Vessel operations in and out of the Port of Baltimore have ground to a halt after a containership collision resulted in the collapse of the Francis Scott Key Bridge. The incident has prompted authorities to suspend all vessel operations, severely limiting port terminal activities to import pickups, with no empty container returns permitted.
The ramifications of the bridge collapse extend beyond port operations, as a state of emergency has been declared, impacting transportation in the Baltimore port area. The full extent of the disruption and the timeline for restoration of normal operations remains uncertain as authorities assess the damage and work towards a solution.
A downward trend in Transatlantic Westbound shipping is impacting the return leg from the US, resulting in reduced capacity and fewer options for shippers. Adding to the complexity, implementing the EU ETS in January has further affected rate levels, with increases ranging from EUR 15 to EUR 50 per TEU depending on the port pairs and equipment used.
Compounding these challenges is the Panama Canal’s low water levels, causing disruptions to connections from the US West Coast. THE Alliance AL5 schedule has been particularly affected, with delays experienced at ports such as Rodman and Caucedo. Transshipments may become necessary if the levels deteriorate further, potentially requiring carriers to load cargo onto smaller vessels.
Space is currently available for shipping from the West Coast of South America to Europe. Due to the Panama low water situation, there are issues with connections. On average, vessels are waiting 1-2 days off the coast of Balboa before transiting the canal.
The reefer season is robust from both the East and West Coasts of South America, with exceptionally high demand from the East Coast. Ships departing from Brazil are sailing at full capacity, reflecting strong market conditions and increased regional shipping activity. This heightened demand underscores the importance of timely booking and planning for shipping operations to ensure efficient transportation of goods to Europe.
However, it’s important to note that rates have increased rapidly due to higher operational costs associated with longer routes and the implementation of the EU ETS (Emissions Trading System).
2023 presented significant challenges for South Africa’s export sector, with export volumes plummeting by 17%. Infrastructure and equipment constraints at the Port of Cape Town compounded these difficulties, adversely affecting all products reliant on the port. Unfortunately, current departure delays in Cape Town suggest minimal improvement in 2024, with immediate relief seeming unlikely.
Meanwhile, rising bunker costs and the implementation of the EU ETS have impacted costs ranging between EUR 26 and EUR 36 per TEU for dry containers in Q1 2024. The repercussions of the Red Sea situation, which led to vessel rerouting around the Cape of Good Hope, remain uncertain for this trade. However, prolonged disruptions could significantly affect equipment flows if the situation persists for weeks or months.
As of January 30th, 2024, commercial shipping in the Bab al-Mandab Strait has been disrupted by attacks from Houthi rebels, prompting carriers to suspend most services via the Red Sea. Vessels are being rerouted via the Cape of Good Hope, resulting in an average increase in transit times to North Europe by 10 days and a distance increase of approximately a third.
This change in the routing has led to concerns regarding equipment supply as more containers are delayed or being used due to the additional vessels deployed and longer transits.
Despite these challenges, demand remains robust in the Asian trade route, with volumes up by 5.7% from January to September 2023 compared to the previous year.
Consequently, rates have surged rapidly, with the spot rate reaching $5000 per 40ft container, three times higher than the previous month. As carriers adapt to the evolving situation and shippers navigate increased transit times and equipment shortages, proactive planning and collaboration will be essential to mitigate disruptions and ensure the continued flow of goods.