Navigating through changes

Trying to save profits, shipping lines are considering the temporary suspension or merging of some Asia-North Europe loops to decrease the impact of a significant drop in bookings and to slow the decline in freight rates. They can also be forced to hoard more eastbound transpacific US west coast loops. Another scenario in light of the dipping rates, in order to restore the supply-demand balance, boxship demolition can take place. 

Meanwhile, the battle between shipping lines and their customers is intensifying as the EU Commission is deciding if it needs to extend the Consortia Block Exemption Regulation allowing to share vessels. Lines see vessel-sharing as a tool to maximize efficiency, while customers claim that it will give the alliances more competitive advantage and result in continuous unfair practices. 

Charterers have already started imposing their terms of conditions. Owners are again being asked to position vessels and grant charterers flexible options for extensions.

The over-the-roof demand during the pandemic has spiked a record orderbook, and now the drop in demand will see the looming overcapacity. But there are exceptions. Mediterranean markets report that there is a risk of feeder containership shortage because of the impact of environmental regulations on an older fleet that tighten available tonnage. Alibaba-linked Transfar Shipping is already gearing up for its most significant expansion.

Vietnam has a chance to become the next locomotive of Asia’s fastest-growing economy in 2022, but there are possible risks ahead for cargo. Vietnam relies on China’s raw materials, and China has not been at its best lately. It is also unclear if Vietnam has the ability to deal with exposure to economic downturns in major markets.

A government tax levy is a next misfortune for Indian exporters. From 1 October, exporters must meet a tax slab of 5% on ocean freight and 18% on air freight charges. The community feels pressured especially in the current situation when the demand is dropping implicating a decrease in the long-term contract rates.

Routes and services 

• Iraq is betting on its future mega-port, depending on the transhipment to Turkey provided by the Iraqi Republic Railways, to become a sufficient alternative to Jebel Ali and Suez Canal. The Grand Port of al-Faw is expected to receive its first ship in 2025.
• Starting from November, CMA CGM will apply new peak season surcharges from North Europe to Central America and the Caribbean: $150 surcharge from North Europe, Scandinavia, and Poland to Windward, Guyana North Brazil, Trinidad & Tobago for dry and reefer cargo. From November 6, a PSS of $150 From North Europe, Scandinavia, and Poland to East Coast Central America & the Caribbean, Guatemala, Costa Rica, Nicaragua, Honduras, El Salvador, Belize, and Panama for both dry and refrigerated containers.
• China will invest in the construction of a rail-dedicated bridge along the Thai-Laotian border for easier freight flows.
• Hupac launches new intermodal service between Pordenone, Italy, and Gliwice, Poland. 
• The International North-South Transport Corridor is picking up on its activity. There are now multiple routes from Russia to India via Turkmenistan and Iran. 
• CMA CGM launched a new butterfly Morocco Shuttle service between Morocco, France, and Spain. The rotation will be: Agadir / Port Vendres / Barcelona / Algeciras / Tanger Med / Casablanca / Agadir.
• Hapag-Lloyd is adding Shanghai to its China-Germany Express service and replacing Le Havre with Antwerp.
• MSC has added Fiji to the Noumea Express service.
• MSC has added Port Everglades to its Zephyr service. The rotation is: Shanghai / Ningbo / Busan / Cristobal / Houston / Port Everglades / Savannah / Lazaro Cardenas / Shanghai.
• Together with METRANS, DCT Gdańsk has opened a direct rail connection to the Czech Republic.

Other

• Hapag-Lloyd is planning to expand greatly by buying SM SAAM’s ports and logistics subsidiaries for almost $1bn. The company claims that Latin America is one of its stronghold markets. For 2023, it identifies greater terminal ownership as one of the key priorities. 
• Following Liverpool strikes and as a result, the decline in the movement of container cargo, a redundancy consultation process will soon take place. 
• A strike may take action in South Africa. The salary dispute is between Transnet and the United National Transport Union. 

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.