Asia | US news digest. 29 June
Is the post-pandemic world a new dawn for China? It is a tricky game of aiming to be first in the race. At least, Amazon can tell.
Among the candidates for the fastest recovery, China was probably the last one with continuous congestion, COVID-19 outbreak and the following lockdown. However, the forecasts about the virus crippling the country’s economy did not live up. Chinese exports are now much higher than they were before the pandemic, ships are full, and the county is experiencing the broadest economic upside. The ships at anchor waiting at California ports highlight the demand for Chinese goods as well, and despite all the talk of supply chain diversification, American sourcing remains China-centric.
In the light of the over-the-moon rates and disrupted supply chains worldwide, the most obvious solution would appear to be for the shipping lines to lay on more services and get things back to something manageable for importers. However, the lines are signing fewer long-term contracts and pushing customers, large and small, towards the erratic and extortionate spot market. The latter simply risk running out of cash.
Additionally, the reality is pushing shippers to pay 332% more per box than they were this time last year, according to the latest data. At the same time, yet they’re having to put up with the worst schedule reliability in the history of containerisation. Having taken this matter into account, some companies launched an initiative to provide full transparency on its schedule reliability for the sake of maintaining customer loyalty.
Major shifts in online retail might be witnessed in the near future as Amazon’s logistics arm, built around its Fulfilment By Amazon product, is in danger of being cut off from its online marketplace. If the US government paves the way into this initiative, Amazon will have to take onboard third-party business which can possibly lead to an increase in prices.
Meanwhile, e-commerce is on the rise for such companies as FedEx. It will invest in 20 more cargo jets as e-commerce continues to drive global growth of the parcel sector. In particular, it drove a 28% increase year-over-year increase in the company’s returns business.
As for rail, India aims to pace up developments in countries belonging to Central Asia thanks to the International North-South Transport Corridor as an alternative to the traditional routes carried out by sea through the Suez Canal and the Mediterranean, and the Baltic Sea. Can India become a leading rail freight force or will it have to move over?
While the question “to be or not to be?” will always be worthy of asking, another one about reshoring is up again. Experts note that accepting that there is scope for some ocean freight to migrate to air to get round the present logistics difficulties by ship, in most cases the business model of shippers is not able to bear the transport costs.
The stakes are very high for Canada where supply chains have already been under strain from the unprecedented volatility and surge in demand. Thousands of members of the Canada Border Services Agency are in the midst of voting on whether to authorize a strike . However, a shutdown of all ports is not planned.
MSC shows no sign of slowing down its buying spree with new data reporting the acquisition of another five boxships. The company already added around 60 secondhand vessels over the last 10 months, and now they have bought more Borealis Maritime’s 2,474 TEU.
Following an engine room fire that MSC Messina suffered, it has been reported that one of the 28 crew member team is missing. They flooded CO2 to control the fire, but once it was gained, the smoke was still coming out.
