Market Update: May 15, 2024

Ocean Freight Market

Transpac availability remains limited with bookings approx.3 weeks in advance and conditions are expected to continue throughout June. Carriers leveraged the capacity crunch to implement a Peak Season Surcharge and will likely implement GRI and PSS on June 1. Amid the recent uptick in demand, MSC has announced “Diamond Tier premium” for guaranteed space and other carriers are likely to follow suit.

Unions in ports Montreal and Vancouver have indicated possible strike action to begin May 22. The workers voted to strike if a labor deal is not made with strong indicators for possible negotiations. The unions have been without a contract since December 21, 2023. BC Maritime Employers Association (BCMEA) and International Longshore and Warehouse Union Ship & Dock Foremen (ILWU) continue to negotiate to resolve the issue before the strike date. Canada’s Minster of Labour asked the Canada Industrial Relations Board (CIRB). A determination could prevent a strike or lock-out due to health & safety concerns.

Trans-Pac General Rate Increases (GRI)

• May 15 PSS announced and implemented in full.

• June 1 GRI announced and likely.

• June 15 PSS announced.

Airfreight Market

As summer travel ramps up, airlines warn to plan for passenger effects to take priority over booked cargo. Rates remained steady, however coming months could see increases as passenger travel ramps up. Spot markets remained steady.

Civil Aviation Department of Hong Kong announced cargo fuel surcharge will increase effective June 1 2024.

Holiday Notices

• Hong Kong: (Labor Day) Offices closed May 1. Normal hours to resume May 2. (Buddha’s Birthday) Offices closed May 15. Normal hours to resume May 16.

• China: (Labor Day) Offices closed May 1 through 5. Normal hours to resume May 6.

• Taiwan: (Labor Day) Offices closed May 1. Normal hours to resume May 2.

• Malaysia: (Labor Day) Offices closed May 1. Normal hours to resume May 2. (Waisak Day) Offices closed May 22. Normal hours to resume May 23.

• India: (Labor Day) Offices closed May 1. Normal hours to resume May 2.

• Indonesia: (Labor Day) Offices closed May 1. Normal hours to resume May 2. (Ascension Day) Offices closed May 9 & 10. Normal hours to resume May 11. (Waisak Day) Offices closed May 23 & 24. Normal hours to resume May 25.

• Korea: (Labor Day) Offices closed May 1. Normal hours to resume May 2. (Children’s Day) Offices closed May 6. Normal hours to resume May 7. (Buddha’s Birthday) Offices closed May 15. Normal hours to resume May 16.

• Philippines: (Labor Day) Offices closed May 1. Normal hours to resume May 2.

• Thailand: (Labor Day) Offices closed May 1. Normal hours to resume May 2. (Coronation Day) Offices closed May 6. Normal hours to resume May 7. (Visakha Day) Offices closed May 22. Normal hours to resume May 23.

• Vietnam: (Labor Day) Offices closed May 1. Normal hours to resume May 2.

• United States: (Memorial Day) Offices closed May 27. Normal hours to resume May 28.

The U.S. Market

Overview

International Longshoreman Association (ILA) President issues statement of confidence on the upcoming contract negotiations. Tentative local contract negotiations were completed on schedule, allowing for Master Contract talks to proceed.

Maryland transportation officials announced the Francis Scott Key Bridge is anticipated to be rebuilt by Fall 2028. Local Port Authority of Baltimore announced cargo stranded in the terminals of Baltimore will begin processing around the end of May.

US Lawmakers urged the Biden administration to a “swift conclusion” to the ongoing review of the Section 301 tariffs. The review aims to study the impacts of the Section 301 tariffs and effectiveness implemented by prior administration. In 2022, the US Trade Representative opted to extend the tariffs while investigation of impact of the additional tax, including effects on US consumers, manufacturers, workers, technology, and supply chains. The Section 301 tariffs are slated to expire at the end of May.

• USWC: Congestion and higher volumes reported. Estimated 7 days needed for vessel to rail transfer. Reduced operations at Portland’s terminal 6 underway and the port has announced plans to shutter its only container terminal this October, which certainly effect PSW trade lanes.

• USEC: Congestion reported in ports with Baltimore diverted traffic. Congestion expected to continue indefinitely.

• USMW: Good conditions reported, volume increases reported.

• USSW: Good conditions and low congestion and lower volumes reported.

Janel Group continues to closely monitor the market and port situation. Updates will be provided as they come available. To secure a booking or explore additional options for your supplier, please reach out to your Janel Group Representative.

APHIS Announces Process Change for Precleared Shipments from Selected Countries

CSMS # 60496390 - APHIS Announces a Process Change to Invoke Certificate of Foreign Inspection and/or Treatment (PPQ Form 203) for Precleared Shipments from Selected Countries.

Starting May 10th, 2024, the US the U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) will roll out use of APHIS Core Message Set for Certificates of Foreign Inspection and/or Treatment (PPQ Form 203, LPCO type code A07) for air shipments of precleared commodities from Chile, air shipments of precleared commodities from Thailand, and both air and maritime shipments of precleared commodities from Argentina.

This process improvement facilitates commodity inspections and expedites trade. Additionally, it creates an electronic database—for Certificates of Foreign Inspection and/or Treatment—that can be invoked by filers and accessed by Customs and Border Protection (CBP) Agriculture Inspectors through the Automated Commercial Environment (ACE) Document Image System (DIS).

APHIS will continue to send stakeholder announcements as the PPQ203 is phased in for different international preclearance locations and commodities.

Importers must provide a PPQ Form 203 to their Customs Broker when Importing:

• Air shipments of precleared commodities from Chile.

• Air shipments of precleared commodities from Thailand

• Air and Ocean shipments of precleared commodities from Argentina

PPQ Form 203

For assistance and additional questions, please reach out to Janel Group's Compliance Team:

Sean McClung

Director of Trade Compliance

Jodi Blitz

Senior Compliance Analyst

Market Update: May 1, 2024

Ocean Freight Market

Carrier blank sailings to the US West Coast hit over 20% of total trade capacity. Meanwhile, demand surged in final weeks of April in preparation of a weeklong holiday and closures in China. As reduced capacity failed to meet increased booking needs, FAK rates remained steady through April and had full implementation of a May 1 GRI. Our partners project a June 1 increase via PSS/GRI is likely as the delta between FAK & contract rates is now quite significant. Ningbo and Shanghai ports reported shortages of container equipment. As carriers reintroduce services, and rebalance equipment, spot market conditions are expected to improve in the coming weeks. Recovery of retail markets in the USA cast a hopeful light on the remainder of the year.

Panama Canal Authority report rising water levels in the Gatun Lake, a crucial source of water for the canal. Operations of the canal have already begun to allow more vessels. As water levels continue to recover in the lake, it is projected Panama Canal routings to become more stable and allow for regular transit times. Suspended loops utilizing the canal are expected to return to full service.

Trans-Pac General Rate Increases (GRI)

• May 1 GRI announced and implemented in full.

• May 15 PSS announced but unclear.

• June 1 GRI announced.

• June 1 PSS announced.

Airfreight Market

Air rates remained steady through the end of April and into May. Steady e-commerce and retail demand stabilized the market despite geo-political factors. It is expected air rates will increase post-holiday as delayed shipments dominate bookings.

Holiday Notices

• Hong Kong: (Labor Day) Offices closed May 1. Normal hours to resume May 2. (Buddha’s Birthday) Offices closed May 15. Normal hours to resume May 16.

• China: (Labor Day) Offices closed May 1 through 5. Normal hours to resume May 6.

• Taiwan: (Labor Day) Offices closed May 1. Normal hours to resume May 2.

• Malaysia: (Labor Day) Offices closed May 1. Normal hours to resume May 2. (Waisak Day) Offices closed May 22. Normal hours to resume May 23.

• India: (Labor Day) Offices closed May 1. Normal hours to resume May 2.

• Indonesia: (Labor Day) Offices closed May 1. Normal hours to resume May 2. (Ascension Day) Offices closed May 9 & 10. Normal hours to resume May 11. (Waisak Day) Offices closed May 23 & 24. Normal hours to resume May 25.

• Korea: (Labor Day) Offices closed May 1. Normal hours to resume May 2. (Children’s Day) Offices closed May 6. Normal hours to resume May 7. (Buddha’s Birthday) Offices closed May 15. Normal hours to resume May 16.

• Philippines: (Labor Day) Offices closed May 1. Normal hours to resume May 2.

• Thailand: (Labor Day) Offices closed May 1. Normal hours to resume May 2. (Coronation Day) Offices closed May 6. Normal hours to resume May 7. (Visakha Day) Offices closed May 22. Normal hours to resume May 23.

• Vietnam: (Labor Day) Offices closed May 1. Normal hours to resume May 2.

• United States: (Memorial Day) Offices closed May 27. Normal hours to resume May 28.

The U.S. Market

Overview

Port of Baltimore opened a third option to carriers to allow barge access to terminals. Depth of available options to Baltimore’s terminals remain too shallow to allow for container vessel access. Surrounding ports continue to support Baltimore as carriers focus on rerouting sailings during bridge repairs. The US Department of Transportation has coordinated efforts with local port authorities to mitigate supply chain disruptions.

International Longshoreman Association (ILA) President announced the union would not work beyond the contract expiration. The union president set a deadline of May 17 to address local issues as a preliminary step towards a broader agreement. It remains unclear if a new deal will be completed before the contract’s September expiration. Those close to the negotiations predict labor issues are unlikely.

• USWC: Congestion and higher volumes reported. Estimated 7 days needed for vessel to rail transfer.

• USEC: Congestion reported in ports with Baltimore diverted traffic. Congestion expected to continue indefinitely.

• USMW: Good conditions reported, volume increases reported.

• USSW: Good conditions and low congestion and lower volumes reported.

Janel Group continues to closely monitor the market and port situation. Updates will be provided as they come available. To secure a booking or explore additional options for your supplier, please reach out to your Janel Group Representative.

Market Update: June 1, 2022

Ocean Freight Market

Overview

Blank sailings via USWC continue to downtrend while USEC blank sailings ramp up. Congestion takes a toll at NY/NJ and Shanghai ports. Despite Trans-Pac trade entering the traditional peak season in June, volumes remain underwhelming as the mitigating elements of worldwide inflation, retail import tapering, Shanghai’s lockdown, and transpacific capacity growth take effect. Shanghai’s much-anticipated re-opening could prove to be the boost that carriers need for a more comprehensive application of Premium rates, but this is yet to be seen.

China Lockdown Update

Our partners advise of a gradual reopening in Shanghai, via public transportation, and places of business in Shanghai are expected June 1. South China’s demand remains stagnant as SE Asia suffers from a lack of capacity and equipment. Meanwhile, although exports remain fluid to a degree, intra-Asia feeder networks and container distribution remain severely compromised, creating vastly different market conditions around the region.

General Rate Increases (GRI)

June 1 GRI implemented with further June 15 increases likely.

Holiday Notices

• Hong Kong: (Dragon Boat Festival) Offices closed June 3. Normal hours to resume June 4.

• China: (Dragon Boat Festival) Offices closed June 3 through 5. Normal hours to resume June 6.

• Taiwan: (Dragon Boat Festival) Offices closed June 3. Normal hours to resume June 4.

• Thailand: (Queen’s Birthday) Offices closed June 3. Normal hours to resume June 4.

• Cambodia: (Queen’s Birthday) Offices closed June 18. Normal hours to resume June 19.

• Indonesia: (Pancasila Day) Offices closed June 1. Normal hours to resume June 2.

• Korea: (Election Day) Offices closed June 1. Normal hours to resume June 2. (Memorial Day) Offices closed June 6. Normal hours to resume June 7.

• Malaysia: (Yang di-Pertuan Agong's birthday) Offices closed June 6. Normal hours to resume June 7.

• Philippines: (Independence Day) Offices closed June 12. Normal hours to resume June 13.

• Vietnam: No June Closings.

• India: No June Closings.

Airfreight Market

Overview

Despite lockdowns across China, air freight exports continue to pick up steam. As lockdowns ease in China, a spike in bookings is anticipated. Massive backlogs of freight once planned for ocean shipping are expected to be booked air in the coming weeks. Additional demand driven by the upcoming Dragon Boat Festival in China is also expected to impact booking needs.

The U.S. Market

Overview

U.S. Export booking and space issues are rising to rival import issues that have been frustrating shippers for the last 2 years. Equipment shortages and rolled bookings are the issue of the day for US exports, specifically reefer containers out of the Mid-West. Congestion continues to trend down as LA/LB seeing the lowest time at birth in 2022. Signal reporting shows average berth times at 14 days and 6.1 days as of the time of writing 6/1/22. A slight uptick in blank sailings to the US East Coast where congestion is growing worse has impacted the availability of direct-call capacity in ports such as Cai Mep, Vietnam. News that the International Longshoremen & Warehouse Union (ILWU) is seeking a break in negotiations over its soon-to-be expiring contract on July 1st with the Pacific Maritime Association (PMA) will likely spur greater demand for capacity to US East Coast ports as shippers to keep a wary eye on negotiations. Due to the high-profile nature of this year’s negotiation and the direct involvement of the current administration, the outlook for negotiations is positive. As reported by JOC - marine terminal operators in the Port of New York and New Jersey are planning new capacity for ultra-large container ships once new dredging is approved which would make New York-New Jersey one of the deepest seaports on the US East Coast.