Record Drop for U.S. Container Import in February

According to the McCown report covering the top ten U.S. container ports, import throughput in February fell -28% to 1,454,438 TEU, due to weak demand compounded by an early Chinese New Year in 2023.

Ports on the West Coast experienced the worst drop at -37%. Imports at U.S. East and Gulf Coast ports declined by -18.7%. Houston port was the exception, recording an increase of 12.7% year-on-year.

Furthermore, the ongoing coastal shift to the East and the unresolved West Coast labor negotiations also impacts West Coast ports. The port of Los Angeles recorded a -41.2% collapse in container imports, moving down in import rankings to third position, behind New York/New Jersey and Long Beach. “The demand is just not there,” Port of Los Angeles’ executive director, Gene Seroka, said.

Additionally, there has been a significant drop in empty equipment being shipped back to Asia. The port of Los Angeles processed 156,035 TEU for export during the month, versus 338,251 TEU a year ago, further evidence of a global slowdown.

Meanwhile, U.S. exports recorded an overall 4.6% increase to 789,037 TEU in February, for a trailing three-month gain of 8.7%. According to the McCown report, the ports with the most robust export performance in February were Houston, up 41.7%; Charleston, up 12.2%; and Norfolk, up 8.8%. Conversely, the port with the weakest export performance was Los Angeles, down by -13.7%, followed by Oakland, with a drop of -9.4%.

Source: The Loadstar

Surplus Capacity on Key Trades Weakens Air Cargo Market

The economic headwinds the Asia-Pacific region faced last year are beginning to ease, said the International Monetary Fund (IMF). The developments are improving prospects across the region, making it “by far the most dynamic of the world's major regions", the IMF noted, adding that growth is set to accelerate to 4.7% this year from 3.8% in 2022.

The region’s emerging and developing economies which are set to expand by 5.3% in 2023 is a driving factor.“China and India alone are expected to contribute more than half of global growth this year, with the rest of Asia contributing an additional quarter. Cambodia, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam are all back to their robust pre-pandemic growth,” said the IMF.

Trans-Pacific rates are down -30% y/y, but almost 40% above those recorded in March 2019, according to the Baltic Air Index (BAI). China-Europe rates are down -17% y/y but 30% higher than in March 2019. Trans-Atlantic Westbound is down -25% y/y but up 30% versus 2019.

Passenger connections are expanding to serve the rapidly growing travel market. Most international airlines are announcing increases in long-haul passenger flights ahead of the International Air Transport Association (IATA) summer schedule that begins in the last week of March.

The reactivation of aircraft for the summer follows the easing of China’s pandemic measure late last year. Given the size of China’s travel and freight markets, airlines will likely include the country in most new passenger and cargo schedules.

Source: Journal of Commerce

Shippers Fear Maritime’s Green Energy Goals will Hike Freight Costs

Shippers have raised concerns that maritime discussions on decarbonization will result in "the mother of all BAFs" as carriers seek to pass on the costs of using sustainable fuels to shippers.

The International Maritime Organization (IMO) is widely expected to raise its goal of reducing carbon emissions by another 50% to reach 100% by 2050 when it meets in July. It will also discuss market-based measures such as a carbon levy.

The costs of decarbonization are challenging to estimate, Drewry Shipping Consultants director Philippe Damas stated in a LinkedIn discussion on the EU Emissions Trading System. “It is still very difficult to estimate the exact costs of the new environmental regulations: as noted by the ITF in its report on carbon pricing in shipping, as this would largely depend on market conditions and bunker fuel price over time,” he said.

According to James Hookham, director of the Global Shippers' Forum (GSF), discussions for market-based measures pose a clear risk that shipping lines will pass on any tax directly to their customers via a bunker adjustment factor (BAF).

“What we will have is the mother of all BAFs. Carbon taxes won’t work unless there is a penalty on the carriers too, they cannot be allowed to simply pass on those charges,” said Hookham. He added that introducing low-sulphur fuel regulation three years ago saw the costs borne by shippers and not by carriers. “We’ve been burned like that before,” he noted.

Freight forwarders are in a similar position. According to CLECAT’s director general, Nicolette van der Jagt, lines should pay for the carbon they use and not their customers. “Shippers will pay more, and the cost of shipping will increase – that’s a no-brainer – but the type of fuel used by the carrier is their choice, so any carbon tax should be borne by the line,” she said.

Source: The Loadstar

Dispute Disrupts Port Operations at Los Angeles-Long Beach

Some marine terminals at Los Angeles and Long Beach ports have been unable to operate continuously. Since the middle of last week, Local 13 of the International Longshore and Warehouse Union (ILWU) has stopped taking “staggered shifts” during lunch hours.

The Pacific Maritime Association (PMA) said that the action was causing extensive delays. “As a result, longshore workers at the Ports of LA and Long Beach are not working the terminals between 12 pm-1 pm and 10 pm-11 pm, creating significant delays,” PMA said in a statement. “Because the contract is not in place, there is no option for PMA to arbitrate the matter and require the union to man the terminals continuously without interruption.”

Neither the PMA nor ILWU have commented on the manning issue causing the job action. However, PMA's statement noting that ILWU Local 13 had stopped observing staggered lunch hours, suggests the disruptions in Southern California are not being directed by ILWU’s international leadership.

ILWU International President Willie Adams said longshore workers in Los Angeles and Long Beach work daily according to terms agreed upon with the PMA. “Terminal operators, however, open and close their gates at will,” Adams said.

Meanwhile, the West Coast’s share of imports from Asia continues to decline as shippers divert discretionary cargo to the East and Gulf coasts. PIERS data shows the percentage of Asian imports landing on the West Coast in February slipped to 53.2%, from 54.5% in January and 60.4% last May when ILWU-PMA contract talks began.

ILWU and PMA negotiations are in their tenth month. Some issues, such as health benefits, have been resolved, but agreement on core issues such as automation, wages, and pension benefits still needs to be reached.

Source: Journal of Commerce

Union Strike Closes Germany’s Hamburg Port

Labor action at the Port of Hamburg has shut down vessel movements for 48 hours because of a strike announced by the German union Ver.di over wages.

Discussions between the unions and employers are due to take place over three days beginning 27 March, but the strike is expected to continue until 24 March.

The Hamburg Port Authority (HPA) has closed the port to large ships in response to the strike. “Due to the massive restrictions to be expected from the announced warning strikes, the administration has decided to block the Elbe for ships requiring pilotage from around 10.00 am today [22 March] until further notice,” a spokesperson for Hamburg Port Authority said.

According to the latest information, about 18 ships bound for Hamburg are affected by the closure.

Source: Port Technology

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