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NOATUM LOGISTICS WEEK 21 OCEAN MARKET UPDATE

Transpacific Market  U.S. Imports from Asia in April increased by 29.3% on a year over year basis to 1.55 million TEU, according to IHS Market. While this does represent a 6.6% month over month decrease in volume, the decline should not be attributed to a softening in demand but rather due to continued capacity disruptions caused by heavy congestion across the entire Transpacific network.

Slide or missed sailings (often mistakenly referred to as blank or void sailings) continue to be a theme across the industry as congestion continues unabated and vessels are faced with extreme delays across many North American ports. Quantifiable capacity reductions are being realized in the market due to these missed sailings with some carriers advising more than 20% capacity loss into the West Coast and higher than 5% capacity loss into the East Coast on a year-to-date basis as a result. This unfortunately means carriers may not be able to fully honor their original allocations for all customers. In 2021, carriers have missed a total of 121 sailings into the West Coast and 21 into the East Coast. As demand remains at an all-time high and roll pools in Asia continue to expand, the most common question remains why? The answer is directly tied to congestion levels across the entire global ocean network. One well documented and most clearly visible factor are the port delays which on average stands anywhere between 1-3 weeks across the West Coast. With each vessel making multiple stops, this naturally prevents them from being able to return to Asia to meet their next rotational departure.

Ports of Los Angeles and Long Beach remain strained with vessel wait times averaging between 1-2 weeks with around 20-25 vessels at anchorage at any given time. Labor shortage remains the primary constraint with large vessels being limited to 4 gangs which, as a result, is extending port stays by 3-4 days. The situation is even more dire at the Port of Oakland where wait times now extend up to 3 weeks with labor limited to only 2 gangs per vessel on most shifts.

Peak Season is expected to start early this year as retailers prepare for a strong back-to-school season that will likely blend into the end of year holiday peak season that typically starts around August. This will unfortunately put more pressure on an already stretched network with the potential to cause further disruptions.

Ports, Chassis and Equipment Flow Remains Under Pressure The combination of high demand and disrupted capacity flow has plagued the industry now for nearly a year. As we look forward in preparation for the back-to-school rush followed by the holiday peak season, the situation in the near term is expected to remain unchanged. Forecast now has May imports projected up 45% YoY with June expected to come in north of 30% YoY. The continued volume surge will not allow the ports the needed breathing room to clear up backlogs. The current congestion that is extending from factory floors in Asia right through to warehouses across North America looks to continue. The downstream effect means empty chassis pools in many key US ports and inland containers yards leading to trucking delays, waiting time, dry-runs and the related increased costs associated.

Thank you for your continued support and patience as we get through these unprecedented times. We continue to work with our numerous asset-based partners to seek solutions to meet our customer’s needs. We will continue to keep you informed of market updates as they become available.

If you have any questions, please contact your Noatum Logistics representative.