Global schedule reliability has improved on a year-on-year basis for the first time since the start of the pandemic. However, six out 10 boxes are still arriving at port late while shippers are paying freight prices five times their historical average. According to the Global Liner Performance (GLP) report by Sea-Intelligence, global schedule reliability increased by 3.6 percentage points in June 2022 to 40% (see Figure 1).
The average delay for LATE vessel arrivals has dropped sharply so far this year but was unchanged M/M at 6.24 days in June (see Figure 2). Maersk remains the most reliable carrier with schedule reliability of 49.5% and Hamburg Süd with 41.4%. There were 10 carriers with schedule reliability of 30%-40% and only two with schedule reliability of 20%-30%. Wan Hai had the lowest schedule reliability at 24.8% (see Figure 3).
On the Trans-Pacific from the middle of last month, utilization rates dropped below the 90% level for the first time since mid-2020. Sea-Intelligence said this implies that capacity is finally beginning to open up. On Asia-Europe, utilization rates are back below 80%.
Sea-Intelligence noted that containership trading distances are turning negative. “When trading distances increase, this also increases the need for vessel capacity and vice-versa. During the post-pandemic period, this led to an added need for capacity, however in recent months this effect has turned negative.” The company added, “As the current market is clearly on a downwards trajectory in terms of supply/demand balance, this shift in sailing distance impact once more becomes an added element, pushing the development – this time downwards.”
Commenting on congestion issues specifically in the U.S., Peter Sand, chief analyst at Xeneta said, “Despite ongoing concerns portside, with the continued threat of industrial action from dockworkers, amongst other factors, those shipping to the U.S. West Coast will have enjoyed easing congestion of late. Fewer ships mean less pressure, and schedule reliability has now reached its highest level in over a year.” Sand observed that only 24.8% of ships are arriving on time to the U.S. West Coast – with an average delay of 9.9 days, against an average of nine days on the East Coast.
Source: splash247.com
Global air cargo volumes are steady despite being slightly lower in June 2022, according to the International Air Transport Association (IATA). As COVID restrictions in China began to be lifted, the level of decline has eased compared with recent months.
Air cargo demand was -6.4% below June 2021 levels in cargo tonne-kilometers (CTKs*), this was an improvement on the year-on-year decline of -8.3% seen in May. Capacity grew 6.7% year-over-year (y/y) and the average cargo load factor lowered by 6.9 percentage points to 49.2%, marking the first time the load factor has dropped below 50% since February 2020 (see Table 1).
IATA’s analysis noted several factors impacting air cargo performance. Trade activity ramped-up slightly in June as lockdowns in China due to Omicron were eased, while Latin America and Africa have also contributed to growth with stronger volumes. Meanwhile, new export orders, a leading indicator of cargo demand and world trade, have decreased in all markets, except China. The war in Ukraine also continues to impact the market, limiting cargo capacity used to serve Europe.
IATA director general Willie Walsh pointed out that cargo demand was ahead of 2019 levels in the first half. “Air cargo demand over the first half of 2022 was 2.2% above pre-COVID levels (first half 2019). That’s a strong performance, particularly considering continuing supply chain constraints and the loss of capacity due to the war in Ukraine. Current economic uncertainties have had little impact on demand for air cargo, but developments will need to be closely monitored in the second half.”
Source: Air Cargo News
The Port of New York and New Jersey (PANYNJ) will implement a new quarterly container imbalance fee on any long-dwelling import or export containers. The container management fee will be effective as of 1 September 2022, pending a mandatory federal 30-day notice period.
The port is looking to reduce an excess of empty containers dwelling at the port and free up space for container pickup. Instead of measuring progress by dwell time, the fee will be based on the ratio of outgoing to incoming containers moved by each ocean carrier.
Under the new rules, carriers’ total outgoing container volume must equal or exceed 110% of their incoming container volume during the same period. Failing to meet the requirement will result in a fee of $100 per container. Incoming and outgoing containers include both loaded and empty containers but excludes rail volume.
The PANYNJ has been handling a cargo increase of nearly 12% year-to-date compared to the same period last year. The volume of containers has exceeded pre-pandemic levels by 34%. Approximately 6.5% of the total April-June volume was rerouted from the West Coast. The PANYNJ said it is implementing the tariff in September in anticipation of holiday items expected to come in during peak season.
Read the press release by the Port of New York and New Jersey.
Source: American Shipper
The share of import containers moved by rail from Los Angeles-Long Beach has reached a historical low in the first four months of 2022. It has fallen from 67.9% in 2019 to 56.8% in 2021 and to 40.8% in January through April, according to the Alameda Corridor Transportation Authority (ACTA). The average number of intermodal trains serving the ports daily has also dropped from 33 in 2019 to 27 per day through June, according to ACTA.
There are indications that the congestion in rail operations is now affecting truck operations at the terminal gates. Average truck turn times has increased from 82 minutes in May/June to 86 minutes in July, according to the Harbor Trucking Association (HTA) (see Figure 1).
IATA’s analysis noted several factors impacting air cargo performance. Trade activity ramped-up slightly in June as lockdowns in China due to Omicron were eased, while Latin America and Africa have also contributed to growth with stronger volumes. Meanwhile, new export orders, a leading indicator of cargo demand and world trade, have decreased in all markets, except China. The war in Ukraine also continues to impact the market, limiting cargo capacity used to serve Europe.
IATA director general Willie Walsh pointed out that cargo demand was ahead of 2019 levels in the first half. “Air cargo demand over the first half of 2022 was 2.2% above pre-COVID levels (first half 2019). That’s a strong performance, particularly considering continuing supply chain constraints and the loss of capacity due to the war in Ukraine. Current economic uncertainties have had little impact on demand for air cargo, but developments will need to be closely monitored in the second half.”
Source: Air Cargo News
“It’s all correlated. The densification of rail containers on the terminal has a spill-over effect on the entire operation,” Noel Hacegaba, deputy executive director and COO at the Port of Long Beach said.
Rail container dwell times in Los Angeles-Long Beach have reached a high of 13.3 days in June, up from an elevated average of 11.3 days in May, according to the Pacific Merchant Shipping Association (PMSA). Gene Seroka, executive director of the Port of Los Angeles said railroads have been told by the ports for months that the long-dwelling rail containers are a major source of congestion at their marine terminals.
The railroads say they have had to meter intermodal rail volumes from Southern California so as not to overwhelm their already congested ramps in Chicago and other inland hubs. The railroads say those hubs are congested because shippers are not retrieving their inbound containers in a timely manner, noted Seroka. “Their message has been consistent,” he said. “Importers have to pick up their containers.”
Source: Journal of Commerce
