MD logistic, a Riga, based logistics company with partners globally covering all continents and countries. We provide an unyielding commitment to best-in-class customized logistics services including Air Freight, Sea Freight, Land Freight to EU, Russia, and CIS countries, Door to Door Delivery Services, Customs Clearance, Bonded Warehouse Services, Storage Services and a multitude of other customized Value Added Services.
MD logistic ltd.
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The first month of fall brings not only cooling of temperature but frozen rates and “chilly” imports worldwide.
They kept asking and the pleas have been heard. The never-ending rise in spot rates seems to have finally started to slow down. Although none of the current challenges has been resolved, and market-driven rates are expected to grow, CMA CGM has decided to put further increases on hold until February and focus on the improvement of its services and expanding a much-needed capacity. A relief for the forwarders? It is still unluckily as rates will remain sky-high, squeezing the last bids out of the players, while CMA CGM drapes itself in the hero gown and strives for new developments at the same time by signing a concession agreement for a new terminal at the Khalifa Port with AD Ports Group. In addition, shipping lines keep rejecting allegations of unfair competition. Some have recently claimed that they are operating within the conditions dictated by the market. Shippers and forwarders do not buy these tales especially since the situation remains worrying – if things do not change, many smaller shippers could be bankrupt before Christmas and moreover, if the shipping lines tighten their grip on the container supply chain, many independent forwarders can simply disappear. However, the possible adjustments might be coming from Asia to North Europe direction where after Chinese holidays demand has started to drop. As the result, some of the companies have already reduced the October Shanghai to Felixstowe rate offer to $15,000 per 40ft, which is some $2,000 to $3,000 below current prices. At the same time, it is a good moment for China to take a break and switch its focus on more local advances – it is now back at pushing autonomous vessels. Its first one will start service this October.
This fall also brings a trend of decreasing imports in the US while the pandemic-related disruptions continue all over the world. Despite the fact that experts predict August to be busy and numbers of the TEU handled to be still high, they will fall short of the 2.37 million TEU forecast for August a month ago. September is forecast at 2.21 million TEU, which would be up 5.1% year-over-year. Further cargo delays are anticipated as there are dozens of ships waiting at anchor to unload at the Ports of Los Angeles and Long Beach. The congestion chaos puts the industry at the risk of a collapse in the coming months that are going to be the most crucial for the industry because of the approaching Christmas. Everyone braces up against the challenge. Even the big retailers such as Amazon, Ikea, Walmart, Cargill and Louis Dreyfus have a say at the round table with the FMC on policies relating to the competitiveness, reliability, integrity, and fairness of the system in the current context of the crisis.
Joint efforts are great but it is not what DB Cargo can show off. In addition to the heavily its loss-making rail freight division, the company is on the setback due to the damaged reputation after the union strikes. What also does not help is the fall in the market share of rail freight on the German transport market from 19% to 17.5%. As a part of a rescue plan, the company is pushing forward the alternative transport but shippers will now think twice before entrusting their cargo to a company whose employees are at war with management. However, when one empire falls, there is always another candidate that could potentially replace it. For instance, Kombiverkehr is offering a new intermodal route between Germany and Austria. It is not only environmentally friendly but also creates access to new facilities for Austrian shipments.
Airfreight is on the defense of agility in the wake of mounting customer demand as the logistics giant DSV is expanding its long-term own-controlled freighter capacity thanks to its service for customers who need consistent and scheduled uplift in a turbulent market. Finally, Shanghai’s Pudong airport is slowly coming back on-line after a Covid lockdown and the company expects things to get better, however, it is still too early to predict any major improvements.
What does the future hold? The puissance of the shipping lines in the wake of the skyrocketed boxship charter rates or, if we speak about rail, the sunset of the New Silk Road?
Fame and glory have been the inseparable characteristics of the New Silk Road while the rates were soaring and more customers were favoring this route as more ports were experiencing congestion, but what will be the future of it?Without a doubt, the New Silk Road will not be forgotten but to what extent its use will drop when things eventually get back to normal? Experts distinguish two possible scenarios: the first one is when China keeps investing in rail with the same rates and the same demand for freight, so rail remains more affordable in comparison to ocean freight. The second variant is when the China-EU direction is more stable and the New Silk road is used for the transportation of goods that are truly suitable for it.
Not only has the future of rail perplexed the minds of industry experts these days. The question of lines’ competition is no longer the topic of local governments but everyone’s concern. It is going to be a long way until there is consensus on the future regulations because so far the industry players are mostly concentrated on how to stay afloat in the wake of bottlenecks in the ocean-linked supply chain and the causes of service disruptions; actions undertaken so far by relevant jurisdictions and authorities in response and their results. Let’s be honest, the far-reaching strategies on increasing resilience and smooth operations in the sector are important but it is the highest sector of the industry’s needs pyramid which is difficult to achieve when on the basic level there are still unresolved congestion and shortages. Besides, navigating the competition issues can be more difficult in the future, because new members are entering the tradelane and shipping lines continue the trend of enormous growth in times of the COVID, gaining more influence. Take COSCO – it can soon overtake CMA CGM as the third-biggest container line if the latter does not acquire more ships. Are the lines going to reign or there still be room for regulations? It makes sense for the players to ask themselves this question especially since container lines are bypassing barge operators to operate their own inland routes to service their demand for empties. The recent shake-up of the European waterways was driven by the notoriously famous capacity shortage.
Apart from keeping an eye on the competition like a hawk, the FMC is advocating for broadening the scope of the current audit program to include any discrimination against dangerous goods due to the recent acquisitions of the US carriers in refusing hazardous goods. This is due to the surging imports that are stretching the carriers’ abilities. The consequences may be devastating as the inability to bring these commodities can harm local factories and put the ports under more pressure. The latter has been struggling the most: the data has shown that traffic has doubledglobally in 2021. Moreover, the recent hurricane has added more difficulties to the US ports where at least the Port of New Orleans has resumed its operations.
All the mentioned factors are causing significant shifts across the industry and charter market, where boxship charter rates have recently hit unprecedented $200,000 a day, is no exception. We have already witnessed the big players starting to charter their own vessels, and now the smaller ones are following suit. No wonder since the transpacific market is heavily congested and Asia to Europe direction is less clogged.
What does not kill you makes you stronger they say, and Evergreen services a great example. Having dusted off the past, it is striving for the expansion of its asset by ordering the construction of 24 feeder containerships in a deal worth up to $1.1bn. It is an extraordinary number that shows that the carrier has more trump cards up its sleeve.
Where the health crisis has not interfered, Brexit has. The talks about how difficult it would be to adjust to the new trade agreements have been on for what it seems like forever. It is just now the issue faces the lack of knowledgeable and skilled employees that would be able to work in the new environment. Paired with the drivers’ shortage it brings the UK into a challenging state. If in the beginning, companies were exploiting drivers from Eastern Europe, now when the problem of severe underpayment has been exposed, they can no longer get away with it and ignore the current state of things.
European rail disrupted by the floods and recent strikes welcomes a new departure Rotterdam and Milan. Taking into account that due to the strike in Germany and floods not long ago severely affected traffic in the Netherlands, the new train is a great initiative. Hannibal European Gaterail, the company behind the launch, expects more services in the coming years. Germany has also seen a new development by MSC – a new direct rail service connecting Trieste, Italy, and German Ludwigshafen.
судя по знаку судоходной ко на трубе, это - индонезийская Samudera ( штаб кв-ра в Сингапуре). Предположительно из СП-флотилии с СКФ
Hurricane Ida has stormed into the US as an uncontrollable whirl bringing all the facilities in the south to chaos. More rate increases are on the way, so it is time to not only get an umbrella, but also tighten the belts.
While it is still uncertain, whether hurricanes are indeed named after female names to awake more fear or not, it is certain the effects brought by hurricane Ida last week will be devastating for the US supply chains. The southern states are still under emergency alert trying to recover from floods and widespread infrastructural damage. Several ports, including New Orleans, have some of their operations shut down which will bring more delays.. Railway terminals have faced the same misfortunate destiny, and guess who will feel the financial aftermath the most? Customers. Experts have already warned that apart from getting their supplies late, consumers will experience increased costs. On the brighter side, the Port of New Orleans has awarded a $4 million contract to HDR Engineering for the new Louisiana International Terminal container facility that might be a live-or-die kind of move in the light of severe weather conditions
Will Groundhog Day ever end or is this contrapasso going to be eternal? Luckily, we are not in Dante’s Inferno, and the congestion is not here to stay – it is just the relief might come no sooner than 2022. Several factors contribute to a postponed date: good ol’ capacity shortages, spike in imports generated by the peak season, and the fact that Chinese factories remained opened during the holiday week, which has reduced the number of blank sailings this year, aiding the congestion.
Ocean carriers are already familiar with this crisis starter pack, hence they are growing more confident in their abilities to keep benefiting from the current situation by extending vessel charters with containership owners for longer periods at much higher daily hire rates. However, there is still a seed of doubt that they are not as powerful as they wish to be. Despite that they seem to have all the trump cards, carriers sense a “line in the sand” that some charterers were now not prepared to cross, in terms of charter lengths. Of course, when your ships are bottled at the blocked ports, how willing are you to pay for such conditions? Hardly. As a result, carriers are beginning to question the wisdom of adding extra loaders to trades where there are already heavily congested terminals. Anyway, for now, the charter market is still the hottest – 1,700 TEU ships are now able to command $51,000 a day for six -to 12-month contracts.
It all most seems like the increasing rates are equivalent to fever: going further up with no paracetamol in the first aid kit. It is a vicious circle of constraints driving them up and vise versa. Among the recent updates, CMA CGM has published a series of freight rate increases for shipments in Europe, the Mediterranean and Africa, which will be applicable from September and October. In the second part of this month, it will also implement another FAK rate increase from Pakistan to all North European, Mediterranean and North African base ports. The difference between old and new rates varies from $1000 to $1500.
Perhaps, the pressure might ease up on rail this week? It is controversial – on the one hand, labor unions in South Korea have reached an agreement with HMM about wage negotiations, since the company could not afford another possible disruption. Meanwhile, on the other hand, the strike in Germany is not over yet. Although Deutsche Bahn tried to object to a continuation of strikes through court, it has failed. Has Germany become a black ship all of a sudden? Despite the turbulence on the rail, its intermodal facilities are up and running. The new advancement concerns MSC’s new service connecting Turkey with the German town Ludwigshafen since the country is a great forepost for the rapid, high quality door-to-door services. No wonder, since the situation in ports is still gloomy, intermodal holds one of the biggest potentials and Asian direction is no exception – China speeds up and establishes a new trade route via Myanmarfollowing the successful arrival of goods at Chengdu International Railway Port.
Asia pushes through container transportation as well with Vietnam boosting its throughput in its container sector despite anti-COVID measures. Short-term relief is awaiting India as well thanks to the government’s upcoming measures. In Europe, container transportation is also going towards the light because of Bureau Veritas that has developed in-depth technical guidance to provide safe and practical pathways for operators carrying containerized cargo in bulk carriers.
Another horseman of the crisis, the post-Brexit framework of the EU – the UK relations is not contributing to the solution of the drivers’ shortages. There is now a risk of the food simply not being delivered due to the new regulations. One of the proposed ways out is a form of a digitally enabled Facilitated Movement Scheme that meets all of the EU standards. As for the new workforce, there have been suggestions to reduce working age and attract more women into the sector.
Although the EU has rather recovered from the July floods, there are still consequences of it – the logistics industry is very sensitive, so the new surcharges announced by Hapag-Lloyd can become a permanent fixture on Europe’s inland waterways. There has to be some communication, otherwise, rates wi
