North America monthly reader (November)
Regional commentary - November 12th, 2024
North America - Pre-Peak Troubles
Introduction
Welcome to our November update, where we delve into the region’s most significant events. We welcome your feedback and are available for in-depth discussions based on our data.
Season of Strikes
Following hot on the heels of the 3-day USMX-ILA strike which severely impacted delays at for a huge number of U.S. East and Gulf Coast ports: the latest strikes in Vancouver, Prince Rupert, and Montreal in Canada are at the forefront of the conversation. The BCMEA and ILWU failed to reach a resolution or end the lockout on Saturday, November 9th after scheduled talks resumed. On the East Coast, bargaining between the MEA and the Longshoremen’s Union on Sunday played out in much the same manner, also resulting in a lockout. As of now there are few confident guesses to be made of when work could resume - it’s essentially a waiting game for shippers and carriers alike.
With parliament not scheduled to sit until November 18th, a rare act of back-to-work legislation would not be actualized for another week at the soonest - if it were even entertained. Unless employers and unions alike implement advisory measures suggested by the federal Labor Minister, it’s not entirely inconceivable that the work stoppage could last through the end of this month. It certainly doesn’t help to boost confidence that Vancouver’s terminal schedules are notably lacking any Truck or Rail cut-off dates since Monday. Deltaport Terminal for example, is currently not publishing any ERD’s on their schedules until early December.
In terms of carrier behavior, there were few strong-armed strategies employed in anticipation of the strike or carried out within the first week; most vessels chose a slow-steaming or wait-and-see approach. However, after this weekend’s failed negotiations we are finally seeing the uptick in active crisis management that’s been anticipated from carriers. While there are still significantly fewer port-swaps on the West Coast than in the early stages of the infamous 13-day B.C. strike in 2023; a trickle of confirmed swaps have begun to stream in. As of today there are 2 vessels headed to Seattle, 1 for Tacoma, and 1 for Oakland ahead of their usual Vancouver calls. The MOTUKEA CHIEF on the SWPSL - SVC2 service was a rare example of a reverse port-swap and an early call into DP World’s Fraser Surrey Terminal on November 2nd.
On the East Coast, vessels are primarily still showing signs of accruing incremental day-to-day delays but there have also been a handful of diversions. There have been 2 completed swaps to Halifax, and 2 more scheduled for this week, all of them being MSC operated vessels. The MSC ALDEBARAN III, deployed on the MSC - CANADA GULF BRIDGEservice, completely omitted three Canada calls (Montreal, Corner Brook, Saint John) scheduled for early November and instead made an inducement call into Caucedo on October 28th before continuing on with her rotation at Veracruz. Unlike B.C. there is slightly more relief to be gained on the East Coast as Halifax and Saint John are able to provide a measure of alternative berthing options. Similarly it’s worth noting that both Caste & Racine terminals in Montreal are still operational and it is not a port-wide strike.
In terms of congestion, Vancouver, Halifax, and Rupert have received the brunt of the impact. Vancouver has shot up from an average 4% in w42 to 100% since last week; there are currently 8 vessels waiting and 16 steaming towards. Vessels like the EVER STEADY, MARCOS V, and the SM QINGDAO lead with the longest wait-times outside of the port ranging from 9 to 12 consecutive days. While Prince Rupert has far fewer vessels regularly in queue, she still peaked at a ratio of 75% congestion this week with SAN FELIPE holding the longest wait time of 10 consecutive days at anchorage. Conversely, on the East Coast, no single vessel has spent more than 3 consecutive days outside of Montreal or Halifax. However, with the expected uptick in port swaps, Halifax is beginning to suffer from longer wait times with a current average of 81% this week - a far cry from 21% in w45.
Looking beyond immediate damage to the Canadian economy; the timing of these strikes could pose lingering issues for Los Angeles, Long Beach, Seattle, and Tacoma. Peak seasons have been sneaking up earlier each year, with many shippers employing increased front-loading practices since 2018. With Donald Trump’s recent victory in the U.S. Presidential Election, this year’s Thanksgiving, Christmas, and pre-Lunar New Year peak seasons arrive with the added burden of shippers racing to get ahead of the blanket increase in foreign goods tariffs the Trump presidency has promised to impose.
These tariffs, reportedly ranging from 60%-100% on Chinese goods especially, are already having a significant impact on the Transpacific trade: boosting imports into Mexico and now signaling a strong, albeit temporary, surge in volumes heading for the West Coast gateway. If tensions between Canada’s employers and labor unions aren’t resolved urgently the work stoppage could compound delays and uncertainty into neighboring U.S. gateway ports into the end of Q4 and create a period of unstable reliability recovery well into 2025 Q1.
Eyes on 2025
While things are certainly leading up to a dramatic finish for 2024, there is no shortage of excitement for what is to come in the year ahead. The incoming wave of network changes anticipated with the arrival of the GEMINI and Premier alliances, not to mention strong promises of improved schedule reliability from the likes of Hapag Lloyd, is a globally favored subject.
eeSea analysts are actively updating service versions for 2025 as new information becomes available but it’s worth noting that as far as the new alliances go, we are still on the edge of our seats regarding key details. With just 6 weeks until the start of the new year, we are scanning carrier portals for announcements of definitive berth windows or vessel assignments on a daily basis. While port rotations have been largely settled and publicized, the majority of details that would allow us to build vessel forecasts, share insights on impacts to service and trade capacity, or make intelligent assumptions about VSA percentages are yet to be revealed.
Recent announcements for 2025:
Hapag Lloyd confirmed they would be discontinuing their participation on the Asia-Latin America JCS service in February 2025, now providing Asia-Caribbean through US2 & US3 services.
MSC’s Swan - Sentosa service which has been no stranger to change in previous years will remain as a pendulum and take on Scandinavian ports Rotterdam, Gothenburg, and Aarhus in place of London Gateway, Felixstowe, Gdansk and Gdynia.
ZIM announced extended cooperation with MSC on six additional services from Asia to North America. On the Transatlantic side, they also announced a restructuring of their ZCA and ZCT services with globally highest schedule reliability scoring port Livorno being a fresh addition to both.
While GEMINI and Premier take a fair share of the spotlight, there are many independent venture and partnership changes taking place in tandem with the start of two major global alliances. Our team plans to publish a high-level summary of known rotation changes at the soonest opportunity. If you have questions pertaining to specific service updates in the meantime don't hesitate to reach out to our Operations team.
Our team plans to release the next edition of our newsletter in early November. In the meantime, please stay tuned for updates via our LinkedIn posts.
Kind regards,
Destine
