Caution and Creation

Importers have largely missed the window to frontload cargo, and while Asia-US container spot rates have eased slightly, capacity remains tight.

Canadian and Mexican routing alternatives also pose risks, including potential labor strikes and longer transit times.

The ILA, representing 85,000 longshore workers, canceled contract talks with USMX after discovering that APM Terminals and Maersk Line were using an Auto Gate system that processes trucks without ILA labor. The Biden administration has not intervened, and ongoing contract disputes between the ILA and APM remain unresolved.

Shippers are left with few options, such as leasing additional warehouse space on the West Coast or routing through smaller ports not utilizing ILA labor.

Beginning September 1, the TMF will be $37.71 per TEU (twenty-foot equivalent unit) or $75.42 for all other size containers. The TMF is charged on non-exempt containers. Containers exempt from the TMF include empty containers; import cargo or export cargo that transits the Alameda Corridor in a container and is subject to a fee imposed by the Alameda Corridor Transportation Authority; and transshipment cargo. Empty chassis and bobtail trucks are also exempt.

The OffPeak program provides regularly scheduled night or weekend shifts to handle trucks delivering and picking up containers at the 12 container terminals in the two adjacent ports. PierPASS launched the OffPeak program in 2005 to reduce severe cargo related congestion and air pollution on local streets and highways around the Los Angeles and Long Beach ports. More than 63 million truck trips have been diverted to the off-peak shifts since the program’s inception. The container terminal operators mitigate truck traffic at their gates with appointment systems.

The TMF helps offset the cost of operating extended gate hours. Labor costs are the largest single component of extended gate costs.

Given the persistent disruptions and strong container market demand, Maersk has upgraded its full-year 2024 guidance, now anticipating an underlying EBITDA of USD 9 to 11 billion and EBIT of USD 3 to 5 billion, up from previous estimates.

The global container market volume growth forecast for 2024 has also been revised up to 4-6%.

Maersk noted the high volatility in trading conditions due to the Red Sea situation and uncertainties in supply and demand for Q4.

This upgrade follows significant increases in June and May, contrasting with Maersk's February forecast of a much lower EBITDA range of USD 1 to 6 billion for 2024, anticipating overcapacity and minimal impact from Red Sea disruptions.

HD Hyundai Heavy Industries and HD Hyundai Samho will each build six container ships, each with a capacity of 15,500 TEUs and equipped with LNG tanks of 12,700 m³ using GTT's Mark III Flex membrane containment system.

The ships will be delivered between Q2 2027 and Q2 2028. Executives from HD Hyundai Heavy Industries and CMA CGM highlighted the collaboration's focus on efficiency, environmental performance, and sustainable maritime solutions.