International Maritime
Westbound trans-Atlantic spot rates strengthen into April
Spot container freight rates from North Europe to US East Coast , in USD per FEU
USD per FEU
$ 8,000
$ 6,000 $ 1,000 $ 4,000
$ 2,000 $ 1,524
L
Impelling investment
Ocean carriers urge Panama Canal to mitigate climate effect on water levels
By Michael Angell
While demand and rate levels are improving , participants in the trans-Atlantic and Asia – US East Coast trade are closely monitoring longshore contract discussions on the US East and Gulf coasts with growing unease .
The International Longshoremen ’ s Association ’ s six-year contract with the US Maritime Alliance , which represents port terminal operators and ocean carriers , expires at the end of September ; a new agreement has yet to be reached .
“ The clock is ticking , and if no agreement is reached , then the implications will be significant and widespread disruption at US East Coast ports ,” said Peter Sand , chief shipping analyst at Xeneta .
“ This would almost certainly see rates increase for ocean freight container services and could see some shippers choosing to head back to the US West Coast or Mexico for imports ,” Sand warned in a recent market update .
email : greg . knowler @ spglobal . com
www . joc . com
$ 0 L Jul Jan 2023
Jul Jan 2024 Apr , 2024
Source : Platts , S & P Global
North Europe to US East Coast
© 2024 S & P Global
US imports from North Europe rebounding after down 2023
Containerized US imports from North Europe , in TEUs , with year-over-year change
TEU volume
200,000
150,000
100,000 |
-40 -10% |
|
111,032
100,000
|
-10% |
-20% |
50,000
Source : S & P Global
10 %
-30 %
0 |
|
|
|
|
|
|
-40% |
|
Apr
L
|
Jul |
Oct |
Jan 2023 |
Apr |
Jul |
Oct |
Jan
Feb 2024 ,
2024Apr
|
TEU Year-over-year % change
0 %
Year-over-year % change
© 2024 S & P Global
The Panama Canal ’ s ability to handle more ships in the coming months is an encouraging sign for ocean carrier executives who say the added capacity will be needed as container shipping continues to avoid the Suez Canal . Yet the liner industry is calling on Panama to invest more to mitigate the effects of climate change on the canal .
The Panama Canal Authority ( ACP ) in mid-April announced that starting in the second half of May , it would allow 31 ships to transit the canal daily , up from 24 ships each day during the first half of May . The number of ships allowed to transit will increase to 32 by the start of June .
The canal remains restricted to ships with a 44-foot depth , but more large ships will be able to transit . One additional neo-Panamax and five additional super-Panamax slots will be available by June , along with two additional slots for smaller Panamax vessels .
“ That ’ s the problem . I don ’ t want to get into a place where it ’ s a bidding cycle to get to the front of the line .”
The ACP said that better-than-expected water levels at Gatun Lake , the main reservoir for the canal ’ s locks , is behind the capacity increase . Gatun Lake currently sits at just over an 80-foot depth , which is three feet under its historical average water level for April . Gatun Lake was roughly 79 feet deep for most of the second half of 2023 , between three and seven feet under its historical average depths during those months . An El Niño weather event that started last July led to below-normal seasonal rainfall in Panama , leaving Gatun Lake well below its typical levels .
Concerns about the return of seasonal rain to refill Gatun Lake prompted the ACP to consider limiting ship transits to as few as 18 starting in February 2024 . But Panama ’ s rainfall has been better than forecasted , with up to 27 transits allowed in March , before the current 24-ship limit .
May 6 , 2024 | Journal of Commerce 17