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International Monthly Market Update

The latest on requirements, carrier announcements, port operations, and customs updates from around the world.

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Contianer ships in logistics port

Published 2/5/2024

INTERNATIONAL MONTHLY MARKET UPDATE

February 2024

Over the last few weeks, mass diversions of container ships are now rerouting around Africa’s Cape of Good Hope. Carriers sent a notice that transits through the Red Sea should stop altogether due to the heightened security risk. Safety for the crews is their number one priority. As carriers adjust their schedules to longer routes, the Chinese New Year’s decreased demand will help keep vessels moving. Below is a snapshot released by Marine Traffic at the end of January showing current container ships routing around Africa.Marine Traffic contianer ship locations

Source: FreightWaves

With the continued attacks in the Red Sea, rates over the last month have almost doubled. According to the Drewry, the average cost of a 40ft container rose 23%. The increases are not limited to the disrupted trade routes between China and Europe. Spot market rates from China to Los Angeles rose 38% in just one week in January.Drewry weekly World Container Index

Source: Wall Street Journal

The Federal Maritime Commission (FMC) will hold an informal hearing on February 7, 2024. They will examine how conditions in the Red Sea and Gulf of Adens regions impact commercial shipping and global supply chains.

FMC also announced that Transpacific Eastbound Carriers have recently updated their respective tariffs to implement general rate increases (GRIs) effective February 15 and March 1. The carrier list includes CMA CGM, COSCO, Evergreen, Hapag, HMM, ONE, Yang Ming, and ZIM. The rate increase averages $1000 to $2000 per date for each carrier.

Panama Canal

Container ship in Panama Canal

News posted on the Panama Canal continues to decline. Transits dropped another 4.7% in December, with an overall 21.9% decline since October. Panama has entered its dry season, which has been extended to May this year. Reservations were further restricted by the Panama Canal Authority (ACP). Data shows the locks averaged 17.42 transits daily, down 37% from last year.ACP Average daily transits via Panamax

 Source: FreightWaves

Port News

  • Long Beach is seeing berthing delays as vessels bunch up due to late arrivals.
  • Wait times in Houston have increased recently to 3 to 5 days, as the port has several cranes under repair.

Rail

One year after the massive derailment in Ohio, Norfolk Southern is the only Class I railroad to join a Federal Railroad Administration safety program. NS President and CEO Alan H. Shaw stated that the company is committed to setting the gold standard for rail safety. The goal is to foster an environment where safety concerns can be reported without workers fearing losing their jobs. It encourages employees to report any "close call" incidents to keep safety at the forefront.

Customs

Some highlights from CBP’s December 2023 monthly update include:

    • CBP continues to lead in eliminating goods made with forced labor from the supply chain. In December, CBP stopped 450 shipments valued at more than $187 million.
    • CBP seized 1291 shipments that contained counterfeit goods valued at more than $86 million.
    • Ocean imports were up in December, accounting for 41% of the total import value; CBP processed more than 2.6 million entry summaries valued at more than $260 billion, with estimated duties being nearly $6.3 million.

  • CBP is modifying the timing of the automatic release message for non-express air cargo effective January 27 to give CBP sufficient time to review entries and notify the filer of holds.
  • FMC has ruled that starting February 1, Common Carriers and Conferences must provide public access to their tariff publication systems free of charge.

The international team is here to help with your logistic needs! Making Logistics Happen! international@il2000.com

Sources: Wall Street Journal, Drewry Shipping Consultants, Distribution Publications, Maersk, Freight Waves, Maersk, CBP.gov, customsandinternationaltradelaw.com

 

International Market Update February 2024 cover

Past International Market Reports

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International Port photo Jan 24 small

Published 1/4/2024

INTERNATIONAL MONTHLY MARKET UPDATE

January 2024

As we head into the new year, the looming drought and delays at the Panama Canal bring uncertainty for shippers. Now, there is also the threat to vessels traveling through the Suez Canal, which has had carriers scrambling for solutions for the last 20-plus days.

Just over the holiday weekend, another Maersk vessel was attacked. The Maersk Hangzhou had a double attack as the US sent two destroyers in to assist. Maersk then issued a statement to pause all transits through the Red Sea / Gulf of Aden until further notice. Carriers have started rerouting vessels around Africa, causing delays, war risk surcharges, and vessels being held in position while they figure out their next move.

Carriers are now using the uncertainty in the Red Sea to raise freight rates. The Federal Maritime Commission has been permitting carriers to publish new tariffs with less than the usual 30-day notice. Maersk and MSC have already issued letters. CMA announced new Peak Season Surcharges that continue to increase. The Shanghai Containerized Freight Index (SCFI) showed a 162% rate increase from Shanghai to North Europe over the last two weeks.

Shippers enter 2024 uncertain of how long the Suez Canal situation will continue. This, along with the Chinese New Year almost upon us, will continue causing freight rates to increase. Capacity will be limited, blank sailings will increase, and we will see delays in the overall global transit. We suggest that all our customers review their lead times and check with the international team for the best options.

Europe

Starting January 1, 2024, the Europe Emissions Trading System (ETS) surcharge will be applied to all cargo originating from or arriving at an EU-operated port. Europe’s goal is to become the first climate-neutral continent by the end of 2050. The ETS intends to assist Europe by introducing a price for all greenhouse gases being emitted in this sector.

China

The Lunar New Year celebration is a little later this year, starting February 10 and lasting through the 17th. If something is urgent, please check with your supplier to ensure the product can be shipped prior to their closing. Many carriers implement blank sailings during this time, and pre-booking is suggested.

South China Customs offices (excluding Hong Kong, Da Chan Bay, Yantian, and Shekou) announced they will be off duty during the Chinese Lunar New Year period. Barge services will be suspended during this time as customs will be closed. Any cargo arriving during this time will be delayed for connection and incur demurrage. The planned barge suspension will be from February 5 through the 18th.

Port News

US Imports are still tracking higher than before the pandemic. However, November shows a 9% fall, with the East Coast and Gulf Ports getting hit the hardest. Conditions worsening at the Panama Canal combined with seasonality are causing the decline.

Descartes US container import volume Jan report

Chart: Descartes. Data: Descartes Datamyne. Source: FreightWaves

Customs

On January 2, the US Census Bureau sent out a notification with updated Schedule B and Harmonized Tariff Schedules codes that will not be valid in 2024. They will give a 30-day grace period for the outdated codes. Please see the links below for more information:

On December 24, the US Departments of Commerce, Treasury, Justice, State and Homeland Security Issued a Joint Quint-Seal Compliance Note; "Know Your Cargo: Reinforcing Best Practices to Ensure the Safe and Compliant Transport of Good in Maritime and Other Forms of Transportation." This document highlighted the responsibility of individuals' and entities' participation in global trade to assess their risk and implement compliance programs. This note included potential indicators that could be an effort to evade sanction and export controls and recommended compliance practices that should be followed. 
The Customs Broker Triennial Status Report opened on December 18, 2023, and is due by February 29, 2024.

CBP's November 2023 monthly update was published on December 22, 2023. Some of the highlights include:

  • Over 2.7 million entry summaries were processed and valued at more than $268 billion, with an estimated duties of $6 billion to be collected. Ocean entries accounted for 38%.
  • CBP seized 1607 shipments containing counterfeit goods valued at more than $118 million.
  • The defense of the US agricultural system is huge, and CBP issued 363 emergency action notifications restricting and prohibiting plant and animal products from entering the US.

The last meeting of 2023 for the Commercial Customs Operations Advisory Committee was held on December 20, 2023. It unanimously passed 12 recommendations on export modernization, rapid response, and North American trade. These recommendations aim to improve US CBP’s operation and communication while empowering businesses to remain compliant with trade laws and policies.

The international team is here to help with your logistic needs! Making Logistics Happen! international@il2000.com

Sources: HMM, Maersk, FreightWaves, American Shipper, CBP.gov, Customsandinternationaltradelaw.com, The Telegraph UK, MSC, CMA, US Census  

 

International Market Update January 2024 cover