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.
China dispatched the first train carrying humanitarian aid products for Turkey on 29 March. This train carried fifty 40-foot containers; however, according to KTZ Express, 150 more containers remain to be dispatched to Turkey from China. For this purpose, the Kazakh company prioritises the relief trains operating them as shuttle trains.
The shuttle train operation results in less time spent crossing the territory of Kazakhstan. KTZ Express underlined that crossing the country takes only 90 hours currently, with an optimised departure schedule from the Altynkol station. Specifically, trains depart three times a week, while the service tariffs are also fixed.
Three times faster
The humanitarian cargo consists mainly of tents that will temporarily accommodate people affected by the devastating and deadly earthquake that hit Turkey and Syria in February. The route relief trains follow starts from China, crossing through Kazakhstan, the Caspian Sea, Azerbaijan, and Georgia and from there to Mersin in Turkey.
KTZ Express claims that the special shuttle train conditions in Kazakhstan, combined with measures taken from the Chinese side, transit times will reduce by three times. Chinese sources have commented that the best possible transit time for these services is 30 days, in contrast to the average of 40-50 days spent to complete services via the same route.
American trucking company Borigi LLC has posted freight rates on MaxMmodal multimodal network. Shippers and forwarders are welcome to have a look, negotiate, and book their rates
Shipping lines monopoly may be a tough nut to crack.
A US House panel is considering a bill that would remove the antitrust immunity currently enjoyed by ocean carriers under the Shipping Act of 1984 as a response to concerns over the consolidation of the container shipping industry and the impact on competition, freight rates, and service quality. To increase competition, FMC proposed to prevent ocean carriers from jointly operating vessel sharing agreements (VSAs). The shipping companies expressed their protests immediately claiming that if it happens, this move would lead to higher costs and reduced service levels for shippers. They believe that VSAs provide greater flexibility and enable them to offer more frequent services to customers at a lower cost.
As contract negotiations between shippers and shipping lines stall, more shippers are being forced to turn to spot rates to secure transport capacity, resulting in higher costs and reduced predictability. The situation is being attributed to the ongoing disruption to global supply chains. Reportedly, shippers are taking longer to commit to contracts amid falling rates. Nevertheless, Maersk reports the contrary, that the situation with the supply chain begins to show signs of improvement thanks to increased port productivity, greater reliability in container shipping, and the return of more regular vessel schedules. Despite the fragile state of things, companies are working to adapt to the new normal, including by diversifying their supply chains, increasing transparency and collaboration, and investing in technology and automation to improve efficiency and resilience.
Routes & services
- CMA CGM has added the Indian Subcontinent to its list of destinations that will be subject to a congestion surcharge from Mersin, Turkey. The surcharge of 100$ per dry container is aimed at offsetting the increased costs caused by congestion and delays at the port of Mersin.
- From April 10, CMA CGM will add a 100$ surcharge to 20' dry boxes with a container gross weight equal to or over 16 tons from the port of Jeddah in Saudi Arabia to North Africa and Morocco.
- Metrans is expanding its terminal network along the Hungary-Serbia corridor by acquiring 51% stake in railway company Adria Rail and building two new terminals in southern Hungary.
- PIL is expanding its intermodal transport services in China by integrating a new barge service between the ports of Shanghai and Nanjing. The move is part of PIL's efforts to increase the efficiency and sustainability of its supply chain operations in the region.
Other
- Alibaba Group has announced plans to restructure its business into six separate entities in a move aimed at increasing transparency and compliance. The restructuring comes as founder Jack Ma returns to China after an extended absence, amid heightened regulatory scrutiny of the country's technology sector.
- CMA CGM, COSCO, and Hapag-Lloyd - are reportedly planning to place orders for new containerships as demand continues to outstrip supply. The move is seen as a bid to secure future capacity and maintain their market position in the face of ongoing disruption to global supply chains. With this strategy, CMA CGM has started to dominate the container sale and purchase scene.
- The US Environmental Protection Agency has reached an agreement with the state of California to phase out the use of diesel-powered trucks and buses in the state by 2045.
- US lawmakers have reintroduced the Truck Parking Safety Improvement Act, which aims to provide funding for the development of new truck parking facilities and address the shortage of safe and secure parking options for truck drivers. The move is seen as a bid to improve the safety and well-being of truckers and reduce the incidence of accidents and cargo theft.
- The German government has announced plans to double the country's truck tolls from 2024 and invest billions in railway infrastructure as part of efforts to reduce emissions and improve transport sustainability.
- Poseidon Containers, a shipping container lessor, has completed its $1.1 billion acquisition of Atlas Corp's boxship fleet. It is a major step in Poseidon's ongoing expansion strategy.
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.
