April 2024 International Market Update

AN UPDATE FROM SUNSET’S INTERNATIONAL TEAM:

The following information from Sunset’s International team details the current International market conditions. Customer communication is vital with the instability of international trade. 

Sunset is here to help with the most basic or complex shipments.  Email [email protected] to speak further about how to manage any International needs that arise.

Ocean Industry

• Panama Canal:
  • The end of Panama’s dry season is in sight, and the Panama Canal Authority (ACP) plans to welcome more vessels in the coming weeks.
  • Over six months since the Panama Canal’s reservoir system suffered from the driest October in at least 73 years, the ACP finally sees a path to normalizing operations. On March 25, the ACP allotted three additional transit slots to Panamax vessels, bringing the total number of reservations to 27 per day.
  • A recent downpour was gladly received by the man-made Gatun Lake, from which the canal gets its supply of water.
  • Traffic has seen an uptick in the past few days, per data from Clarksons. Transits are currently at 60% of where they were in 2022, a year in which conditions were more or less normal. Transits of product tankers and container ships have almost fully recovered, with both types trending near 90% of normal activity.
  • While the ACP is careful to stress that all of its plans are ultimately contingent on the weather, it is optimistic that canal operations will return to normal by 2025.

• Red Sea / Suez Canal:
  • The past several weeks have seen an increase in attacks on shipping in the Red Sea, and a Houthi spokesperson has sparked fears of the ‘danger area’ expanding into the Arabian Sea.  
  • Eight consecutive days of attack-free shipping in the Red Sea, between March 23 and April 1, marked the longest quiet streak since December, when containerships began diverting around the Cape of Good Hope.  However, in the past week, UK Maritime Trade Operations (UKMTO) has confirmed two attacks on vessels, 111km south-west of Al Hudaydah, Yemen.  
  • UKMTO said, “the master of a vessel has reported two missiles in the vicinity. The first was intercepted by coalition forces, the second impacted the water a distance from the vessel. The vessel reports no damage, and the crew is reported safe. The vessel is proceeding to next port of call.” (Source)

• Trans-Pacific Eastbound (TPEB):
  • The situation is stable on both the East Coast and West Coast with isolated congestion due to Baltimore port closures.
  • Savannah: Waiting time for vessel berth at the terminal is up to 6 days, depending on the size of the vessel.
  • New York: There is no expected waiting time for berths at Maher Terminals LLC and APM Terminals. However, a 4-day waiting time can be expected at Port Liberty Terminal Bayonne.
  • LA/LB: No vessels at anchor, berth on arrival conditions. Dwell averaged 10 days on IPI.
  • Oakland: Average wait time at Oakland Int’l Container Terminal (OICT) is up to 6 days, and 5 days at TraPac.
  • No waiting times at Husky, 4 days at Washington United terminal at Tacoma, 2 days at Seattle.
  • Vancouver: All marine terminals are facing heavy congestion, resulting from an inadequate supply of rail cars from major Class 1 railways.

• Trans-Pacific Westbound (TPWB):
  • Persistent Panama Canal drought conditions coupled with elongated transit times from carriers moving via the Cape of Good Hope have led to increased demand for services moving via U.S. West Coast ports. The potential for labor disputes due to ILA labor negotiations has further pushed volumes west.
  • Transshipment hubs in Asia have been experiencing congestion issues, with cargo being delayed for as many as 10-14 days. 

• Transatlantic Eastbound (TAEB):
  • The ongoing weakness and depressed volumes of TAWB is causing greater overcapacity issues on TAEB. 

• U.S. International Trade in Goods and Services: February 2024
  • February 2024: -$68.9B
  • January 2023: -$67.6B

STABILITY

• March 2024 U.S. container import volumes remained mostly flat from February 2024, increasing only 0.4% to 2,145,341 twenty-foot equivalent units (TEUs). Versus March 2023, however, TEU volume was higher by 15.7%, and up 20.6% from pre-pandemic March 2019, demonstrating that YoY performance remains strong. 
• For the top 10 U.S. ports, container import volume in March 2024 was down marginally by 6,180 TEUs (-0.3%) versus February 2024.
• The ports of New York/New Jersey (15,295 TEUs), Norfolk (6,819 TEUs), and Tacoma (8,592 TEUs) experienced the greatest container volume increases from February.
• The ports of Los Angeles (-31,997 TEUs) and Baltimore (-6,829 TEUs, influenced partially by the collapse of the Francis Scott Key Bridge near the end of March) posted the most significant decreases, with Baltimore representing the largest decrease by percentage (-15.7%). This is the second continuous month where Los Angeles has posted a ~30,000 TEUs decline in month-over-month volume. 

• After a tumultuous few weeks in the wake of the Red Sea crisis, some form of stability has ensued, with the round-Africa routings now normalizing. This was also reflected in the February 2024 global schedule reliability score, which improved by 1.7 percentage points M/M to 53.3%.
  • However, on a YoY level, schedule reliability was -6.9 percentage points lower. The average delay for LATE vessel arrivals also improved to 5.46 days, roughly the same level as pre-Crisis, which means that the increase due to the crisis has reverted.

Future Lookouts

• Weekly analysis: April 12, 2024
  • Across major East-West head haul trades – Transpacific, Transatlantic and Asia-North Europe & Med:
    • 46 cancelled sailings have been announced between week 16 (April 15-21) and week 20 (May 13-19), out of a total of 645 scheduled sailings, representing a 7% cancellation rate. 
    • During this period, 41% of the blank sailings will occur on the Transpacific Eastbound, 37% on the Asia-North Europe and Med, and 22% on the Transatlantic Westbound trade.