Global multimodal network updates

Autumn is coming 

Ocean freight  

The container demand that is used to be excessive, is getting closer to the global fleet capacity. The difference is now only 2% indicating a stabilizing situation due to the improvement in schedule reliability. However, the declining spot rates mean a weakening state of the market. If the slump continues, carriers will have to renegotiate their long-term contracts which is not a positive thing in the light of the coming peak season. The ship fuel price is sinking too, it is now almost back to the winter prices. The trend may influence an even deeper drop in spot rates. On the other hand, it may have a positive effect on liners’ costs as they will assume that the price will remain high when setting earnings expectations.

India expands on the use of the north-south corridor by ramping up its cargo movement. The route reduces the voyage time to Central Asia by 40% and costs by 30%, India and Iran are working on bilateral arrangements to include Iran’s Chabahar Port under the INSTC framework. India has already presented six mobile harbor cranes to this port and vowed to keep contributing to the port’s building and expansion. The Port of Turkmenistan will also be joining the route. 

There is a risk that the strike at Felixstowe will last until Christmas as the settlement made by the Felixstowe Dock and Railway Company was rejected by the union. The staff plans to escalate the issue until the company drastically reconsiders its payment policy. At the same time, the strike in Germany has been resolved thanks to a collective bargain so the traffic is expected to stabilize. 

In order not to grant the Chinese unit more strategic control, American authorities stopped the selling of Maersk’s reefer container unit to China International Marine Containers. The deal could have been $987.3m. If it had happened, China could have controlled over 90% of insulated container box and refrigerated shipping container production worldwide in Chinese state-owned or state-controlled entities. 

Rail

• The growth of freight train trips between China and Europe has not slowed down. Recently it has hit the milestone of 10,000 mark. The Silk Road volumes will be discussed during the summit in Poland.
• The Chinese e-commerce hub of Yiwu is out of lockdown after 2 weeks. The backlogged cargo is already being shipped out 
• From September 5, Hupac will increase the rotations for two lines connecting Germany to Europe. The first line, connecting Duisburg Hohenbudberg, in North-Western Germany and Pordenone, in North-Eastern Italy, will double its weekly rotations, from 3 to 6. The second line, linking Ludwigshafen, in Western Germany, with Novara, in North-Western Italy, will also see its rotations increase from 5 to 6 per week.
• A new rail freight connection has been established between the Chinese hub of Xi’an and Hanoi, realizing the first Vietnam railway connection with Shaanxi province.

Other 

•  The rise of the oil prices by 42.5% announced by the Bangladesh government has forced inland container depots in Chittagong to increase diesel-linked service charges by 25%. The export goods stuffing package rate will be increased to $70, from $55, for a 20ft container, while a 40ft box will incur a new rate of $90, from $72. 
• To handle the demand for coal following the cut of gas suppliers, barge surcharges in Europe have ramped up 150%. Low water levels are also not saving the situation. With rail capacity being block-booked, rail cannot serve as an alternative either. 
• Iris Logistics has switched its ship, Iris Paoay, which was originally deployed on transpacific. The ship is now trading between Manila and Thailand. 
• CMA CGM Group has added another vessel to SHAKA 2 service but the current rotation will remain unchanged: Shanghai – Ningbo – Tanjung Pelepas – Port Louis – Durban – Tanjung Pelepas – Hong Kong – Shanghai. The company flagged off a weekly Penang-Padang Besar block train service and opened a new container deport in Penang Port, Malaysia.
• Indonesian port operator Pelindo and a consortium of the country’s sovereign wealth fund have entered an agreement to invest in the expansion of the Belawan New Container Terminal (BNCT) on Sumatra Island.
• A new container route with Multi-Carrying Vessels will be launched by P&O Maritime Logistics across the Red Sea.

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.