News digest. 16 Oct
When the congestion fills North Europe to the brim, the UK government seems to be ready to act. Why does a threat of collapse appear to be the only stimulus?
Oil on canvas: containerships waiting at ports have become a common scene for the canvases of the EU, The US, and Asia. Even when the situation in NorthEurope is less severe than in the States (although some of the vessels at anchor in northern Europe are far larger than those in San Pedro Bay waiting to berth), the recent data has shown that, at least 20 boxships heading towards Antwerp, Rotterdam, Hamburg, Felixstowe (where the stack density is reaching 92%), or other major ports are queuing. America keeps breaking new records. The Port of Long Beach has registered its second-highest September as unprecedented numbers of vessels wait off the West Coast to unload cargo. At the same time, empty containers moved through the port also dropped by 3.6%. Overall, there is a 5.9% decline in throughput compared to the same period in 2020. So far, moving operations to the 24/7 work schedule has seemed the only solution. Rates and capacity are still tight as more ships start to omit ports; the spot rate for a 40ft to the US West Coast jumped by 8.5% on the week, to $17,377. For East Coast ports, the spot rate increased by 6.5%, to repass the $20,000 marker at $20,695 per 40ft. On the EU tradelane, the rates are still plateaued at $14,492 per the same container in North Europe, and some experts are hopeful for a possible decline. The ships’ prices are soaring too alongside the elevated spot rates. This disrupts the intention of the South Korean authorities to provide funding to local liner and feeder operators through ship sales and leaseback. The plan was crashed after the prices went up, leaving the officials waiting for better times when the residual value drops.
The fate of the businesses struggling with drivers’ and overall delivery options has become a routine for the UK companies long ago. After the government After the UK government botched attempt to belatedly relax visa rules for a limited number of EU hauliers, many enterprises failed to attract significant interest to the sector by using their stimulus. It became clear that the solution is in the hands of the officials, thus they proposed a possible temporary unilateral legislative extension of road haulage cabotage. The proposal is to allow unlimited cabotage movements of heavy goods vehicles for up to 14 days after arriving on a laden international journey into the UK. However, it is still a short-term solution and does not diminish the importance of developing a more diverse domestic workforce.
With shipping prospects rising, there is still a problem of the existence of too many shipping stocks instead of consolidated categories. Although an updated analysis has shown that this number is shrinking, the remaining public players are no bigger. Consolidation has been the major cause of it as well as takeovers by shipping companies – a big trend of acquisitions that goes beyond U.S.-listed shipping stocks all the way to North Europe. Another trend of companies starting to charter their vessels is evolving too. Amazon decided that it would send boxes on the deck of the Norwegian multipurpose operator that is ideal for carrying unconventional containers.
With more challenging on the way, the environment will continue to encourage companies to explore methods to organize their supply chain models in an effort to get their products to market and avoid shortages. This search for a new strategy concerns other sectors that Amazon is willing to explore. For example, airfreight. Some sources report that Amazon is going to acquire a significant number of long-range, wide-body freighters that could fly goods from China and the Asia Pacific region to the US to tackle the problem of bottlenecks. The e-giant has declined this statement, although this method (especially since airbus freighters announced their commitments to e-commerce) should not be underestimated as it would allow the company to establish an ex-Asia airbridge, channeling shipments directly into airline arm Amazon Air’s US network of dedicated airport hub, avoiding delays. The latter is extremely important in the light of the peak season and the forecasts that air capacity will tighten before we even blink. Amazon has already missed the moment when transport costs surged. Now it is trying to induce consumers out of their homes to collect their online purchases from a drop-off point nearby. Anticipating the coming issues, such companies as FedEx have already launched additional flights.
No sooner did the EU recover from the German strikes than the new ones crushed it, this time in the south. Following the introduction of “corona tickets” at workplaces, hundreds of strikers have flooded the Port of Trieste’s area. Supply problems are expected, however, they probably will not last for long as the majority of the ports support this sanitary measure. As for Germany that is gradually recovering, the recent initiative concerns the strengthening of the freight traffic via the Betuwe route – where up to 70% of the traffic between the countries occurs – by starting the new tests of the Automatic Train Operation. The goal is to have a locomotive ready for testing on the route in 2025. More connections are on the way in India as well. APM Terminals Pipavav has become the first Indian port to connect to the Western Dedicated Freight Corridor after
