News digest. 17 Aug
It seems like striving to become Jack of all trades will not be a winning strategy. Perhaps, on the road to recovery industry players should remain in their sandboxes and focus on what they do best.
The global nature of the crisis has clearly demonstrated how important each gear, each player is, therefore, it is no wonder that experts call for every actor in the freight industry to focus on their specialized field. However, Maersk has long had a different approach – it tries to do both, being carrier and forwarder under one brand, which raises concerns regarding the efficiency of this strategy of such players as DB Schenker. The latter cut the ties with Maersk in favor of its stable cooperation with CMA CGM. Some experts also believe that freight forwarders should refrain from chartering ships for their own cargoes, as vessels could get much better utilized by the ocean carriers.
Meanwhile, the situation is getting more intense since it has become clear that ocean carriers are considering a new round of blank sailings from Asia around China’s national holidays. Usually during this time carriers cut capacity to mitigate the erosion of rates, but taking into account the current context, there has to be some network adjustments. Moreover, there has been no sign of any easing of the record-high rates and the recent announcement of the new ones only serves as proof. Hapag-Lloyd will apply another tariff rate increase of US$500 from to the Mediterranean. MSC will push up its FAK rates for the trade between European ports in Antwerp, while CMA CGM will raise its FAK rates from North Europe and so on.
The battle against shipping lines monopolies has relocated to another Asian country. This time, it is Indian exporters who are advocating for the Competition Commission of India to investigate possible cartelization. The Philippines mirror the situation where carriers are under the spotlight for their pricing ploys.
As Ningbo-Zhoushan port remains closed for sixth days straight, and overall pressure is not expected to ease up, rising delays continue to undermine global supply chains. The problem is that the time variances are significantly differentbetween the US West Coast vs East Coast ports, which makes it incredibly difficult to adjust.
Capacity shortages have been the leitmotif of different sectors including road where they have driven up European road freight spot prices close to a three-year high, which creates inflationary pressure on the economy. The new updates have shown that road freight capacity in automotive fell by 8.3% in July and was 22.9% below the level of the same period last year.
Another horseman of the crisis, equipment shortages, has forced Yang Ming to follow its liner peers in ordering more containers to tide over the challenge.
The heat rises in North America’s direction and two major Canadian railways eager to acquire Kansas City Southern are in charge of it. Shippers will get the biggest advantage since the initiative connecting more of North America on one line and providing access to the entire Gulf, East and West coasts will enlarge the opportunities for trade.
Cancelations are not only the headache of the Chinese shipping sector, but of the airfreight too. Meanwhile, freight rates from China are already on the rise. Prices to the US had increased by $1.5-$3/kg, while rates to Europe were up $0.7-$1.5/kg.
European intermodal services are still dealing with the aftereffects of the German strikes. The key to a faster solution is a negotiable offer to the GDL that would include an investment of the taxpayers’ money in railway workers. However, not everything is so gloomy above EU rail – The North Sea – Mediterranean rail freight corridor is open again for trains. Moreover, Hupac will add a new terminal to its network. Duisburg Hohenbudberg will be the company’s new stop on the way to Poland.
Although it is difficult to imagine any region that would demonstrate any kind of stability, the New Silk Road comes into the spotlight. Despite the growing traffic, (the operator expects a 20% increase this year), it is aligned with the expansions of the terminals and emergence of the new hubs and additional capabilities.
Challenging times require joint efforts, so US President Joe Biden is planning to bring stakeholders together to alleviate the congestion at West Coast ports. They will look to repair and maintain backlogs, reduce congestion and emissions near ports and airports.
The green agenda remains on the list of priorities for development with Mammut making an ambitious commitment to transit to zero-emissions shipping vessels by 2030. It is a call for other companies to brace up as those with the most efficient strategy will not only improve the environment but most important become more competitive.
DP is about to revolutionize how ports and terminals operate with the BoxBay solution. Operating costs are lower than anticipated, with energy costs better by 29%. It will increase the over-the-quay-wall handling volumes and container storage capacity.
