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The Kazakh railway company KTZ and the new rising star on the BRI Shandong Port will work together in developing multimodal transport services and electronic services on the New Silk Road. In doing so, it will not only consider the traditional route through Russia but also the Middle corridor via the Black Sea Caspian Sea.

This was formalised in a recently signed memorandum of understanding. The two parties are willing to share regular transit routes on both the northern and the middle corridor. It is also looking at developing new services, such as a maritime link across the mentioned seas.

Shandong port

Shandong Port was formally established in 2019, integrating Qingdao Port, Rizhao Port, Yantai Port and Bohai Bay Port. The merger of the four ports has made the Shandong Provincial Port Group the largest port group in China, with the group’s cargo throughput exceeding 1.6 billion tons in 2022.

Ever since, it has been a successful hub for rail-sea transportation. It has successively opened a number of railway lines starting from Qingdao and Rizhao and passing through Alashankou and Korgos. At present, trains can reach Almaty within 10-15 days from the port, saving nearly 30 days compared with sea transportation.

Qingdao and the BRI

That there should be an increased focus on Qingdao has been agreed upon by several countries in the region. Qingdao should be used as a bridgehead to build an Asian rail-sea intermodal transport center, is the general consensus. In this way, it should also be a hub on the Belt and Road.

At present, the multimodal transportation center of Qingdao Port connects Japan and South Korea to the Asia-Pacific region in the east, the SCO countries in the west, ASEAN countries in the south, and Mongolia and Russia in the north. After signing the memorandum with KTZ, it will further strengthen the relationship with Central Asia.

Led by MSC and CMA CGM, ocean carriers are again scouring the charter and sales and purchase markets for tonnage to boost capacity and increase their market share.

With demand prospects improving, especially for the second half of the year, and freight indices showing weekly gains, some carriers are using the huge cash reserves accumulated over the past two years to bolster their networks and gain a commercial advantage over more conservative lines.

According to Maersk Broker’s weekly report, in the past two weeks the second-hand containership market has experienced “probably the highest level of activity seen in almost a year”.

“The main driver seems to be the race for market share for some of the biggest liners, with MSC still leading the charge with continued purchases,” it says.

“Where we, at the start of the year, only saw MSC and various Chinese companies as buyers, they have now been joined by a large group of other liner operators.”

MSC’s latest swoop on the S&P market, to add to its armada of more than 300 second-hand ships acquired since August 2020, is the 20-year-old 6,078 teu Lisbon, reportedly purchased for $22.5m.

Meanwhile, London shipbroker Braemar’s list of 13 representative containership charter fixtures finalised in the past week includes seven vessels taken on hire by French carrier CMA CGM.

“The buzz in the container chartering market continued,” says Braemar’s report today. It says only the dearth of supply of open tonnage is preventing more fixtures, “with the scarce supply side not providing many options for operators to cover their requirements”.

A broker contact told they had “a long line of charterers” requiring tonnage, adding: “They don’t seem to be put off by the age of the ship, or that they may have unexpired charters.”

Among the charters concluded by CMA CGM was the 2015-built, 2,339 teu geared Minerva, leased for 42 months for trading in the Caribbean at a daily hire rate of $15,000. It also managed to secure the 2,202 teu 2017-built Cape Quest for 11-13 months at $20,500 a day for delivery in North Asia.

US imports have bounced back in March (up 4.2% from March 2019), despite a significant drop in China cargo. The shifts in trade flow away from China may be driven by a combination of factors, including supply chain disruptions caused by the pandemic, rising labor costs in China, etc. There is also a rising demand for shipping services as SCFI has seen its largest weekly gain in 23 months, settling at $1,033. Higher rates may also be the result of the carriers’ capacity management as updates report successes following blank sailings and service cancelations. Some forecasts are even too good to be true, promising reassurance to shippers who have been grappling with rising rates and supply chain disruptions in recent months that the rebound is near. The Port of LA’s bumped imports serve in favor of such predictions However, from now on, it will not only be a matter of increased consumer confidence but labor agreements that need to ensure smooth operations. Charter rates are on the rise as well. 

The rising demand for shipping services drives new orderbooks of vessels which may pose a threat of overcapacity in the future. The trend is also likely to lead to increased competition among carriers, which could put downward pressure on rates.

Container depots in China are filling up due to a decline in exports, which has been attributed to a range of factors including the ongoing COVID-19 pandemic, supply chain constraints, and increasing competition from other manufacturing countries. Changes in vessel deployments and service offerings in the region are on the way. 

Hot topic

• Recent union actions at the ports of Los Angeles and Long Beach have been declared illegal by a federal agency in the United States. The National Labor Relations Board ruled that the International Longshore and Warehouse Union engaged in unfair labor practices by imposing work slowdowns and other disruptions during contract negotiations with port employers. 
• Brookfield Infrastructure Partners has agreed to acquire Triton International in a deal worth $4.7 billion creating the largest container leasing companies in the world. 
• The German government is reconsidering a proposed investment by COSCO in the Port of Hamburg, citing concerns about national security.

Routes, services & rates

• More use of small shallow-draught terminals will link ports in Asia and Europe with Ukraine through the Danube River. Maersk has become one of the first companies that started to look for alternative routes to accommodate clients from Ukraine. 
• A freshly restored rail crossing, Berezyne-Basarabeasca railway line,  between Ukraine and Moldova has seen the first launch of trains. 
• Forwarders are calling for changes to the Precision Scheduled Railroading system used by US railways, citing concerns over service disruptions and capacity issues. The PSR system, which prioritizes efficiency and cost reduction, has led to the consolidation of rail yards and the reduction of staff and equipment.
• Maersk has opened new service facilities in Mexico City in Mexico, with a dedicated satellite center in Santos, Brazil to provide repair, maintenance, and storage services for its container fleet. 
• ÖBB Rail Cargo Group starts a new service between Budapest, Hungary, Rijeka, Croatia, and Koper, Slovenia. 
• Irish Rail is developing a new rail freight terminal in Dublin as a part of a broader effort to promote rail freight as a more sustainable and efficient mode of transportation.
• MSC has added a direct call at Ennore, India on the westbound leg of its Australia Express Service (AEX). 
• TX Logistik has launched a new intermodal service linking its jointly operated Duisburg terminal in Germany with the Italian city of Padua.
• CMA CGM will call its vessels at the port of Gdansk instead of the port of Gdynia. 
• NWSA, a marine cargo operating partnership between the ports of Seattle and Tacoma in the US has launched a new incentive program to encourage shippers to use rail transportation for their cargo. The program offers discounted rates for cargo that is transported by rail and originates or terminates within the NWSA gateway.

Other

• Maersk has introduced a new methanol-powered feeder vessel, which will be used to transport cargo between ports in Northern Europe. The use of methanol as a fuel can significantly reduce carbon emissions compared to traditional marine fuels. 

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.

In the first quarter of 2023, the China-Laos Railway’s import and export freight volumes increased by 274,4 per cent year-on-year. According to customs data from the Chinese city of Kunming, goods transported along the route in the first four months of 2023 amount to 1,033 million tons.

Increased volumes also correspond to more trains. Data from Laotian authorities show that 954 freight trains transited on the Laos section of the China-Laos Railway, a year-on-year increase of 112,47 per cent. According to CCTV News, there are more than 2,000 different types of goods transiting along the corridor.

From China to Laos, it’s primarily mechanical equipment, household appliances, vegetables, flowers, and machinery parts, while the goods transported from Laos to China are mainly metal ore, cassava, and barley. It has only been 16 months since the opening of the China-Laos Railway in December 2021, and the corridor is constantly growing.

Laos connects to Vietnam

On 1 March, Vietnamese infrastructure investor DEOCA Group signed a joint venture agreement with Laos oil trading company PTL to research the construction of the Vietnam-Laos railway. According to the agreement, the railway will link the Laotian capital Vientiane with the Vietnamese port of Vinh An. The total length of the railway will be 554,7 kilometres, with a standard gauge and an operational speed of up to 150 km/h. The total investment will reach 4,38 billion Chinese Yuan (roughly 582 million euros).

Most importantly, the planned new railway line will connect to the China-Laos Railway and reap the maritime advantages of Vinh An, where goods will arrive by rail and then be shipped directly to markets such as Thailand, China, South Korea and Japan through a changeover. Although the agreement is still at the feasibility stage, it gives a new blueprint for the future of rail-sea transport between China and Laos.

https://youtu.be/zjYJMdcY47o

These are just a few examples of new requests of clients from across the world. To get more fresh inquiries and\or best quotes click here or push the «request management» button in the left menu. 

https://youtu.be/AqHLsnsvjmg

https://youtu.be/4ubu7VhFhRo

Too early for the sunrise?

There is a lingering hope for improvement in the spot rates dynamic as Drewry's Composite World Container Index was doing better in the past month in comparison with March 2018 and March 2019. Although it showed 9.6% deep, the overall rate remained strong which contradicts the scenario that everyone expected (the continuous downfall of rates in the first quarter of 2023). Following this improvement, the containership charter market is experiencing a surge. Many professionals expect an improved peak season compared to last year.

However, there are still risks of disruption and it is too early to ride a wave of this trend. Therefore, when such companies as CMA CGM aggressively keep splurging on secondhand vessels to capitalize on high demand and increasing rates, it becomes concerning whether such moves would lead to overcapacity in the future. 

Routes & services 

• Ruscon, a Russian intermodal transport company, has partnered with Mountain Air Shipping, a Dubai-based container shipping company, to start a weekly container service between Saint Petersburg and Ambarli. 
• Container carriers are expressing frustration and disappointment over the recent decision of terminal operators at India's Jawaharlal Nehru Port Trust to increase tariffs. The move is expected to result in higher costs for carriers, which could ultimately be passed on to shippers. Carrier groups have called for greater transparency in the tariff-setting process and are urging the Indian government to intervene in order to prevent further cost increases.
• Uzbekistan and Georgia are increasing their trade cooperation, focusing on the Baku-Tbilisi-Kars (BTK) railway line as a gateway to the Georgian Black Sea ports.
• PSA Italy is set to launch a new rail service between the Italian port of Genoa and Kornwestheim hub in Stuttgart in May 2023.
• Vietnam is investing in a new railway line that will connect with the China-Laos railway running from Lao Cai in northern Vietnam to Hanoi, with plans to eventually extend it to Haiphong Port. 
• A new neutral shunting service has been launched in the Antwerp North rail terminal, aimed at creating a level playing field for all rail freight operators by reducing congestion and wait times.
• The Alataw Pass, a key rail border crossing between China and Kazakhstan, has seen a 10.35%  increase in the number of China-Europe freight trains passing through it in the first quarter of 2023. The pass has undergone significant upgrades and improvements in recent years to increase its capacity and efficiency.

Other 

• The migration of cargo from West Coast ports to East Coast ports in the United States is set to become a logical trend that will continue in the coming years. The shift is being driven by a number of factors, including growing demand for e-commerce and the expansion of the Panama Canal, which has made it easier for larger ships to transit. While the West Coast ports will remain important, the East Coast ports are expected to see continued growth as shippers seek more direct and efficient routes to major population centers in the eastern US.
• Cosco has reported a 35% drop in sales and leasing revenue for 2022 due to fluctuating market conditions in the container industry. Yet, the company remains optimistic and explores opportunities in other areas of the logistics sector, including port development and supply chain management.
• Several terminals at the Ports of Los Angeles and Long Beach were forced to shut down due to a lack of available dockworkers due to the labor dispute between the International Longshore and Warehouse Union and the Pacific Maritime Association. The shutdowns caused significant disruptions to cargo operations at the ports.
• Maersk has achieved the highest schedule reliability among the major carriers in February 2023.

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.