Capacity is Getting the Squeeze

In this week’s Roar: the Key Bridge cleanup, tightening airfreight capacity, port volumes in the U.S., container ship deliveries hit a record, and diesel prices continue to fall.

Baltimore is making good progress cleaning up the shipping channel and removing the Dali—the container ship that caused the Key Bridge collapse in March. Officials are hopeful the ship can be removed by May 10. So far, over 3,000 tons of debris have been pulled from the channel, and the next step is to remove a twisted section of the bridge that’s trapped under the Dali, which will mean a temporary closure of the shipping channel. With that out of the way, larger ships should be able to enter and exit the port, but with some limitations.

Data is pointing to tight airfreight capacity in Q4 2024, and shippers are worried about being able to move their cargo during peak season. A major factor is the continued red-hot ecommerce trade coming out of Asia Pacific. After what happened in Q4 2023, many shippers are planning ahead and trying to secure capacity now—but that comes with the worry of being locked into high costs in a volatile market. Companies should closely monitor capacity as the year continues.

Port volume in the United States is growing. The ports of Los Angeles, Long Beach, and Savannah all showed year-over-year growth in March 2024. The Port of Los Angeles saw the strongest growth in imports at 18.6%, while the Port of Savannah saw the strongest growth in total TEUs at 18.5%.

Container ship deliveries hit record highs in April 2024, with a staggering 11,100 new slots added daily. The surge in new ships might seem concerning, but liner executives remain confident that the market will absorb the new capacity. The demand for container shipping is attributed to ongoing challenges like port congestion and slower ship speeds due to environmental regulations. However, even with this record number of deliveries, the available capacity for container ships remains tight, with very few idle vessels reported.

The U.S. national average for diesel prices continues to fall. As of April 30, the price was at $3.947 per gallon—the third consecutive drop—which is down from $4.015 per gallon the week before. At the same time, the price of crude traded at $81.90 per barrel. Globally, tensions in the Middle East are not showing signs of easing which will likely maintain upward pressure on bunker prices.

For the rest of the week’s top shipping news, check out the article highlights below.