Container Bytes #53: Two-Thirds Red Sea Fleet Restoration, LA Port Watchman Strike Threat, and Unseasonal Ocean Rate Spikes

So starting with the typhoon, we had typhoon Champy, which I don't know if I'm pronouncing that right, but it really mostly impacted ports and also airports in Taiwan.

So it impacted on Friday and it put some of the nearby major container hubs on the Chinese coast on alert, but didn't really disrupt operations there.

And then it kind of weakened as it continued north and northeast towards Japan.

So for, you know, in terms of operations, yes, it shut down ports in Taiwan.

But in terms of hitting the ports in China, again, we didn't see that.

The major Chinese container hubs are still continuing to recover from those previous disruptions from storms, as you mentioned.

And there's certainly a lot of progress, but not completely back to where they are.

normal just yet.

So congestion from those storms has been one factor that's been maybe keeping more upward pressure on rates than maybe otherwise would have seen.

The other part that might be a factor, as you mentioned, is the carriers continuing to go back towards the Red Sea.

Alphaliner estimates that about two-thirds of total Asia-Europe capacity now is restored, which is really dramatic if we think this started in July.

So it's been gradual, but it's really significant at this point, and it seems to be moving forward.

Really kind of especially of note is that Zim lines announced that they have resumed a Far East U.S. East Coast service together with MSC.

And this is of note because Zim is an Israeli container carrier and Israel was explicitly targeted or declared Israeli.

by the Houthis that the Babilon administrators closed them as recently as August.

There were reports that there have been meetings that the Houthis said they'll refrain from attacking vessels, including Israeli vessels, but this is kind of a big, another kind of milestone in the fact that the return might be, you know, it's really taking shape.

If you have vessels going by the Red Sea instead of going all the way around, they start to arrive earlier than they were meant to, and you can have some vessel munching.

So we don't see reports of kind of significant, you know, chaos because this has been gradual.

And you have some existing congestion already, so it'd be less noticeable as opposed to starting from a completely smooth operation.

So it likely is kind of contributing to some congestion and contributing to the recovery of those congestions from the storm being maybe being less significant than otherwise would have been.

But we don't see anything major from that, but it might be one contributor.