EU | UK news digest. 16 July
To comply or not to comply with the high rates? This is a question that has become not a matter of choice, but a decision forced on hauliers by shipping lines to accept the rates and the sale of driver services as a product one can buy off a haulage market. Being severely underpaid and pressured by the pandemic and Brexit, workers are now looking for more attractive alternatives such as warehouses and supermarkets. If the policy regarding payments does not change, the drivers’ labor market risks drying up. Apart from hauliers frustrated with the shipping lines, forwarders also join the club of those considering shipping lines, looking to impose haulage surcharges for cancellations and amendments into the UK, unfair. They argue that it puts the letter into a favorable position and enables them to generate vast profits while the rates continue to rise and everyone else in the industry is struggling.
With increasing demand and tight capacity, experts expect the peak season to start earlier this year. Hence, cargo owners are being urged to book early. Even the large shippers have been impacted, so for now it seems like taking care of the pending orders in advance is the only reasonable alternative, especially if the forecasts are true and capacity limit along with high prices will extend beyond 2021.
Another major milestone on the green frontier has happened with the initial reaction to the Fit For 55 Green Deal policy revision being evaluated as largely positive. NGO Transport & Environment has welcomed the provision for green fuel use in aviation and maritime to cut emissions through the EU Emissions Trading System. Although it criticized the maritime element of the policy, it is still a major step towards sustainable development. There is also a mandate to increase the production and use of SAF. In turn, forwarders have called for an international standard on offsetting indirect emissions since there is no legislation on this matter yet and it is unclear to what extent the companies will commit to a new agenda. In addition, among the changes, there is a new Carbon Border Adjustment Mechanism approved by the EU. It aims to put a carbon price on imports of a target selection of products to ensure that ambitious climate action in Europe does not lead to carbon leakage.
Western European rail has fallen victim to floods with the most affected areas in the Netherlands, Belgium, and Germany. The damage on the tracks is already considerable, and, according to experts, it will take a while, even weeks, before traffic is back to normal. Despite the fact that in general rail has been portrayed as a promising sector, it has not managed to avoid the drawbacks of the pandemic. Although volumes returned to normal levels between March-May 2021 for infrastructure managers, this does not apply to their revenues. Specifically, their losses remain at approximately -10%.
However, the sombre picture for rails is not so discouraging for ADY Container, a subsidy of Azerbaijan Railways. Recently it has decided to extend its collaboration with Pasifik Eurasia by setting up a new project where ADY Containers will transport cargo from Azerbaijan to Turkey. After it, Pasifik Eurasia will carry it forward to Europe. It plays a significant role in keeping the BTK line active and increasing its volumes.
COSCO is up and thriving. The Red Sea Gateway Terminal has announced the completion of a 40% equity sale to the Public Investment Fund and COSCO Shipping Ports. The investment in RSGT is aligned with PIF’s 2021-2025 strategy focusing on key priority sectors, including Transport and Logistics and capturing significant intra-Red Sea trans-shipment cargo volumes. Meanwhile, Hapag-Lloyd is not going to lose its position and closes the acquisition of Nile Dutch Investments B.V. planning to complete commercial integration by the end of 2021. The acquisition will strengthen Hapag-Lloyd’s position in West Africa.
