WEBVTT
00:00:00.160 --> 00:00:05.120
Hello there and welcome to this week's episode of Container Bites, your 10 minute update on the latest infrared.
00:00:05.360 --> 00:00:08.800
I'm Julia Frontline, as always joined by Judah Levine, our freight expert.
00:00:09.119 --> 00:00:10.000
Judah, how are you doing today?
00:00:10.400 --> 00:00:10.960
Good, how are you?
00:00:11.439 --> 00:00:12.240
Yeah, doing okay.
00:00:12.480 --> 00:00:13.359
Glad to be back at work.
00:00:13.519 --> 00:00:15.199
Thank you for having down the floor last week.
00:00:17.280 --> 00:00:18.399
All right, let's get going.
00:00:18.640 --> 00:00:26.160
So there are some recent estimates that put Middle East crude oil exports almost back to pre-war levels, and crude prices are coming down a bit too.
00:00:26.320 --> 00:00:28.160
What does this mean for bunker and jet fuel?
00:00:28.399 --> 00:00:32.960
Yeah, so um some of that increase is actually coming through the Strait of Hormuz.
00:00:33.039 --> 00:00:41.439
So it seems that the US maybe is getting better at escorting vessels or a lot of vessels crossing, you know, with their uh transponders off, with their AIS off.
00:00:41.600 --> 00:00:46.960
They're called kind of dark transits, and there seems to be increases and improvement on that front.
00:00:47.039 --> 00:00:54.159
And there are lots of uh other uh alternatives as well, pipelines to um the Saudi Arabia and then via the Red Sea.
00:00:54.320 --> 00:01:00.000
So there seems to be an increase in uh volumes of crude and by by certain estimates.
00:01:00.240 --> 00:01:10.319
And we, as you said, we do see um crude rates coming down a little bit, not as much as maybe you would expect if we're kind of back to almost uh baseline levels, but coming down a little bit.
00:01:10.480 --> 00:01:13.920
What does that mean for other types of fuels is uh kind of a different story.
00:01:14.079 --> 00:01:20.400
So, first of all, it will take time for those actual volumes to reach where they need to get to and then be refined.
00:01:20.480 --> 00:01:27.920
So sometimes you will you'll see a lag in terms of um crude levels and crude prices and um refined uh prices.
00:01:28.079 --> 00:01:30.319
And the other part is this if this is sustained.
00:01:30.400 --> 00:01:35.359
So really just in the last couple of days, we've seen uh an increase in attacks on vessels in the Hormuz.
00:01:35.519 --> 00:01:41.040
And we know there have been attempts to disrupt the alternative, like the pipeline for Saudi Arabia and things like that.
00:01:41.120 --> 00:01:42.799
So that's the other kind of wild card.
00:01:42.879 --> 00:01:57.120
When we see other fuel types like the big problems there are in diesel right now, that is more in terms of um damaged infrastructure, where a lot of diesel was refined in the Middle East and then exported, which isn't so much the case for bunker and jet fuel, so it's a little bit of a different story.
00:01:57.359 --> 00:02:10.240
One kind of related piece of all this to container is that we were just talking about this pipeline to uh you know, out of the Gulf to um the Red Sea coast uh uh via this pipeline that belongs to Saudi Arabia.
00:02:10.400 --> 00:02:14.800
And this is kind of related to the conflict between the Houthis and the Saudis.
00:02:14.960 --> 00:02:26.719
The Houthis have been um, you know, trying to disrupt Saudi, this Saudi alternative of tankers going through the Red Sea and then through the southern Red Sea and off uh into Asia by attacking Saudi vessels there.
00:02:26.879 --> 00:02:38.879
There's been developments there, kind of Saudi backed forces in Yemen are now trying to retake territory on the coast that was recently captured by the by the Houthis and being used, you know, to uh to further threaten Red Sea traffic.
00:02:39.039 --> 00:02:48.719
But even with all this going on, to finally get back to container, even with all this going on, we still see container carriers continuing to take steps back to the Red Sea um gradually.
00:02:48.879 --> 00:03:01.280
And the latest um update there is that the Premier Alliance, which had been the last of the three alliances plus MSC, still not going back to the Red Sea, now announced that they will start sending some vessels uh in October.
00:03:01.360 --> 00:03:08.000
So this seems to be, you know, kind of gradual and steady progress towards a full return to the Red Sea for the container market nonetheless.
00:03:08.400 --> 00:03:08.639
Okay.
00:03:08.719 --> 00:03:12.080
And are all these changes having any impact on the Asia Europe container lines?
00:03:12.319 --> 00:03:14.800
So, in terms of the Red Sea returns, probably, right?
00:03:14.879 --> 00:03:19.280
Whatever's going on with oil prices and bunker fuel prices will be the same across the board.
00:03:19.599 --> 00:03:21.680
As we said, you know, oil prices are coming down a little bit.
00:03:21.759 --> 00:03:28.319
So far, bunker fuel has stayed kind of level, but at this elevated level where it's kind of rebounded since um early July.
00:03:28.560 --> 00:03:42.080
In terms of the Red Sea, though, this increase in uh transits on uh Asia Europe lanes is increasing effective capacity because these containers are just, these vessels are just moving faster through through the system.
00:03:42.240 --> 00:03:48.639
We've seen rates come down sharply for all Asia Europe lanes since the kind of the peak of peak season, early July.
00:03:48.800 --> 00:03:57.360
Just this past week, prices dipped a little bit more, 2 to 3%, about$3,200 to North Europe and$3,500 to the Mediterranean.
00:03:57.599 --> 00:03:59.759
This week the rates so far have stayed level.
00:03:59.919 --> 00:04:03.039
We're in just the tail end of Golden Week today.
00:04:03.120 --> 00:04:04.879
Um so there are a lot of blank sailings.
00:04:04.960 --> 00:04:08.879
There's a big drop in uh activity and in manufacturing, especially.
00:04:09.120 --> 00:04:12.560
So um, so it makes sense that things are are are level now.
00:04:12.719 --> 00:04:23.279
If we compare the two lanes though, Asia, North Europe, and Asia Mediterranean, there are many more vessels starting to make the trip for Asia-Mediterranean than for Asia and North Europe so far.
00:04:23.439 --> 00:04:28.959
And if we compare those uh levels, we've seen uh Asia-Mediterranean rates come down much more significantly.
00:04:29.120 --> 00:04:36.240
They're already back to pre-peak season levels, um, whereas Asia-North Europe is still about$400 higher per FEO.
00:04:36.319 --> 00:04:40.000
So the difference here is probably that increase in capacity because of the Red Sea.
00:04:40.160 --> 00:04:48.959
Both of these lanes are contending with still significant congestion in the Far East from these series of typhoons in in uh July and August and maybe into September.
00:04:49.040 --> 00:04:52.000
But nonetheless, we see Mediterranean rates back to baseline.
00:04:52.160 --> 00:04:56.639
Asian North Europe is still a little bit elevated, so the difference is probably the Red Sea.
00:04:57.040 --> 00:04:59.680
Okay, as you mentioned, Golden Week is coming to an end this week.
00:04:59.759 --> 00:05:01.600
So, what can we expect on the Trans-Pacific?
00:05:01.920 --> 00:05:18.639
So, as opposed to Asian North Europe, where we said we saw rates peak in in July and then gradually and and consistently continue to come down since then, Trans-Pacific rates have reached kind of peak levels in early July and just stayed there, even increased a little bit further for the West Coast and a little bit for the East Coast as well.
00:05:18.720 --> 00:05:27.680
And that's where they were straight into Golden Week, where about$8,300 per FEU to the West Coast and$9,600 to the East Coast, which are real elevated and they've kind of stayed that way.
00:05:27.759 --> 00:05:31.360
Over Golden Week, we haven't seen a difference, shouldn't expect one for the same reason.
00:05:31.519 --> 00:05:36.079
Blank sailings, um, adjusting for the decrease in in shipping activity.
00:05:36.240 --> 00:05:38.240
The question is what happens next, right?
00:05:38.319 --> 00:05:41.920
Are we going to see a drop-off in demand as peak season finally over?
00:05:42.160 --> 00:05:48.480
Which, you know, would would seem to make sense, and it's very possible that we'll start to see easing from the on the uh demand side.
00:05:48.639 --> 00:06:11.040
Um, there are other pieces of this that, you know, there was increases in in volumes from non-seasonal type goods like things for data centers and things like that, or you know, changes with tariffs maybe encouraging some additional shipping, but it would seem to make sense that we'll enter this usual demand low between the end of peak season and the beginning of uh the pre-lunar new year rush, and the new year starts in early February this year.
00:06:11.199 --> 00:06:15.279
So it's possible that on the demand side we're gonna see some easing after Golden Week.
00:06:15.360 --> 00:06:16.959
The question is what happens on the supply side?
00:06:17.120 --> 00:06:20.720
So, as we said, we have this significant congestion in the Far East.
00:06:20.879 --> 00:06:26.399
It's improving, it's not as bad as it was, um, but it's still um a factor.
00:06:26.720 --> 00:06:43.199
So I would think, I would suspect that after Golden Week, and maybe you know a buffer of a couple weeks because there are you know backlogs and things that didn't get out before the holiday, um, that we'll start to see rates easing, but maybe not back to the baseline because of this uh factor of congestion.
00:06:43.279 --> 00:06:49.120
Um, and then you know it's not so long until uh lunar new year uh arrives.
00:06:49.279 --> 00:06:51.839
So we might not see go back to to their baseline.
00:06:51.920 --> 00:07:00.800
I would expect we don't see rates go back to their pre-um peak season baseline where they were back in May before we start to see them start climbing again ahead of lunar new year.
00:07:01.120 --> 00:07:02.959
Okay, moving to air cargo now.
00:07:03.120 --> 00:07:05.439
Is Golden Week having any impact there on the rates?
00:07:05.759 --> 00:07:06.480
Yeah, it seems to.
00:07:06.560 --> 00:07:10.639
So we saw pretty significant decreases out of um Far East and China.
00:07:10.720 --> 00:07:13.839
To North America, our rates dropped 15% last week.
00:07:13.920 --> 00:07:20.800
They're at$5.60, and they used 7% to Europe to about$3.80 per kilo.
00:07:20.959 --> 00:07:29.600
And probably, you know, kind of a rush before uh Golden Week, as we said, things are kind of um uh a big drop in activity over the week.
00:07:29.680 --> 00:07:36.480
Um, we may see some rebound just post again because of some backlogs, things that didn't get out, and then things that are going to be expedited.
00:07:36.560 --> 00:07:40.319
So we may see rates rebound a little bit, but we'll probably see them cool a little bit after that.
00:07:40.480 --> 00:07:43.600
But again, for air cargo, we're getting towards peak season, right?
00:07:43.759 --> 00:07:48.240
Air cargo peak season is probably you know starts usually in November, even late October.
00:07:48.319 --> 00:07:53.839
So we may see some bump and then easing, but then we'll likely see rates start climbing again as we get towards peak season.
00:07:54.000 --> 00:07:54.720
All right, great, interesting.
00:07:54.800 --> 00:07:55.439
Thank you, Judith.
00:07:55.519 --> 00:07:56.720
That's all we have time for today.
00:07:57.040 --> 00:08:01.600
If you enjoyed this session, please hit the subscribe button and you'll get notified about all our future episodes.
00:08:01.759 --> 00:08:03.040
Thank you for listening and goodbye.
00:00:00.160 --> 00:00:05.120
Hello there and welcome to this week's episode of Container Bites, your 10 minute update on the latest infrared.
00:00:05.360 --> 00:00:08.800
I'm Julia Frontline, as always joined by Judah Levine, our freight expert.
00:00:09.119 --> 00:00:10.000
Judah, how are you doing today?
00:00:10.400 --> 00:00:10.960
Good, how are you?
00:00:11.439 --> 00:00:12.240
Yeah, doing okay.
00:00:12.480 --> 00:00:13.359
Glad to be back at work.
00:00:13.519 --> 00:00:15.199
Thank you for having down the floor last week.
00:00:17.280 --> 00:00:18.399
All right, let's get going.
00:00:18.640 --> 00:00:26.160
So there are some recent estimates that put Middle East crude oil exports almost back to pre-war levels, and crude prices are coming down a bit too.
00:00:26.320 --> 00:00:28.160
What does this mean for bunker and jet fuel?
00:00:28.399 --> 00:00:32.960
Yeah, so um some of that increase is actually coming through the Strait of Hormuz.
00:00:33.039 --> 00:00:41.439
So it seems that the US maybe is getting better at escorting vessels or a lot of vessels crossing, you know, with their uh transponders off, with their AIS off.
00:00:41.600 --> 00:00:46.960
They're called kind of dark transits, and there seems to be increases and improvement on that front.
00:00:47.039 --> 00:00:54.159
And there are lots of uh other uh alternatives as well, pipelines to um the Saudi Arabia and then via the Red Sea.
00:00:54.320 --> 00:01:00.000
So there seems to be an increase in uh volumes of crude and by by certain estimates.
00:01:00.240 --> 00:01:10.319
And we, as you said, we do see um crude rates coming down a little bit, not as much as maybe you would expect if we're kind of back to almost uh baseline levels, but coming down a little bit.
00:01:10.480 --> 00:01:13.920
What does that mean for other types of fuels is uh kind of a different story.
00:01:14.079 --> 00:01:20.400
So, first of all, it will take time for those actual volumes to reach where they need to get to and then be refined.
00:01:20.480 --> 00:01:27.920
So sometimes you will you'll see a lag in terms of um crude levels and crude prices and um refined uh prices.
00:01:28.079 --> 00:01:30.319
And the other part is this if this is sustained.
00:01:30.400 --> 00:01:35.359
So really just in the last couple of days, we've seen uh an increase in attacks on vessels in the Hormuz.
00:01:35.519 --> 00:01:41.040
And we know there have been attempts to disrupt the alternative, like the pipeline for Saudi Arabia and things like that.
00:01:41.120 --> 00:01:42.799
So that's the other kind of wild card.
00:01:42.879 --> 00:01:57.120
When we see other fuel types like the big problems there are in diesel right now, that is more in terms of um damaged infrastructure, where a lot of diesel was refined in the Middle East and then exported, which isn't so much the case for bunker and jet fuel, so it's a little bit of a different story.
00:01:57.359 --> 00:02:10.240
One kind of related piece of all this to container is that we were just talking about this pipeline to uh you know, out of the Gulf to um the Red Sea coast uh uh via this pipeline that belongs to Saudi Arabia.
00:02:10.400 --> 00:02:14.800
And this is kind of related to the conflict between the Houthis and the Saudis.
00:02:14.960 --> 00:02:26.719
The Houthis have been um, you know, trying to disrupt Saudi, this Saudi alternative of tankers going through the Red Sea and then through the southern Red Sea and off uh into Asia by attacking Saudi vessels there.
00:02:26.879 --> 00:02:38.879
There's been developments there, kind of Saudi backed forces in Yemen are now trying to retake territory on the coast that was recently captured by the by the Houthis and being used, you know, to uh to further threaten Red Sea traffic.
00:02:39.039 --> 00:02:48.719
But even with all this going on, to finally get back to container, even with all this going on, we still see container carriers continuing to take steps back to the Red Sea um gradually.
00:02:48.879 --> 00:03:01.280
And the latest um update there is that the Premier Alliance, which had been the last of the three alliances plus MSC, still not going back to the Red Sea, now announced that they will start sending some vessels uh in October.
00:03:01.360 --> 00:03:08.000
So this seems to be, you know, kind of gradual and steady progress towards a full return to the Red Sea for the container market nonetheless.
00:03:08.400 --> 00:03:08.639
Okay.
00:03:08.719 --> 00:03:12.080
And are all these changes having any impact on the Asia Europe container lines?
00:03:12.319 --> 00:03:14.800
So, in terms of the Red Sea returns, probably, right?
00:03:14.879 --> 00:03:19.280
Whatever's going on with oil prices and bunker fuel prices will be the same across the board.
00:03:19.599 --> 00:03:21.680
As we said, you know, oil prices are coming down a little bit.
00:03:21.759 --> 00:03:28.319
So far, bunker fuel has stayed kind of level, but at this elevated level where it's kind of rebounded since um early July.
00:03:28.560 --> 00:03:42.080
In terms of the Red Sea, though, this increase in uh transits on uh Asia Europe lanes is increasing effective capacity because these containers are just, these vessels are just moving faster through through the system.
00:03:42.240 --> 00:03:48.639
We've seen rates come down sharply for all Asia Europe lanes since the kind of the peak of peak season, early July.
00:03:48.800 --> 00:03:57.360
Just this past week, prices dipped a little bit more, 2 to 3%, about$3,200 to North Europe and$3,500 to the Mediterranean.
00:03:57.599 --> 00:03:59.759
This week the rates so far have stayed level.
00:03:59.919 --> 00:04:03.039
We're in just the tail end of Golden Week today.
00:04:03.120 --> 00:04:04.879
Um so there are a lot of blank sailings.
00:04:04.960 --> 00:04:08.879
There's a big drop in uh activity and in manufacturing, especially.
00:04:09.120 --> 00:04:12.560
So um, so it makes sense that things are are are level now.
00:04:12.719 --> 00:04:23.279
If we compare the two lanes though, Asia, North Europe, and Asia Mediterranean, there are many more vessels starting to make the trip for Asia-Mediterranean than for Asia and North Europe so far.
00:04:23.439 --> 00:04:28.959
And if we compare those uh levels, we've seen uh Asia-Mediterranean rates come down much more significantly.
00:04:29.120 --> 00:04:36.240
They're already back to pre-peak season levels, um, whereas Asia-North Europe is still about$400 higher per FEO.
00:04:36.319 --> 00:04:40.000
So the difference here is probably that increase in capacity because of the Red Sea.
00:04:40.160 --> 00:04:48.959
Both of these lanes are contending with still significant congestion in the Far East from these series of typhoons in in uh July and August and maybe into September.
00:04:49.040 --> 00:04:52.000
But nonetheless, we see Mediterranean rates back to baseline.
00:04:52.160 --> 00:04:56.639
Asian North Europe is still a little bit elevated, so the difference is probably the Red Sea.
00:04:57.040 --> 00:04:59.680
Okay, as you mentioned, Golden Week is coming to an end this week.
00:04:59.759 --> 00:05:01.600
So, what can we expect on the Trans-Pacific?
00:05:01.920 --> 00:05:18.639
So, as opposed to Asian North Europe, where we said we saw rates peak in in July and then gradually and and consistently continue to come down since then, Trans-Pacific rates have reached kind of peak levels in early July and just stayed there, even increased a little bit further for the West Coast and a little bit for the East Coast as well.
00:05:18.720 --> 00:05:27.680
And that's where they were straight into Golden Week, where about$8,300 per FEU to the West Coast and$9,600 to the East Coast, which are real elevated and they've kind of stayed that way.
00:05:27.759 --> 00:05:31.360
Over Golden Week, we haven't seen a difference, shouldn't expect one for the same reason.
00:05:31.519 --> 00:05:36.079
Blank sailings, um, adjusting for the decrease in in shipping activity.
00:05:36.240 --> 00:05:38.240
The question is what happens next, right?
00:05:38.319 --> 00:05:41.920
Are we going to see a drop-off in demand as peak season finally over?
00:05:42.160 --> 00:05:48.480
Which, you know, would would seem to make sense, and it's very possible that we'll start to see easing from the on the uh demand side.
00:05:48.639 --> 00:06:11.040
Um, there are other pieces of this that, you know, there was increases in in volumes from non-seasonal type goods like things for data centers and things like that, or you know, changes with tariffs maybe encouraging some additional shipping, but it would seem to make sense that we'll enter this usual demand low between the end of peak season and the beginning of uh the pre-lunar new year rush, and the new year starts in early February this year.
00:06:11.199 --> 00:06:15.279
So it's possible that on the demand side we're gonna see some easing after Golden Week.
00:06:15.360 --> 00:06:16.959
The question is what happens on the supply side?
00:06:17.120 --> 00:06:20.720
So, as we said, we have this significant congestion in the Far East.
00:06:20.879 --> 00:06:26.399
It's improving, it's not as bad as it was, um, but it's still um a factor.
00:06:26.720 --> 00:06:43.199
So I would think, I would suspect that after Golden Week, and maybe you know a buffer of a couple weeks because there are you know backlogs and things that didn't get out before the holiday, um, that we'll start to see rates easing, but maybe not back to the baseline because of this uh factor of congestion.
00:06:43.279 --> 00:06:49.120
Um, and then you know it's not so long until uh lunar new year uh arrives.
00:06:49.279 --> 00:06:51.839
So we might not see go back to to their baseline.
00:06:51.920 --> 00:07:00.800
I would expect we don't see rates go back to their pre-um peak season baseline where they were back in May before we start to see them start climbing again ahead of lunar new year.
00:07:01.120 --> 00:07:02.959
Okay, moving to air cargo now.
00:07:03.120 --> 00:07:05.439
Is Golden Week having any impact there on the rates?
00:07:05.759 --> 00:07:06.480
Yeah, it seems to.
00:07:06.560 --> 00:07:10.639
So we saw pretty significant decreases out of um Far East and China.
00:07:10.720 --> 00:07:13.839
To North America, our rates dropped 15% last week.
00:07:13.920 --> 00:07:20.800
They're at$5.60, and they used 7% to Europe to about$3.80 per kilo.
00:07:20.959 --> 00:07:29.600
And probably, you know, kind of a rush before uh Golden Week, as we said, things are kind of um uh a big drop in activity over the week.
00:07:29.680 --> 00:07:36.480
Um, we may see some rebound just post again because of some backlogs, things that didn't get out, and then things that are going to be expedited.
00:07:36.560 --> 00:07:40.319
So we may see rates rebound a little bit, but we'll probably see them cool a little bit after that.
00:07:40.480 --> 00:07:43.600
But again, for air cargo, we're getting towards peak season, right?
00:07:43.759 --> 00:07:48.240
Air cargo peak season is probably you know starts usually in November, even late October.
00:07:48.319 --> 00:07:53.839
So we may see some bump and then easing, but then we'll likely see rates start climbing again as we get towards peak season.
00:07:54.000 --> 00:07:54.720
All right, great, interesting.
00:07:54.800 --> 00:07:55.439
Thank you, Judith.
00:07:55.519 --> 00:07:56.720
That's all we have time for today.
00:07:57.040 --> 00:08:01.600
If you enjoyed this session, please hit the subscribe button and you'll get notified about all our future episodes.
00:08:01.759 --> 00:08:03.040
Thank you for listening and goodbye.
