June 21 2024

June 2024 International Market Update

AN UPDATE FROM SUNSET’S INTERNATIONAL TEAM:

The following information from Sunset’s International team details 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: increases draught and daily transits.
    • The Panama Canal has announced, through an Advisory to Shipping, that it will increase the current number of daily transits from 32 to 33, effective July 11.
    • This number will increase to 34 as of July 22, following the current and projected level of Gatun Lake for the coming weeks, and due to the arrival of the rainy season in the Panama Canal Watershed.
    • With these progressive increases, by July 22 the Canal will have added two transits to the current schedule: one to the Panamax locks (raising the daily transits to 25), and one to the NeoPanamax locks (increasing daily transits to 9). Additionally, an increase in draught from 13.71 meters (45 ft.) to 13.02 meters (46 ft.) was announced, effective June 15.
    • The Panama Canal said it continues to monitor weather conditions daily in order to implement the necessary operational actions in the event of increased rainfall in its watershed.
  • Red Sea / Suez Canal: Cargo ship hit by missile in Gulf of Aden in suspected attack by Yemen Houthi rebels.
    • Missile attacks by Yemen’s Houthi rebels struck two ships in the Gulf of Aden, authorities said Sunday, the latest assaults on shipping in the region.
    • One anti-ship ballistic cruise missile hit the Antigua- and Barbuda-flagged cargo ship Norderney forward station late Saturday, starting a fire that those on board put out, the U.S. military’s Central Command said. It added that a second anti-ship cruise missile also hit the Norderney.
    • The British military’s United Kingdom Maritime Trade Operations center similarly reported the attack and fire in the same area off Aden, saying “damage control is underway.”
    • Houthi military spokesman Brig. Gen. Yahya Saree claimed the attack in a prerecorded video message Sunday, saying the vessel had been targeted with both missiles and drones. Tracking data analyzed by The Associated Press showed the Norderney was still in the Gulf of Aden on Sunday afternoon.
    • In a second attack, a Houthi ballistic missile hit the Tavvishi, a Liberian-flagged, Swiss-owned-and-operated container ship in the Gulf of Aden, Central Command. Saree claimed the attack happened in the Arabian Sea, but provided no evidence. Tracking data suggested the Tavvishi was in the Gulf of Aden at the time of the attack.
  • Canadian Rail Strike still looms:
    • According to The Loadstar, the recent meeting between the Teamsters union (TCRC) and Canadian National Railway (CN) was abandoned less than halfway through, as the parties refuse to see eye-to-eye.  Rail workers at CN and Canadian Pacific Kansas City (CPKC) were set to strike on 22 May, but a request from the government for the Canada Industrial Relations Board (CIRB) to “review if a strike could endanger public safety” put this on pause.  The CIRB process does not impact continued bargaining, and early June TCRC and CN planned three days of meetings with the participation of the Federal Mediation and Conciliation Services. 
    • However, the union announced on Friday: “Unfortunately, after only the first day of meeting, we could only realize that CN had no intention of discussing or even considering our demands… Given this reality, it was decided not to continue for the other two days.” The union’s proposal was rejected by both train operators.
    • CN announced it offered TCRC to enter “binding arbitration”, that would see a mutually agreed independent arbitrator evaluate the demands of each side and decide on the terms of the new collective agreement.  But this process was rejected by the union. 
    • The union has made clear it will strike at its earliest opportunity, pending the CIRB decision, but it must give 72-hours’ notice. CN advised that a work stoppage was “unlikely” before mid-to-late July, but due to the unknown CIRB timeline, nothing was certain. 
  • Port of Los Angeles RAIL DELAYS – Operations Report:
    • Terminal operators at the ports of Los Angeles and Long Beach are working to reduce a backlog of rail containers that have accumulated during two consecutive months of strong imports and are urging the railroads to send more cars to the ports to help them finish the job. 
    • On average we are seeing 12–14-day delays being reporting.
  • U.S. International Trade in Goods and Services: April 2024
    • April 2024: -$74.6B
    • March 2024: -$68.6B
    • According to the U.S. Bureau of Economic Analysis and the U.S. Census Bureau, the deficit increased from $68.6B in March (revised) to $74.6B in April, as imports increased more than exports. The goods deficit increased +$5.9B in April to $99.2B.
    • The services surplus decreased -$0.1B in April to $24.7B.

STABILITY

  • May 2024 U.S. container import volume continued its robust 2024 growth, increasing 6.2% from April and 11.9% when compared to the same month last year.
    • Versus May 2023, TEU import volume was up 11.9%, continuing to demonstrate exceptional year-over-year performance.
    • May 2024 U.S. container import volumes moved up from April 2024, increasing 6.2% to 2,346,382 twenty-foot equivalent units (TEUs).
  • Imports from China had another strong month, reaching the second highest monthly volume since January of 2023. Port transit delays continue to improve across the board as there has been little impact on East and Gulf Coast import volumes from either the Panama drought or the Middle East conflict.
  • Schedule reliability reversed its improving trend and declined by -2.5 percentage points M/M in April 2024.
    • This figure is now only 0.6 percentage points higher than the lowest YTD point of January 2024.
  • On a Y/Y level, schedule reliability in April 2024 was -12.1 percentage points lower. However, the average delay for LATE vessel arrivals improved by -0.31 days M/M to 4.74 days. This figure is now closer to the pre-pandemic lows than the pandemic highs.
  • On a Y/Y level, the April 2024 figure was 0.40 days higher

Future Lookouts

  • Weekly analysis: June 14, 2024
    • Across major East-West head haul trades – Transpacific, Transatlantic and Asia-North Europe & Med:
      • 46 cancelled sailings have been announced between week 25 and week 29 (July 15-21), out of a total of 661 scheduled sailings, representing a 7% cancellation rate. 
      • During this period, 57% of the blank sailings will occur on the Transpacific Eastbound, 30% on the Asia-North Europe and Med, and 13% on the Transatlantic Westbound trade.
      • Over the next five weeks, OCEAN Alliance have announced 14 cancellations, followed by 2M and THE Alliance with 8 and 7 cancellations, respectively. During the same period, 17 blank sailings have been implemented by non-Alliance services.
      • The shipping industry is once again grappling with supply-demand imbalances, port congestion, and container shortages reminiscent of what has been experienced during the pandemic. However, this time the disruptions are generated by the unfolding Red Sea crisis.