s pretty typical for blank sailings to occur surrounding the weeks of China’s Golden Week. But also, the strained market conditions in ocean shipping has lead ocean carriers to increase blank sailings and more than previous years. Officials at Sea-Intelligence, a research and analysis agency, have said that carriers have often used blank sailings as a way to match supply with demand.
Reports from Supply Chain Dive are showing that carriers are planning on reducing capacity for the Asia to North America West Coast trade lanes at minimum of 24% and up to 29% in the following weeks after China’s Golden Week – which is scheduled to end this Friday the 7th. Furthermore, data from the CNBC Supply Chain Heat Map has shown a 20-30% drop in ocean bookings in September and October.
Sea-Intelligence data, as reported by Freightwaves shows that capacity reductions on the trans-pacific are projected to be at 22-28% of deployed weekly capacity, following Golden Week – compared to 15-17% in 2019. While, on the Asia to North Europe lane, peak capacity reduction following Golden Week is projected at just slightly under 20%, which is in line with 2019 but higher than the 2014-2018 average.
An official at Sea-Intelligence, also stated that shippers may feel the effects of an increase in blank sailings in a couple ways: contract rates are unlikely to be impacted but a surge in spot rates potentially could lead carriers to be more intrigued by spot rate business versus contractual volume – this could potential cause a shift in capacity constraints for a bit.
The Port of New York and New Jersey pushes to the number one spot for busiest port in the U.S.
In the month of August, the Port of NY/NJ saw its busiest August ever, moving 843-191 twenty-foot equivalent units (TEUs). Thus, taking over the number one spot, after outpacing the Port of Los Angeles and Long Beach.
With the continued increase in volumes out at the Port of NY/NJ, and out in East in general, it’s only natural that more port congestion is occurring.
Specifically, the congestion has added to delays in arrival times for manufacturers that are needing parts to complete their products, in addition to the finished products that need to be placed in stores. In mid-September, CNBC reported that data from MarineTraffic showed 12 container vessels at the Port of NY/NJ were waiting for an average of 9 days. While 28 container ships at the Port of Savannah had an average wait of 9.9 days.
The Port of NY/NJ moving ahead with their empty container fee
The container fee was originally set to begin on September 1st but was postponed so discussions with ocean carriers and their concerns surrounding the fee could be had. The Director of the Port of NY/NJ stated that the ocean carriers were not opposed to paying another fee, but it was the process and mechanism the port chose that needed to be reworked.
Each carrier must show on a quarterly basis that their imports and exports are balanced; intermodal rail balance will also be calculated. The carrier would then be responsible for drawing down its empty box totals by 25% each subsequent quarter, with the goal of depleting its total accumulation of empty containers by four business quarters, CNBC reports. If a carrier is found to have violated this, a $100 fee per container out of balance will be assessed at a quarterly rate.
Missed a Blog from Last Month?
Check Them Out Below:
Started From the Bottom Now We’re Here: Schedule Reliability Records its First Year-Over-Year Improvements
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