The plummet goes on
Shipping across several cargo markets between China and the US is dropping. Demand for Chinese goods is falling at the same time COVID-19 lockdowns and weather problems are pressuring Chinese manufacturing and logistics. Full inventories in Europe and the US also lead to dropping capacity demand.
The rail sector in the US is struggling with handling even the current imports from the ports and considering modifying Asian import flows. Also, vessel congestion has soared at east coast gateways. Forwarders are expecting it to keep rising.
The energy crisis in the EU is causing spot rates to plummet. Drewry’s spot rate from Shanghai to Rotterdam, Netherlands, dropped 18% since July, from $9,280 per FEU to $7,583. Spot rate from China to North Europe has fallen 24% over the same period. As a result, contract rates become a sensitive topic. Carries want to negotiate to keep their revenues high, while shippers demand to lower the prices. This will result in a widening two-tier market.
Charter rates are softening too. The New Contex charter index in Hamburg dropped 3.2% last week to duck below 3,000 points for the first time since January.
Surging costs are putting pressure on the rail sector. Some countries have already established fixed electricity prices to stabilize the situation.
Felixtowe congestion looks gloomy in the shadow of the expected Liverpool strike. The spirit spreads over other EU ports: German, Dutch, and recently Valencia has joined. Congestion causes demand to hold up and is helping fuel rail demand from European exports to China.
New service developments:
- A loaded truck from Nhava Sheva Port/JNPT has been launched between India and Iran. Its destination is Moscow.
- A new MEDGULF service by CMA CGM. Rotation: Tanger (Morocco), Genoa (Italy), Valencia (Spain), Miami (US), Veracruz (Mexico), Altamira (Mexico), Houston (US), Tanger.
- India lowers the annual land license fee to 1.5% to encourage rail investments and to have 300 rail-linked freight terminals built in five years.
- Hupac inaugurated its new terminal in Brwinów, Poland. It will allow for the consolidation of trains to Russia and China with goods from all over Europe.
- COSCO has launched the first Qinzhou-Luzhou regular sea-rail block. The transportation is expected to take 3 days.
- SAFEEN Feeders has launched a new UAE-China service connecting Shanghai, Qingdao, and Ningbo directly with Khalifa Port in Abu Dhabi.
- SAFEEN Feeders will also team up with CMA CGM Group in launching a new Southeast Asia service linking Singapore, Colombo, and Chennai.
Other:
- The Chittagong Customs is destroying cargoes to free Chittagong port’s yard space. In response, some importers file cases in the courts so that their cargoes are not auctioned or destroyed.
- Congestion is lingering in Bangladesh. Importers are waiting around 11 days for their cargo to be released after arrival at the country’s seaports and a week at airports. The options on how to ease the paperwork of the entry procedure have already been presented.
- Deutsche Bahn and the German government have agreed to sell DB Schenker. The current valuation is between 12 and 20 billion euros.
- An empty container transportation center has started operations at the Port of Shanghai with the capacity to handle a throughput of 3 million TEU per year.
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.
