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Port of Virginia RECORD #’S

Norfolk, the port of Virginia, had there best results in July.
More an 293,000 TEU handled in July 21.
Or in other words an approx. 33% increase in YOY (year-over-year).

Export Containers soared up to 81,086 TEU (which means an increase by 18,2%).
Import Containers skyrocket incredible 35,3 % (!!!) to 142,963 TEU.

The empty box movement rose dramatically as well:
A significant jump of 47,3 % up to 66,842 empty TEU exported and “only” 2,254 empties imported.

Stephen A. Edwards, Virginia Port Authority CEO and executive director, looks bullish into the upcoming peak season.
While he clearly expects the numbers to rise again due to Christmas business, he is confident about continuously meeting the customers expectation and their operations.
Quote “Our performance at berth, the truck gates and rail ramps is absolutely world class.”

Positive news is also the ongoing investments into the harbor infrastructure and maintenance, which are briefly described in this article as well.

Anchored Ships

“The number of container ships at anchor outside the Port of Los Angeles is expected to rise again, with an anticipated 90% of arriving vessels next month “heading straight to the parking lot,” Seroka said yesterday.Approximately 75% of ships arriving at the port were sent to anchor in July — a 50% increase compared with June. Early August data shows 90% of arriving vessels have no alternative but to park up. The amount of time they spend once they get there held steady at about five days in July, but Seroka said that too is increasing. Average container dwell time at terminals is about 5.3 days, warehouses is 8.3 days, and rail is running over 13 days, Seroka detailed.”

2nd week Ningbo Closed

“The closure of one of the container terminals in China’s Ningbo-Zhoushan port complex is set to enter its second week with reports of continued disruptions and bottlenecks beginning to ripple across the global supply chain. However, with rumors that the terminal will soon begin a phased reopening, a new data analysis from the logistics platform project44 indicates the disruptions might not be as bad as first feared.”

Possible Collusion?

“Another Asian country is beginning to debate whether container carriers have been colluding to create today’s sky high record freight rate environment. A group of Indian exporters are gearing up to ask the Competition Commission of India (CCI) to ask it to investigate possible “cartelisation” by shipping lines. Indian exporters, like so many other nationalities, have been hit hard this year by soaring freight costs and a scarcity of available containers.”

Complexities of the Market

Another good example of the complexities of the current market.

There has been increasing criticism that carrier consolidation has led to some sort of de-facto collusion due to the dominant position of the alliances.

Here is a very good example from the Transpacific of the exact opposite. Data from Sea-Intelligence shows that the number of non-alliance services in the Pacific trade to the USWC has more than doubled now compared to before the pandemic. Non-alliance services in this trade now account for more capacity than either the 2M or THE alliances.

Hence it is clear that given the appropriate market conditions it is certainly feasible to see added competition to the alliance structures.

But whereas the injection of added capacity into a trade where demand is booming appears to be the right thing to do, it has some clear negative side-effects.  

The injection of large amounts of vessel capacity into the Pacific trade is a factor in the rapidly escalating congestion problems on the US West Coast. Cranking up vessel capacity does not automatically create added capacity related to ports, trucks, chassis, rail, warehouses etc.

Hypothetically, the carriers could have refrained from injecting this much new capacity into the Pacific. Then we could have avoided the increasing congestion we now see – but of course then carriers would be critizised for keeping capacity artifically low which in turn would create an even larger upwards price pressure.

Also, the added capacity in the Pacific comes with the “price” that capacity is pulled out of other trades around the world causing shippers elsewhere to experience blank sailings and escalating freight rates.

Transloading options

Not to self promote, but what Peter Schneider 🚛🚢🚂 is showing here is one of the reasons why shippers have been transloading to 53-foot spot dry van truckload in recent months.

Shippers are concerned about 32 vessels anchored outside the Port of Los Angeles and Port of Long Beach, then at least two weeks and often more of rail dwell on IPI (international intermodal), then more delays to get a chassis and container out of the stack in Chicago, Kansas City, Memphis, the Ohio Valley, Detroit.

Throw in trucks are cheaper than what the railroad will charge for a transloaded 53-foot box in California — unless someone like Garry Old of COFC Logistics, LLC or Mark Christos of Matson Logistics or APL Logistics has available capacity — you can understand why NVOs are telling their importers to transload to trucks in California right now.

Shippers don’t want to miss out on 3Q & 4Q sales.

I would say though Garry and Mark’s teams offer very competitive intermodal rates for shippers concerned about UP’s pricing.

Turmoil leading to wide price spreads

The turmoil in the market is leading to a significant widening of the price spread. The question “what is the spot rate” for a given trade becomes difficult to answer as it depends on when the cargo is going to move, the level of “premium service” chosen, the shipper-carrier relationship as well as the amount of surcharges included Provided, of course, that you can even get any capacity.

It is causing the different spot rate indices to also diverge significantly from each other, adding to the confusion. It is therefore important to note that the different index providers measure different things. They do not include the same customer mix, they do not include the same mix of surcharges, they do not include the same definition or inclusions of spot versus short-term contract. This is also to say that just because the indices diverge, it does not mean that one is “correct” and the others are “wrong”. But the onus is on the shipper to understand which index most closely resemble their own business mix.

Just to illustrate the differences the following is assessments from August 6 in USD/FFE:
Asia-N.Europe:
SCFI: 14.836
WCI: 13.653
FBX: 13.819
XSI: 13.663
Platts: 17.000
Additionally it appears that individual shipments have seen as much as 28.000 USD/FFE

Asia-USWC:
SCFI: 5.555
WCI: 10.322
FBX: 18.555
XSI: 6.758
Platts: 7.900
Additionally it appears that individual shipments have exceeded 20.000 USD/FFE

Freight Fact Friday-Sydney Australia

 #FreightFactFriday

Q) What exactly is an ‘intermodal’ terminal?

A) In simple terms – they’re an ‘inland port’ which enable the movement of freight from road to rail.

This means they:
🚚 Take trucks off the road
🚗 Reduce congestion
⛓️ Increase efficiency in the supply chain
💰 Mean lower cost to consumers

There are nearly 30 major intermodal terminals across Australia that facilitate the movement of import/export and interstate freight.

In partnership with Qube, the Morrison Government is delivering the Moorebank Intermodal Company Terminal in Sydney’s south-west, which will become the largest intermodal terminal and warehousing precinct in Australia.

Once complete, the project will employ an estimated 6,800 people and divert up to 3,000 truck movements off Sydney’s roads each day.

The import/export terminal for the ‘port shuttle’ to Port Botany is complete, and in May Woolworths Supermarkets announced it would build a 75,000 square metre, automated, distribution centre.

AMAZON 24/7 MINDSET

“Faced with high volumes and congestion, the largest port complex in North America needs an ‘Amazon state of mind’. And it should consider measures like round-the-clock operations, says Mario Cordero, executive director of the port of Long Beach. Long Beach handled 784,845 teu last month, an increase of 4.2% over July 2020 and Mr Cordero expects the tally to be markedly higher for the full year, projecting 10% growth in container volume.”

80 Total SSL Anchored

Around 80 container ships are now at anchor awaiting berths at US ports

The number of container ships at anchor in San Pedro Bay off the ports of Los Angeles and Long Beach rose back to 30 on July 23. There were 27 at anchor on Friday.

The all-time record — 40 — was set on Feb. 1. Beginning in mid-March, San Pedro Bay anchorage numbers gradually declined as ship arrivals were curbed, both intentionally by carriers to get schedules back on track and unintentionally because their ships fell too far behind. 

The 2021 low — nine container ships at anchor in San Pedro Bay — was hit on June 18, as fallout from the port closure in Yantian, China, further pared arrivals.

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