Despite all the challenges being reported for container shipping and the negative outlook presented by the carriers, U.S. import container volumes are soaring and expected to continue their upward momentum through at least the first half of 2024. This comes as economists continue to point to the resiliency of the economy and the apparent soft landing to the feared 2023 recession.

U.S. container import volume had its largest month-over-month gain in January 2024 in the last seven years according to data released by Descartes Systems Group, a software provider for logistics-intensive businesses. Their February Global Shipping report highlights a 7.9 percent increase in overall container import volume in the U.S. in January 2024 versus December. They report a nearly 15 percent rise in imports from China, highlighting that most of the volume went to the ports of Los Angeles and Long Beach.

The strong growth in January 2024 also brought container volumes back up to year-ago levels and even slightly ahead of January 2019 before the pandemic. Descartes calculates volumes were up nearly 10 percent year-over-year to a total of 2.27 million TEU in January 2024. This is also 9.6 percent ahead of January 2019.

“January was another solid month driven by surprisingly strong imports from China,” said Chris Jones, EVP Industry and Services, Descartes. He however warns, “The combined effect of the Panama drought and the conflict in the Middle East is beginning to impact transit times, particularly at the top East and Gulf coast ports.”

Descartes cautions that the global supply chain performance could be impacted throughout 2024. They highlight the ongoing limits of transits at the Panama Canal, the disruptions to routes through the Red Sea and Suez Canal, and the upcoming labor negotiations at U.S. Atlantic and Gulf Coast ports. The International Longshoremen Association reported it has given its locals a May 2024 deadline as it works to complete a master contract before the September 30, 2024, expiration.

The National Retail Federation, the trade group for U.S. retailers, is also predicting a strong start to 2024 with a forecast of a better than five percent increase in import container volumes for the first half of 2024 versus 2023. Their Global Port Tracker is forecasting a strong gain of 20 percent for February in part due to the timing of the Lunar New Year in 2023 and the beginning of a slowdown in import volumes a year ago.

“U.S. retailers are working to mitigate the impact of delays and increased costs,” says Jonathan Gold, NRF Vice President for Supply Chain and Customs Policy, discussing the ramifications of the Suez Canal and Red Sea disruptions. He highlights that only about 12 percent of U.S.-bound cargo comes through the Suez Canal,” but warns like others, “the longer the disruptions occur, the bigger impact this could have.”

After a strong February, the NRF predicts volumes will be up at a more moderate pace in the first half of the year. They forecast between 2.65 percent and 5.5 percent gains with only May expected to be flat with the year-ago. Monthly retail import volumes are projected at between 1.7 and 1.9 million TEU per month.

A month after the Panama-flagged Genius Star XI diverted to Alaska after reporting a cargo fire, the vessel has finally been permitted to dock to prepare for its onward voyage. The U.S. Coast Guard confirmed that the vessel was permitted to move to the dock in Dutch Harbor, Alaska on January 30 to provide a safer environment and streamline the logistics for the next phase recovery operation.

The 13,600 dwt cargo ship operated by Taiwan’s Wisdom Line was crossing the Pacific when the crew reported a cargo fire. It was contained to the No. 1 hold and believed to have been extinguished with the onboard CO2 system. A second fire was later discovered in the No. 2 hold after the vessel had exhausted its CO2 supply. The Genius Star XI was 225 miles southwest of Alaska when the fire was reported, however, by the time the ship reached Dutch Harbor early on December 30 the USCG reported normal heat signatures from the holds.

The vessel however was held at anchor in Broad Bay while temperature measurements were taken. By early January, they began ventilating the cargo holds with an air circulation system devised by the salvage team while plans were developed for the operation. The holds were initially kept sealed to prevent a reflash, but the plan was later to open them for a visual inspection of the cargo.

The suspicion remains that the fire was in part caused by the shifting of the cargo during rough seas on the Pacific crossing. In the next phase of the operation, the USCG reports salvage teams will work to rescue the cargo and prepare the ship to proceed. They emphasized that no cargo would be offloaded but that crews would work to secure the cargo.

“Moving the ship to a pier allows workers a safer and more efficient environment to work and mitigates work delays caused by weather or rough seas,” said Capt. Chris Culpepper, Captain of the Port for the USCG operation based in Anchorage, Alaska. “Based on the recommendations of several agencies and technical experts we are confident operations can be conducted safely and with no additional risk to the community to expedite preparing the vessel to continue its voyage.”

The Genius Start XI carries 152 CO2 bottles in its fire suppression system. All the bottles were offloaded from the vessel and were being recharged onshore. The Coast Guard is requiring that the system be refilled with the bottles back aboard the vessel before it departs Alaska.

No timeline was reported for the operation and when the vessel would be able to proceed. It left Vietnam on December 10 with a stop in Korea on December 18. The ship was heading to California with its cargo when the fire was reported.

“War is bleeding into the logistics scene”, it has been claimed, with the heightening of tension in the Middle East adding to the challenges of those heading into their third year of conflict in Ukraine.

After reorganising the flow of goods after a turbulent two years in eastern Europe, time-critical logistics specialist EAS International’s MD, Adam Komorowski, said clients were now seeing their businesses upended by spiking rates and elongated transit times thanks to the Red Sea crisis.

Mr Komorowski told The Loadstar: “There is also the impact on market trends and customer decision-making. Some may be turning to rail, while others see air as alternative to the instability in global shipping. What we can say is these attacks are destabilising the market.”

For EAS, which services markets including Poland and Ukraine, the lessons learned while contending with the Russian invasion of Ukraine brought something of a competitive advantage.

As part of an interview with Voice of the Independent, Mr Komorowski said the turbulence in the immediate aftermath of Putin’s invasion continued well into 2023, but over the latter half of the year, supply chains became “well-established”.

“We are now operating within those realities; the war continues, nothing new has happened and the flow of goods, particularly by air, is bedded in,” he added.

“But war is bleeding into the logistics scene. Some companies are taking advantage of this, and others are putting a wall up against it, with no wish to be involved with any activity related to war.”

One pronounced repercussion of the Russian war on Ukraine has been the upturn in freight movements flowing to the besieged country from Poland’s Rzeszow-Jasionka Airport.

Less than 100 miles from the Poland-Ukraine border, the gateway has become pivotal for goods heading east, with Mr Komorowski noting that the use of the airport proved key in alleviating a lot of the chaos gripping goods flows into Ukraine.

“Even so, when you enter the airport, you realise you are somewhere very, very strange,” he said. “It looks very different to almost any other airport a supply chain operative is likely to visit, because unlike those others, it is secured by Patriot missiles, with military installations ready to protect the airport.”

However, for all the growth in cargo activity at Rzeszow-Jasionka, Mr Komorowski sees its value to global supply chains as only “temporary”, with little expectation for a long-term change post-war, citing a lack of investment in the Polish gateway.

And while he may be confident of Ukraine traffic flow, he said the situation in the Middle East was bringing similar headaches to those that hit the sector in February 2022.

“Now, the Red Sea is the big issue for us. We expect more shipments related to airfreight. Although rates are one thing, for our customers, particularly those moving time-sensitive goods, it is the delayed transit times that will prove more crucial for us to solve.”

Belgium experienced another year of record seizures of cocaine being smuggled through the country’s ports in 2023, giving it the dubious honor of being the epicenter of the illegal trade from Central and South America. Belgian officials held a news conference along with their Dutch colleagues in the port of Flushing in the Netherlands to highlight their efforts while calling for more coordination to fight organized crime and the massive smuggling operations.

The data released by Belgium’s Minister of Finance Vince Van Peteghem showed just over a five percent increase in the amount of cocaine seized in Antwerp in 2023 as he emphasized the increased efforts by the country’s customs operation. According to his data, 116 tonnes of cocaine were seized in Antwerp up from 110 tonnes in 2022. He highlighted that it represents an increase of 50 tonnes since they began public reporting on the efforts in 2020. A further five tonnes were seized in the neighboring Belgium port of Zeebrugge in 2023.

Citing extraordinary circumstances, Van Peteghem said they would be continuing on the path taken to increase the seizures and work with colleagues in neighboring countries. “The fight against international drug trafficking requires a lot of expertise and energy from our customs,” the minister said during his briefing.

He said the seizures however were evidence of the success of the federal government’s investment in people and resources for the customs bureau. He cites the close cooperation in cross-border operations as well as the efforts working with the police. Yesterday, the police conducted large sweeps across Brussels and Antwerp reporting the arrest of 22 people including three police officers involved in the narcotics trade. They also seized cash, cars, and weapons with the police blaming increasing violence in the cities on organized crime rings such as the one they broke up yesterday.

Belgium cites Columbia, Ecuador, and Panama as the top countries of origin for the smuggling operations with the minister days that the same three countries continued to dominate the smuggling operations in 2023.

While Antwerp has become the main gateway for the cartels smuggling cocaine onto the continent, the problem however is widespread. European Union officials point to Belgium, the Netherlands, and Spain, reporting that three-quarters of the seizures in 2021 happened in the three countries’ ports. A total of 303 tonnes was seized in 2021 according to the latest information from the EU. The Netherlands reported seizures of 59 tonnes in 2023 with almost 27 tones originating in Ecuador.

Port officials highlight that one of the biggest challenges is the perishable trade, which has become a preferred host for the smugglers. They point to the rush to move refrigerated containers through the port and that they have become one of the primary locations for drug smuggling. Several of the largest seizures in Europe in the last years were all made mixed in with bananas.

Belgium recently took its turn at the Presidency of the EU Council and used this role to launch an ambitious plan to increase efforts both at the ports and working with the governments of the Central and South American countries. Belgium intends to leverage the European Commission’s comprehensive roadmap that was launched in October last year during its leadership of the Council to intensify efforts to combat drug trafficking and criminal networks in European ports.

Nearly a month after environmentalists and local officials began calling attention to plastic nurdles washing up on Spain’s beaches, the federal government is opening a formal investigation. The source of the small plastic balls used in the manufacture of plastic water bottles and similar food packing has been traced to a containership operating under charter to Maersk.

Environmentalists working with Spain’s Ecologistas en Accion, an environmental organization, began finding the small plastic bits washing up on the shoreline primarily in the Galicia region as soon as December 13. Volunteers began scouring the beaches collecting the small plastics while fears grew about how much might have been lost into the ocean. The environmental group is saying there could be billions of the nurdles floating in the ocean and coming ashore as they raise the alarm about the impact on fishing and the food chain.

Investigations traced the source of the nurdles to a containership that lost six boxes overboard on December 8 approximately 50 miles west of the coast of Portugal. Due to currents, most of the plastic has been found on Spanish beaches in Galicia as well as some in Asturias, although some reports are saying traces of it have reached the beaches of France.

The ship, the Liberia-registered Toconao (116,000 dwt) was sailing the Bay of Biscay from Algeciras to Rotterdam. It operates between the Mediterranean and Northern Europe currently under charter to Maersk and managed by Columbia Shipmanagement of Singapore.  Built in 2003, the ship has a capacity of 8,600 TEU.

Six of the containers went overboard with Maersk saying that none of the container cargo is officially listed as hazardous material. There is no word about what else was in the boxes, but one of them contained 1,050 bags of the nurdles (less than 5 millimeters in size). Each sack is reported to hold 55 pounds of the nurdles. Greenpeace estimates that are 22,500 nurdles per pound which means there could have been nearly 1.3 billion nurdles in the container. Maersk told the Associated Press that the vessel’s owners hired multiple cleanup specialists to support the efforts to remove the plastics from the beaches.

Volunteers have been attempting to collect the balls from the beaches (photo courtesy of Ecologistas en Accion)

Ecologistas en Accion, however, is not satisfied with the slow response to the clean-up process. They are critical of the government as well as the shipping industry. The activist group said in a statement on January 5 that it would file an environmental complaint against the owner of the vessel.

The problem of nurdles is well known, with calls to regulate or outlaw their shipment. Just a year ago, France threatened legal action when the plastics began washing up on the beaches of Brittany. Sri Lanka faced a similar problem in 2021 when the feeder ship X-Press Pearl burnt and sunk off Colombo. They have been cleaning nurdles from their beaches with environmentalists projecting a decade or more of repercussions.

Greenpeace, along with Ecologistas en Acción, Friends of the Earth, SEO/BirdLife, and WWF joined together in calling for greater coordination between Spanish authorities in response to the current pellet spill. At the same time, the groups are using the event to call broader attention to the problems of microplastics in the oceans.