The multimodal network news digest - issue #38
Going up! The Drewry World Container Index has ended its decrease due to a surge in transpacific spot rates by 3.8% The trade lane between Shanghai and Los Angeles, which had seen a notable decrease in prices, experienced an 11% increase in prices during the week. They rose from $1,674 to $1,856, marking a significant recovery. Industry experts have started to express the view that the container shipping sector has turned the corner after the supply chain disruptions more confidently. Blank sailings are believed to have contributed the most to the improvement since carriers have been trying to prop up the General Rate Increases (in some cases, not so successfully).
However, industries like the US trucking can hardly feel the positive changes. Following the "freight recession," with weak demand and oversupply leading to a prolonged period of low rates and low profits, many smaller trucking companies have been forced out of business, while larger firms have struggled to maintain profitability. Despite the challenges, some analysts believe that the industry is likely to rebound in the coming months.
The upward trend also affects charter rates and is making ship owners hold back their plans for vessel scaping. Companies are reluctant to dispose of vessels that could still command high charter rates that, in their opinion, were boosted by stronger demand for shipping services.
Yet again, as companies hurry to reinstate previously canceled sailings on the transpacific and Asia-Europe trade routes, in anticipation of a rebound in demand for shipping services, it may be too early to do so. Some industry experts have expressed doubts over whether the carriers' optimism is justified, noting that the market remains highly volatile. Carriers who ramp up capacity too quickly could end up exacerbating the supply-demand imbalance.
Hot topic
- Longshore and Warehouse Union and the Pacific Maritime Association are on the way to a consensus about a new labor contract for West Coast dockworkers. Some blocking points still remain in regard to the use of temporary workers and the scope of work for union members.
- CMA CGM is in talks with the Bolloré Group to acquire its stake in logistics and transportation operations. The acquisition would give CMA CGM greater access to the logistics and transport market in Africa, where Bolloré currently has a significant presence.
Routes & services
- Vietnam is emerging as a significant destination for US-bound container exports, with a growing number of US shippers choosing to route their goods through Vietnamese ports instead of Chinese ports due to a variety of factors, including lower costs, fewer delays, and the ongoing trade tensions between the US and China. Overall, Vietnam saw a growth rate of 156% in containerized trade into the US between 2017 and 2022.
- Hupac is launching a new direct rail freight service between Warsaw, Poland, and Rotterdam, the Netherlands. The service, which will start operating on May 1, 2023, will run five times a week.
- On April 19, 2023, Russia, Kazakhstan, and Turkmenistan formed a joint venture to increase freight transport along the International North-South Transport Corridor to develop a more efficient and cost-effective transport route linking the Indian Ocean with the Caspian Sea and beyond.
- ÖBB Rail Cargo Group has announced the launch of two new intermodal connections between Italy and Austria. The first service, which started operating on April 11, 2023, connects the Italian city of Bologna with the Austrian town of Wels, while the second service, which will start on May 8, 2023, links the Italian city of Padua with the Austrian town of Wolfurt.
- The rail border between Poland and Belarus is still experiencing delays, causing disruptions to freight transport along the China-Europe rail corridor. The delays are due to stricter border controls implemented by Belarus in response to security concerns.
- CMA CGM has imposed discharge restrictions on the Port of Douala in Cameroon due to concerns about the safety and security of its crews and vessels. The restrictions, apply to all cargoes destined for Douala and will remain in place until further notice.
- ONE has announced changes to the port rotation of its Philippines Express (PHX) service. The new rotation will be Singapore – Manila (North) – Cebu – Singapore, with a bi-weekly frequency starting from M/V CONTSHIP ERA 081N/S.
Other
- Schneider National and Canadian Pacific Kansas City, a joint venture between Canadian Pacific and Kansas City Southern (CPKC), have announced a new intermodal partnership to connect Mexico with the Midwest region of the US combining Schneider National's trucking expertise with CPKC's rail network. The service will run from the Port of Lazaro Cardenas in Mexico to Chicago.
- The European Commission has proposed a new Carbon Border Adjustment Mechanism (CBAM), which would impose a carbon price on imports of certain goods from outside the European Union.
- The ongoing disputes in France are not expected to have a significant impact on the cargo backlog on the River Rhine. Despite the disruption caused by the protests against the French government's policies, the flow of goods on the river has remained relatively stable.
- Taiwanese TS Lines has sold two more feeder vessels as part of its ongoing fleet streamlining efforts.
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.