News digest. 14 Dec

And just like that – the hopes for spot rates decline divert. 

For a while, after spot rates plateaued, it seemed like a decline was lingering over the horizon. However, these days show that the shipping sector is up for a new spike. According to the new data, Asian rates were up 1.8% to 4,811 points, reversing previous declines. Experts comment that with growth in consumer spending, container rates and containership charter rates will remain elevated at least until Chinese New Year 2022. Shipping lines are saluting as for them it is good news – they are on track to earn a record $115bn to $120bn in profit in 2021. They also do not stop further expanding. Wan Hai Lines, the leader of box facilities efficiency, has broken its piggy bag with $320m inside for more for secondhand ship acquisitions. It now holds the 10th position in the rank of the largest container lines. 

 In the meantime, it has turned out that the reports on the state of congested ports in California might have been exaggerating the improvements. There are currently 101 boxships spreading out across thousands of miles of North American coastline, stretching deep into Mexico. The progress has been shadowed by the increasing dwell times at the major ports globally.  In Europe, Rotterdam is reported to have an average 6.76 days export dwell time. Having assessed the potential damage, the port’s authorities are planning to invest in the facilities to boost competitiveness. The substance to this drive will be derived from the agreement on port tariffs for the next three years. The indexation of the port tariffs for 2022 amounts to 2.5%. These will then amount to 2.4% in 2023 and 2.3% in 2024. In addition, there will be a new inland port dues system amid to improve cybersecurity, especially regarding information exchange. While it is difficult to unload containers due to congestion, the weather also brings disruptions.  In the Egyptian port of Alexandria, the storm caused the loss of three containers and some other boxes were dislodged and damaged during transit. A similar disaster took place in Kentucky where the train was derailed by a series of tornado storms. Normal operating procedures call for an immediate stop in the face of a tornado warning. 

Italy hops on the train of rail development alongside its neighbors to push local products further in Europe. CLdN Cargo, operating directly from Italy, will focus on further developments partly thanks to the recent breakthrough of Swiss Alptransit rail infrastructure. It will also work on reducing its carbon footprint by investing in sustainable multimodal transport like rail and ro–ro shipping. Other players are also looking for ways to boost efficiency and avoid political clashes. The new China-Europe route will bypass Poland and Belarus and provide a rapid transit time (it is cut by half compared to the sea freight.) It will connect Beijing with Hamburg and other key western European freight hubs via St. Petersburg and become a needed alternative to ocean and air. It is extremely crucial, taking into account predictions for airfreight. The cargo charter demand is destined to remain strong in 2022.  Preighters will stay as well because companies do not expect that passenger capacity will get back to the market that quickly. Finally, Omicron and potential future variants of the virus will have a global effect on capacity as they are going to delay a return to pre-pandemic international travel. All these factors are a clear sign for everyone who was looking for relief in the seasonal first quarter that it is most likely to be postponed.