Asia | US news digest. 17 June
The U.S. shippers are getting more frustrated as rates grow further. Is the government able to help? Yantian offers a glimpse of hope that the congestion might resolve in the near future.
The current situation simply does not allow any room for further debates over strategies for improvement, since another week has brought a new increase in freight rates. This is particularly true for the Port of Shanghai on several trade routes. On the route to North America, spot rates climbed 0.9% to US $8,554 per FEU to east coast ports but fell 3.5% to US $4,658 per FEU to those on the west coast. In addition, thanks to the recent data, experts have identified the following pattern – the difference between the low range and high range of rates paid by shippers on the Asia-Europe trade had increased significantly on the spot market, from around $300 per FEU to more than $1,200 per TEU. By now, all caries have applied congestion surcharge on the refrigerated containers. The small shippers have suffered the most in comparison to the large ones. However, there is a glimpse of hope that things will improve – YICT has informed customers that the bottleneck at the port had eased. Current overall operational capacity has returned to 70% of normal levels, and container yard utilization has dropped from 100% to 70%.
The frustration of the U.S. exporters has hit its new milestone. They have accused carriers of billing for detention & demurrage charges even when empty containers have been returned. As a result, this increases costs and time spent battling with shipping line administrators – daily for some – to rectify errors. There are numerous complaints about the lack of export options and the overall state of the American supply chain. In turn, the National Retail Federation (NRF) has called Joe Biden to address port congestion crises. Having announced the creation of a Supply Chain Disruptions Task Force, the government is discussing taking drastic action to force global liners to take all US export container bookings, addressing the aforementioned issue with shippers. The U.S. ports are undergoing incredible pressure. The Port of Los Angeles stated that it had earned the distinction as the first port in the Western Hemisphere to handle more than 1 million TEUs in a single month. It has been reported that it is one of many U.S. ports that is having severe congestion issues because of the veritable tidal wave of imports.
Apart from dealing with multiple delays and skyrocketing rates, some of the companies become targets of cyber-attacks. It has been confirmed that the recent HMM’s incident was an attack indeed. However, most of the claimed damage has been restored and no information or data leakage was found.
In order to ease the tension at least in one of the sectors, the U.S. and the EU agreed to suspend tariffs on $11.5 billion worth of goods for five years. The list of goods includes food, wine and spirits, and machinery, which were embroiled in a dispute over subsidies to Airbus and Boeing. Although the trade blocs have resolved the aircraft dispute, the tariff suspension does not allow spirit importers and exporters to emerge, so the question of the efficiency of this measure is up for debate according to experts.
MSC continues its tremendous growth. The 60 ships bought have a combined capacity of 257,000 TEU and have taken MSC’s fleet recently past the 4m slot mark. Another industry giant, Maersk, has collaborated with ERS/BoxXpress.de to facilitate hydropower renewable energy, placing bets on sustainability. Seaspan Corporation is close to finalizing orders in China for 20 boxships of around 7,000 TEU, with deliveries set to begin in 2023. The Northwest Seaport Alliance has made a milestone by using four ZPMC Super-Post Panamax cranes to the Seattle Harbor. The new Terminal 5 cranes will begin moving cargo at the beginning of 2022.
Evergreen’s epos has been going on for 2.5 months already and yet, there is no light at the end of the tunnel in terms of an agreement between the sides. The SCA has reduced its claim from $916m to $550m, but firmly rejected an offer from the Japanese owner of the ship of $150m to free the vessel. It is going to be a long way for both parties to resolve the issue. However, the losses do not wait. The longer this saga continues, the greater will be the damage arising out of the incident. Experts urge the parties to consider all the options available including the release of the vessel from arrest especially now when containership capacity in such short supply and demand is remaining high.
