News

Supply chain software company Shifl said there had been a recent acceleration in the drop in spot rates and carriers are attempting to renegotiate long term contracts secured when rates were higher. High longterm contract rates are expected to support container line earnings well into next year, stretching the financial benefits to lines of the congestion-backed peak in rates last year.

Both Hapag-Lloyd and Yang Ming said shippers have asked to renegotiate deals, the former saying it is standing firm and the latter open to hearing customers’ requests.

“With the increasing pressure from shippers, shipping lines may not have a choice but to accede to customer demands as contract holders are known to simply shift their volumes to the spot market,” said Shabsie Levy, CEO and Founder of Shifl.

The pressure on lines and shippers alike comes from a steep drop in spot rates. Shifl’s forwarded-driven rate index Shifex recorded its lowest rate for two years on the Shanghai-LA route; at $3,500 per feu, the rate is down 80% on-year.

On the China-New York route, rates have held up slightly better but are still down 59% on-year at $7,950 per feu compare to a high of $19,600 in September 2021.

“While in July, there was a relatively steady decline in spot rates, the pace has definitely picked up as a milieu of factors continue to soften the market for containerized goods between China and the rest of the world. Tightening monetary policy, a shift in consumer spending, bloated inventories in the US, and growing geopolitical tensions between the US and China continue to play a role in the movement of rates,” said Levy.

“With the latest dramatic slump in rates, the market is closer than ever to the pre-pandemic rate levels, especially to the largest entry ports in the USA – Los Angeles and Long Beach,” said Levy.

Shifl also noted a drop in transit times on Asia-US routes as congestion—one of the factors that supported high freight rates over the past two years—begins to clear.

Transit times on the main China – LA/ Long Beach route fell by 25% in August to 24 days, levels last seen in July 2021 and moving closer to pre-pandemic levels of 16 days. That reduction is partly fuelled by a movement of cargoes from the West to East coast, however, and China-New York transit times edged up from 46 to 50 days in August.

“The ripple effect of the shift in cargoes from West Coast to East Coast is taking its biggest toll now in New York with an overflow of empties and shortage of chassis. We expect this to improve soon as lower volume forecasts will ease the pressure off the system,” said Levy.

Source: https://www.seatrade-maritime.com/containers/shippers-push-contract-renegotiations-spot-rates-tumble

Bringing to an end a surge in cargo seen in the latter half of 2021 through to July 2022 the Port of LA handled an estimated 806,000 teu in August this year, 15% lower than the same period last year.

A gateway for US imports the Port of LA saw a 17% drop in loaded imports 404,000 teu in August, while loaded exports decreased 1% to 100,000 teu, compared to August 2021. The volume of empty containers handled declined by 18% to 301,000 teu.

It was a different picture at the Port of Long Beach where volumes handled were buoyed by empties but also the fall in imports was less dramatic. Long Beach handled 860,940 teu in August, down just 0.1% on the same month in 2021.

Imports at the Port of Long Beach were down 5.6% to 384,530 teu and exports increased 1.6% to 121,408 teu. Empty containers helped push volumes as a whole and increased 7.2% to 301,001 teu.

The sharp drop in loaded imports at the Port of LA comes at a time when traditional volumes ramp up ahead of the peak holiday season.

“Some goods that usually arrive in August the for the fall and winter season shipped earlier to make sure they reached their destination in time,” Port of Los Angeles Executive Director Gene Seroka said at a news briefing. “Additionally, inflationary concerns and elevated inventory levels have made some retailers and e-commerce sellers more cautious.”

Carriers and shippers have also sought to reroute volumes away from US West Coast ports due to the possibility of a labour strike members of the International Longshore and Warehouse Union (ILWU). This has resulted in a build-up of congestion at US East Coast ports.

The possible threat of a strike remains as negotiations between ILWU), and the port terminals, represented by the Pacific Maritime Association (PMA) continue. Although the existing contract expired on 30 June both sides have committed to maintaining service levels while negotiations continue.

Meanwhile Seroka repeated statements from a month earlier about spare capacity at the Port of LA’s terminals. “We’ve got capacity on our terminals and the ability to handle cargo coming in more efficiently than last holiday season.”

Port of Long Beach Executive Director Mario Cordero, said, “We are collaborating with stakeholders to provide more information, more space and more flexibility across the supply chain.

Around 1,500 military and civilian personnel from NATO and partner countries are gathering in Portugal this month for two maritime exercises aimed at testing the interoperability of new maritime unmanned systems. Both exercises are being held in areas around the Troia Peninsula.

Photo: Portuguese Navy

Exercise REPMUS 22, held from 12 to 22 September, brings together a wide range of contributions from NATO and partner countries, NATO Centres of Excellence, the NATO Centre for Maritime Research and Experimentation (CMRE), as well from industry and academia. During this period, around 1,500 personnel are testing the coordination of unmanned systems above the water, on the water and under the sea. Approximately 120 unmanned assets are being integrated into a single network for a range of experimentation scenarios. REPMUS 22 is led by Portugal and supports the NATO Maritime Unmanned Systems Initiative (MUSI). The NATO Maritime Unmanned Systems Initiative (MUSI) was launched in October 2018 to promote interoperability in the development of Maritime Unmanned Systems and since then it has been playing a growing role in the REPMUS exercise series.

Dr. Giorgio Cioni, Director for Armament and Aerospace Capabilities in NATO’s Defence Investment Division, welcomed the exercise, saying: “This is the first time that so many NATO nations have the opportunity to test the effectiveness of so many systems, concepts, techniques and procedures related to Maritime Unmanned Systems, ensuring they can work seamlessly together.”

Exercise DYNAMIC MESSENGER 22 will take place from 23 – 30 September 2022 with an emphasis on integrating maritime unmanned systems into maritime operations. It will be the first-ever exercise with a focus on unmanned underwater systems held under NATO command and on integrating unmanned systems into NATO naval task groups. The exercise will test Alliance readiness to use unmanned systems to counter security challenges ranging from conventional submarine threats, to sea mines and asymmetric threats. Both NATO’s Standing Naval Maritime Group 1 (SNMG1) and Standing NATO Maritime Counter Measures Group 1 (SNMCMG1) will be part of DYNAMIC MESSENGER 22.

DYNAMIC MESSENGER 22 will be conducted under joint leadership of NATO’s Allied Command Transformation in the United States and NATO’s Allied Maritime Command MARCOM in Northwood, UK.

Source: https://www.nato.int/cps/en/natohq/news_207293.htm

A co-operation agreement between The Ashdod Port Company and Port of Barcelona aims to promote Israeli innovation in Europe. Under the agreement, Israeli start-ups from Port of Ashdod’s incubator that successfully complete a pilot programme at the port of Ashdod will be able to conduct a pilot programme at the Port of Barcelona.

“The start-ups will benefit from field conditions in which they can implement their developments, will be accompanied by an innovation agent acting on behalf of the port, alongside the expansion of business and technological opportunities in the Port of Barcelona, one of the largest ports in Europe,” said Ashdod Port Company.

The Barcelona scheme follows a similar arrangement with the port of Newark in the US, where five Port of Ashdod incubator start-ups have launched pilot programmes.

A delegation from the Ashdod Port Company went to Barcelona on September 12 and was led by the Chairlady of the Board of Directors, Orna Hozman Bechor. The participating start-ups in the delegation included:

CYBER 2.0, which has developed technology to prevent the spread of cyberattacks within the corporate network
CYBERVIEW, which has developed an ongoing and effective information security management platform
Airwayz, which is responsible for an operating system that controls a fleet of drones and enables effective supervision
EnWize, which developed augmented and virtual reality technology for training operations teams, which helps to prevent mistakes and create a safe work environment are also part of the delegation.
Captain’s Eye, which offers a network of advanced cameras and image processing that help identify and quickly deal with accidents and security threats

According to Orna Hozman Bechor: “Our technology incubator has a great deal to offer in order to make the world of shipping and ports more efficient, from the field of logistics and transportation to control systems and green energy”

The technology incubator was established in 2021 and has since accompanied over 60 start-ups in various fields, including operations, logistics, cyber protection, and safety, said the port.

Ashdod Port’s Board of Directors recently announced an investment of around NIS 4.5m ($1.3m) in four of the incubator’s start-ups, incorporating the technologies into the port’s work through purchases and royalty agreements.

“Expanding the activity of the start-ups to leading ports around the world is an important milestone for reinforcing the international, technological, and economic connections of the start-ups and their ventures, as well as of the Port of Ashdod and the entire State of Israel as the start-up nation”, said Bechor.

“As Israel’s national port, we are proud to nurture the spread of Israeli innovation overseas.”

The President of the Port of Barcelona, Damia Calvet, said: “At the Port of Barcelona we are convinced that we must welcome the arrival of innovation and new technologies. Tools such as big data, blockchain, artificial intelligence and the Internet of Things will allow us to become more efficient and improve our sustainability and competitiveness.

“The Mediterranean Sea has suitable conditions for the development of a network of smart ports. Through digital transformation and hosting incubators of innovation in the ports, we will be able to increase growth and employ more workers.”

In the fourth in a series of interviews ahead of the Saudi Maritime Congress NMA director, Turki Al Shehri, spoke to Seatrade Maritime News about developments at the academy.

“This is a critical time for the Saudi maritime sector as we look towards its recovery from the Covid-19 pandemic, and also build on the opportunities with emerging new technologies and pioneering ways of delivering maritime training and education as we strive to deliver the ambitions of Saudi Vision 2030 and beyond,” Al Sheri said.

The King Salman International Complex for Maritime Industries and Services (KSIC) alone is expected to contribute $17bn to Saudi Arabia’s GDP, deliver import substitution of $12bn, and provide 80,000 direct and indirect jobs by 2030. The Kingdom’s National Transport and Logistics Strategy, unveiled last year, calls for throughput at its container ports to quadruple from under 10m teu in 2020 to 40m teu at the end of the decade.

“The maritime sector will remain a critical enabler of the world economy and is largely experiencing significant growth in service requirements and operating margins. Recent events in Ukraine are, however, impacting long-term forecasting. We have remained focused in improving our capabilities, installing our simulation complex and updating our curriculum.”

The NMA was set up in 2016 in a partnership between national oil company Saudi Aramco and the Technical and Vocational Training Corporation (TVTC), a Saudi training institute in existence since 1980, with branches in all major Saudi cities.

The Kingdom’s requirements for maritime expertise span the ports, container, bulk, tanker and logistics markets. The National Shipping Company of Saudi Arabia (Bahri) is a top-five global VLCC operator. Saudi Arabia’s economic diversification plans call for the dramatic expansion of its west coast ports and inland logistics, to in order to capitalise on the Kingdom’s centrality to global trade flows.

Based at Ras Al-Khair on the eastern coast, 80 kilometers north of the country’s industrial hub in Jubail Industrial City, where NMA is based, KSIC is expected to be one of the largest shipyards in the world. “This proximity presents us with an advantage towards closer cooperation,” Al Shehri said.

“We currently train a number of members of the KSIC’s future workforce with skills in shipbuilding- related trades. Our pool of trainees come from a number of shipping companies and marine employers such as Saudi Aramco, Bahri and Rawabi Holding, among others,” he said.

NMA’s first cohort of ratings, comprised of 47 students, successfully completed Phase 1—Marine English Language—of their training program in July 2021. “The learners have been studying contextualised maritime English since November 2020 and are now ready to progress to technical training through the associate diploma in maritime studies, and are due to graduate in November 2021,” it said.

Today, women represent only 2% of world’s 1.2 million seafarers, while 94% of female seafarers are working in the cruise industry. “NMA will fully support the IMO’s gender ‘Women in Maritime’ programme, whilst keeping in mind the Kingdom’s traditions and customs. NMA will offer preferential placements for shortlisted female applicants. We will also facilitate maritime training for women that may wish to work in the maritime industry but may not be inclined to work at sea,” Al Shehri said.

“Looking to Vision 2030, consideration of diversity as a whole, not just how it relates to women, will be one of the challenges facing the sector. NMA will promote a maritime culture that encompasses diversity in its broadest sense and will reap wide-ranging benefits and rewards for Saudi society. I am very optimistic about the future of the maritime industry.”

Source: https://www.seatrade-maritime.com/crewing/saudi-nma-critical-component-kingdoms-maritime-development

Despite transporting little more than 10% of seaborne reefer cargo today, the ageing specialised fleet fulfils a vital role in the shipment of perishables, according to Philip Gray, Drewry’s reefer sector analyst.

Conventional reefers earned record rates during last year’s peak season, corresponding to winter in the northern hemisphere. Between January and March this year, large, specialised reefers were earning up to 180 cents per cubic foot, with smaller ships not far behind, typically around 160 cents. This is more than double some of the highest rates seen for many years.

Yet according to a webinar – Reefer Shipping Market Outlook – staged this week by Drewry Shipping Consultants, 40% of these specialised vessels are already more than 30 years old. And there are virtually no conventional reefers on order.

Much of the market in seaborne perishable goods has switched from conventional reefers to container ships. Only about 10% of reefer cargo is now shipped in specialised vessels and the share continues to fall. By 2026, container ships will have advanced their share to more than 90%, Gray predicted.

The three most important cargoes are meat, bananas, and fish, but many other types of refrigerated produce also move by sea. However, delays to container vessels with perishables on board have resulted in significant waste, supply shortages, rising prices, and shorter shelf lives. Last year, the disruption also led to lower banana shipments and reduced pork imports to China, Gray said.

However, despite the small share shipped on conventional reefers, these specialised vessels are very important and, he warned, the sector would be in trouble without them. But as the ships get older, reefers will continue to lose out to container ships.

One transaction three months ago could signal the direction of travel. Antwerp-based Seatrade Reefer Chartering announced an order for four 1,800 teu container ships equipped with high reefer capacity of about 1,200 teu.

The vessels are under construction at Huanghai Shipyard and are scheduled for delivery from October 2023. They are to be deployed in the company’s Fast, Direct & Dedicated (FDD) services taking in a range of smaller ports in key regions.

“Transit times and associated indirect costs are increasing on services operated by larger container lines,” the company said at the time, “and there remains a clear demand for FDD services operated by specialist reefers, specialised container vessels, and hybrid vessels.”

Meanwhile, Drewry expects the sector to clock a 3% compound annual growth rate between now and 2026, although this figure could be reduced a little in the firm’s next analytical period, Gray said. Asia is the largest destination for cargoes and is likely to account for almost 40% of all produce by 2025, up from about 37% today. Asia’s share dwarfs other regions, with the US, for example, accounting for 12% of reefer trade, and Europe 9%.

Source: https://www.seatrade-maritime.com/dry-cargo/specialised-reefer-vessels-set-another-spectacular-season

The SCFI reported on Friday that the index had dropped 249.46 points to 2312.65 points from the previous week. It is the third week in a row that the SCFI has fallen in the region of 10% as container spot rates tumble steeply from the peak early this year.

It was similar picture for Drewry‘s World Container Index (WCI), which has generally shown a less steep decline in recent weeks than that registered by the SCFI. Published on Thursday the WCI fell 8% week-on-week to $4,942 per feu, some 52% below the peak of $10,377 recorded a year earlier.

Drewry reported that spot container freight rates on Shanghai – Los Angeles dropped 11% or $530 to $4,252 per feu in the last week, while on the Asia – Europe trade spot rates between Shanghai and Rotterdam fell 10% or $764 to $6,671 per feu.

The analyst expects spot rates to keep falling saying, “Drewry expects the index to decrease in the next few weeks.”

At present the WCI remains 34% higher than its five-year average of $3,692 per feu.

While different indexes show differing freight rates, all agree on a sharp decline in container spot rates, that has accelerated in recent weeks.

Analyst Xeneta noted rates from Asia to the US West Coast had seen “dramatic declines” compared to the peak recorded earlier this year. Xeneta said that since the end of March, rates from Southeast Asia to the US West Coast have fallen by 62%, while those from China have collapsed some 49%.

“Spot prices from Asia have, to be blunt, been falling considerably since May this year, with increasing rates of decline over the last few weeks,” commented Peter Sand, Chief Analyst, Xeneta on Friday. “We’re now at a point where the rates are down to their lowest level since April 2021.”

The question is how the continued plunge in spot rates will impact long-term contract rates between lines and shippers, and to what extent customers will be successful in pushing for renegotiations. Lines have been enjoying record levels of profitability with the sector raking in a massive $63.7bn profit in Q2 according to the McCown Container Report.

Xeneta’s Sand sees the situation as remaining positive for container lines at present. “We have to remember though, those rates are dropping from historical highs, so it certainly won’t be panic stations for the carriers just yet. We’ll continue watching the latest data to see if the trend continues and, crucially, how that impacts on the long-term contract market.”

A more negative picture was presented by Supply chain software company Shifl earlier this week with pressure for renegotiations from shippers. It said both Hapag-Lloyd and Yang Ming said shippers have asked to renegotiate deals, the former saying it is standing firm and the latter open to hearing customers’ requests.

Source: https://www.seatrade-maritime.com/containers/container-spot-rates-tumble-another-97-last-week

Export container volume declined 2.2% while the domestic volume increased 17.4%. The ports of Dalian, Tianjin, Qingdao and Ningbo-Zhoushan all posted a growth rate of over 10%.

Cargo throughput at major coastal hub ports also dropped 2.4%. The international trade cargo throughput declined 3.7% while domestic volume fell 1.23%.

Crude oil shipments at major coastal ports up 5.6% year-on-year. Among which the port of Qingdao and Yantai from Shandong province posted a growth rate of over 20%.

Metal ore shipments at major Chinese ports increased 6.8% while the port inventory grew 24.36%.

Cargo throughput at three major Yangtze River ports, Nanjing, Wuhan and Chongqing achieved positive growth in late August, slightly increased 2% and 4.9% year-on-year.

For the whole month of August, container volume at eight major coastal ports increased 3.3% while the cargo throughput of hub ports grew 0.7%.

Source: https://www.seatrade-maritime.com/ports/major-chinese-ports-box-volume-growth-slows-25-late-august

Supply chain visibility company FourKites said it saw a significant increase in the time containers spent at Felixstowe during and after the strike, which started on 21 August.

On the date the strike started, ocean shipments had been at the port for an average of 5.3 days for FourKite’s customers, and went on to peak at 9.9 days average come 30 August.

Arrivals at Felixstowe plummeted during the two-week strike, from 20% of UK arrivals to 0%, while Southampton arrivals ramped up from 13% to 24% over the same period.

Over Felixstowe’s recovery period since the strike, containers spent on average slightly more time in major European ports including Rotterdam, Bremerhaven, Hamburg and Antwerp.

The return to normal at Felixstowe comes just weeks ahead of another round of industrial action which will have a greater impact on UK supply chains. Workers at Liverpool are set to strike from 19 September to 3 October, overlapping with a strike at Felixstowe from 27 September to 5 October.

“FourKites has seen some possible initial signs of rerouting at Liverpool, where the share of port arrivals has decreased from 11% to 8% week-over-week for FourKites customers,” said the company.

Source: https://www.seatrade-maritime.com/ports/felixstowe-strike-congestion-clears-ahead-fresh-stoppages

Containership lessor Seaspan Corporation announced it has canceled an order for four containership newbuilds “due to certain conditions in the contracts not being fulfilled”.

The original order, which was announced in May, was for four 7,700 TEU dual-fuel liquefied natural gas (LNG) containerships from an undisclosed “major” shipyard.

“Due to certain conditions in the contracts not being fulfilled by the counterparty, the contracts have become null and void. Seaspan has notified the relevant parties and has reserved its rights to claim against the counterparty in relation to the contracts,” the company said on Thursday.

The newbuilds, which had been scheduled for delivery in the third and fourth quarters of 2024, were lined up to be chartered by a “leading global liner customer”.

Source: https://www.marinelink.com/news/seaspan-cancels-fourship-newbuild-order-499500

Newer Posts

Older Posts

Shippers push for contract renegotiations as spot rates tumble

Port of LA box volumes down 15%, Long Beach flat in August

NATO exercises with new maritime unmanned systems

Israeli start-ups pitch to Port of Barcelona

Saudi NMA a critical component of Kingdom’s maritime development

Specialised reefer vessels set for another spectacular season

Container spot rates tumble another 9.7% in last week

Major Chinese ports box volume growth slows to 2.5% in late August

Felixstowe strike congestion clears ahead of fresh stoppages

Seaspan Cancels Four-ship Newbuild Order

What is ESG? The Impact of ESG on shipping companies (MARITIME ESG)

Sustainability in Shipping Industry, ESG Performance Reporting (MARITIME ESG)

ESG in the Shipping sector (MARITIME ESG)

Quick Menu

Company DETAILS