Wise or crazy?
Ocean carriers are struggling to maintain their transpacific general rate increases (GRIs) as rates come under pressure due to oversupply and weakening demand. Their efforts to implement GRIs have been met with resistance from shippers, who are seeking lower rates (for example, TPWC contract rates settled at $1,200/FEU for big beneficial cargo owners (BCOs) and $1,350-1,500/FEU for the rest) amid the uncertain economic environment. The uncertainty hits even the strongest: Maersk has reported a net loss of $5 billion in the first quarter of 2023. Its loss is due to a combination of factors, including declining freight rates, rising fuel costs, and ongoing supply chain disruptions.
At the same time, Evergreen is expanding its fleet. It has placed orders for 24 new methanol dual fuel ships. They will be among the largest container ships in the world and will feature advanced technology and design to optimize efficiency and reduce emissions.
Routes & services
- European hauliers remain optimistic about the industry's future despite experiencing a decrease in rates following the holiday season. Hauliers believe that the current rate decline is temporary and that it will stabilize soon due to the increasing demand for goods and transportation services.
- Chinese logistics start-up GFL has launched a new direct logistics link between the South Korean city of Busan and St. Petersburg, Russia.
- LKW Walter and MediaMarkt have shifted to rail for their Germany-Italy services. The companies have partnered with Hupac to offer an intermodal solution that will reduce carbon emissions and transit times.
- A new freight train route linking the North China city of Handan with Tashkent, Uzbekistan is part of the Belt and Road Initiative and aims to strengthen trade ties between China and Uzbekistan. The train will transport goods such as machinery, electronics, and textiles and will cover a distance of over 4,000 km.
- A new rotation of MSC’s India Africa Service (IAS): Mundra, Nhava Sheva, Colombo, Abidjan, Lomé, Tema, Coega, Abu Dhabi, Jebel Ali, and Mundra.
- MSC has launched a new Inter-Asia service called Shikra with the rotation: Qingdao – Shanghai – Ningbo – Kaohsiung – Shekou – Singapore – Colombo – Nhava Sheva – Mundra – Colombo – Port Klang – Singapore – Tanjung Pelepas – Vung Tau – Qingdao.
Other
- The ocean carriers have filed a petition with the Surface Transportation Board (STB) requesting clarification on the rail storage fees charged by the railroads. They claim that the fees charged by the railroads are unreasonable and do not reflect the actual costs of storing containers on rail tracks. The railroads, on the other hand, argue that the fees are necessary to cover the costs of providing storage facilities and services. This dispute could have significant implications for the logistics industry.
- MSC has decided to withdraw from all vessel sharing agreements (VSAs) on the Asia-Europe and transpacific trades. However, most carriers continue to rely on VSAs to optimize their capacity and improve efficiency.
- The Port of Thessaloniki, Greece, has reached a labor agreement with dockworkers after negotiations between the two sides which has put an end to service disruptions.
These are only several changes that occurred in more than 250 bn freight rates across 25 million routes with more than 1 million market players. Want to share some news about your company, services, and routes? Just post them on MAXMODAL, a multimodal network that digitally connects routes and rates worldwide to automate sales and operations across container transportation & logistics industry. Join to innovate.
Пре-карридж с любой точки Китая до консолидационного склада БЕСПЛАТНО!!!
Transitory illusion
Recent improvements in container shipping volumes and rates are likely to be temporary and do not indicate a sustained recovery for the industry. Although some shipping lines have reported strong results for the first quarter of 2023, the underlying fundamentals of the market, including overcapacity, low freight rates, and weak demand, have not really changed. Despite the efforts of the container shipping lines to push rates up by reducing capacity and canceling sailings, they have been hampered by weak demand. The current market conditions are likely to persist in the coming months and container shipping lines should focus on improving their operational efficiency and reducing costs in order to remain competitive instead of trying to put pressure on shippers to accept higher rates. For example, securing long-term contracts on the trans-Pacific trade lane is already a losing game because of declining export volumes from Asia, combined with overcapacity in the market.
Hot topic
- The ongoing conflict in Sudan has led to the closure of several key transportation routes, including major highways and rail lines. Maersk and Hapag-Lloyd have suspended cargo bookings for the African nation until further notice.
- Chinese companies are moving their supply chains out of China to manage risks. India and Malaysia are becoming the keu destinations instead. While many companies are looking to diversify their supply chains and reduce their dependence on China, the process is likely to be slow and challenging and will require significant investments in infrastructure, technology, etc.
Routes, services & rates
- The shipping rates between Europe and the US have been declining due to decreased imports from Europe. A due to mong the factors that contributed are The Suez Canal blockage and the shortage of containers, canceled sailings, and decreased demands in the post-COVID era.
- Contrary to the decreasing rates between the EU and the US, the Indian ones dropped because of an oversupply of container capacity, but negotiations over long-term contracts between shippers and carriers have helped to stabilize the situation. Experts suggest that this could lead to a more balanced market in the future.
- Shippers are concerned that a recent Bangladesh’s court ruling that opening its two seaports, Chittagong and Mongla, to Indian domestic cargo could lead to increased congestion at the port of Chittagong.
- MSC has announced updates to its India Africa Service (IAS). The new rotation: Mundra – Nhava Sheva – Colombo – Abidjan – Lomé – Tema – Coega – Abu Dhabi – Jebel Ali – Mundra.
- MSC has made changes to its Gulf and South America East Coast (SAEC) String 1 services. The new rotation: Veracruz – Altamira – Houston – Mobile – Cristobal – Cartagena – Santos – Itapoa – Navegantes – Paranagua – Santos – Rio De Janeiro – Salvador – Cartagena – Cristobal – (Veracruz).
- A new railway line connecting Iraq and Turkey is back on the table. The project has been under discussion for several years, but has not yet been realized due to various challenges. The proposed railway line would run from the city of Mosul in Iraq to the Turkish port of Iskenderun.
- The first French Postal Express freight train departed from Chengdu, China, bound for Europe. It is the first time a French company has used the Chengdu-Europe railway route for express postal services.
- Canadian National Railway (CN), Union Pacific Railroad, and Ferromex subsidiary GMXT have launched a new intermodal service connecting Mexico, the US, and Canada. The service will run between Monterrey in Mexico and Winnipeg in Canada, with connections to major US cities.
Other
- The U.S. Environmental Protection Agency has awarded $400m in federal grants to reduce truck pollution at ports across the country. The grants will support projects to replace older, high-emitting trucks with newer, cleaner models, as well as other initiatives to reduce emissions from port-related activities.
- The EU recognizes governments’ importance in coordinating their efforts to support the transition to sustainable fuels in the trucking industry.
- MSC is planning to expand its standalone network of services following the end of its 2M alliance with Maersk. The company plans to add new services to its existing network, with a focus on connecting Asia, Europe, and the Mediterranean.
- Deutsche Bahn and the German Train Drivers' Union have failed to reach a wage agreement for the third time in recent months.
- European ports have fallen below pre-pandemic levels due to ongoing supply chain disruptions and reduced demand in some sectors. While some ports have seen a rebound in traffic, particularly those handling essential goods like food and medical supplies, overall volumes remain lower than they were before the pandemic.
- FMC has been granted new powers to block anti-competitive agreements between ocean carriers, a move aimed at promoting fair competition and protecting consumers. Under the new rules, the FMC will have the authority to block agreements between carriers that could lead to price fixing or other anti-competitive practices
These are only several changes that occurred in more than 250 bn freight rates across 25 million routes with more than 1 million market players. Want to share some news about your company, services, and routes? Just post them on MAXMODAL, a multimodal network that digitally connects routes and rates worldwide to automate sales and operations across container transportation & logistics industry. Join to innovate.
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