Container Shipping Quarterly
Special Report
Asia – US spot rates peaked at $ 4,600 per FEU to the West Coast and $ 6,500 per FEU to the East Coast in February . Shutterstock . com
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Pacific Northwest 3 ( PN3 ) services in the second quarter . Both loops had been suspended during the fourth quarter of 2023 amid the downturn in volumes and rates .
Due to the diversion of ships away from the Suez Canal , transit times from Singapore to Norfolk on the EC4 will rise to 29 days , up from 25 days using the Suez routing , according to THE Alliance member Hapag-Lloyd ’ s online sailing schedules .
The longer routings around the southern tip of Africa have effectively cut global container fleet capacity by about
Asia – US volume growth accelerates through February
Containerized US imports from Asia , in laden TEUs , with year-over-year change
TEU volume
1,600,000 1,400,000 1,200,000
1,000,000
1,000,000 800,000
600,000 400,000
30 % 20 %
100 0 % %
-20 %
200,000 |
-30% |
81,714 |
-40% |
0 |
-40% |
|
Jan
L 2022
|
Jul |
Jan 2023 |
Jul |
Feb
Jan , 2024
|
Source : S & P Global
TEU Year-over-year % change
10 %
-10 %
Year-over-year % change
© 2024 S & P Global
16 %, adding yet another layer of uncertainty to service contract talks , according to Jeremy Nixon , CEO of Ocean Network Express ( ONE ).
“ The Red Sea has changed the tenor of the negotiations ,” Nixon said during the Journal of Commerce ’ s TPM24 conference in early March , adding that the longerterm impact of the diversions “ remains to be seen .”
Some major shippers have voiced concerns about longer lead times for imports as they begin restocking for spring and summer . Apparel maker Adidas is facing delays of up to three weeks on receiving products , particularly into Europe , due to the longer voyage around the Cape of Good Hope , according to CEO Bjorn Gulden .
The delays are “ actually worse than higher rates right now because there are shortages in certain of our product lines ,” Gulden said during a February earnings call . “ When you then get three-week delays , that has an impact .”
Harmit Singh , CFO of Levi Strauss , said the company was seeing increases of 10 to 14 days due to the Red Sea diversions . Levi Strauss started to bring more products into the West Coast due to longer shipping times into the East Coast , “ which is easing some of the impact ,” Singh said during an earnings call in January .
Still , with the May 1 starting date for most 2024 – 25 service contracts in the eastbound trans-Pacific less than two months away , the threat of overcapacity is not a major factor in service contract negotiations despite a large order book for new vessels .
email : bill . mongelluzzo @ spglobal . com
April 8 , 2024 | Journal of Commerce 13