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Hangzhou Asian Games - September 23, 2023 - October 8, 2023

AIR

• The air market is stable, with space generally available for air export. On the import side, there are pockets of congestion, but nothing out of the ordinary. Some carriers are implementing an increase in fuel and other surcharges. We expect to see some seasonal change beginning in October ahead of the upcoming holiday season.

OCEAN

ILWU and PMA reached a contract agreement:

With a 75% majority, the International Longshore and Warehouse Union (ILWU) ratified a 6-year contract with the Pacific Maritime Association (PMA). The contract will retroactively start on July 1, 2022 (when the previous contract expired) and extend through July 1, 2028. The ratification comes at the end of a 13-month process, including labor actions and fears of a strike that could have severely hampered the U.S. supply chain.

TPEB: Carriers are still voiding sailings

Due to a slowdown in volumes, most steamship lines (SSLs) are voiding sailings and reducing capacity to bring demand to level the space available, which is starting to pay off as rates have gone up due to current vessels in service being full. This trend will likely continue for the rest of this year as long as the carrier's space control is maintained, otherwise, rates might fall again.

Panama Canal: Panama Canal extends transit restrictions

The Panama Canal Authority has advised its clients that restrictions on the number of daily vessel transits and maximum draft might remain in place for another ten more months as water levels in the Gatun Lake remain low due to prolonged drought.

The El Niño weather phenomenon is likely to bring more dry weather. While the first measure did not significantly impact container services using the Panama Canal, the draft restrictions prevented the carriers from fully using their ships' capacity.

At the end of last week, 124 merchant vessels were queuing up at both sides of the Canal for transit. Despite some media reports that the Panama restrictions could delay inventory restocking in the U.S. for the Christmas shopping season, the constraints have no serious impact on the Asia-US East Coast trade. Daily transits have been reduced from 36 to 32, with ten passage slots reserved for the big locks and 22 for the old locks. Only eight slots per day are available for vessels that arrive without reservation.

Liner operators, however, always reserve their transits ahead of time and prioritize passing the many bulkers and tankers waiting in the anchorages on both sides of the waterway. The only restraint for big neo-Panamax ships is the draft restriction of 44 feet (13.41 meters), down from 50 feet in normal circumstances. This draft limitation forced the 15,432 twenty-foot equivalent unit (TEU) EVER MAX to discharge 700 forty-foot equivalent unit (FEU) in Balboa on its maiden trip earlier this month and transit the Panama Canal with 13,345 TEU aboard (43' draft). A two-meter draft restriction means big ships cannot use 1,500 to 2,000 TEU of their maximum capacity. Carriers such as Maersk or Hapag-Lloyd said that the effect is not immaterial but not huge. Both carriers said there are currently no delays in the schedule due to Panama transits. The effect of the Panama restrictions on ocean freight rates is yet to be determined.

Click on the link below for more information on ocean!

September U.S. Port and Rail Status Update