US and China have been tied with international trade connections for years, and now the US imports from China are falling faster than the ones from any other country. They have already dropped by 5.5%. The decrease also concerns exports and bookings. Experts admit that looking for alternative sources for the US importers is an unavoidable strategy in the coming weeks. 

Looking for alternatives is a go-to move for other industry players in light of the falling freight rates too. Increasing blank sailings is not the only strategy to tackle this situation. Such companies as Zim are planning to focus on profitable niche markets for container services and expanding their car-carrier business. Softening demand and sliding rates will most probably become the “new normal”, so there is not much room for maneuvering. 

The bigger number of blanked sailings from Asia has put Northen European feeders under pressure. It is reported that even when the ships come, the volumes are low. When it comes to charter rates, they have fallen to around $14,000 from $60,000 (in April) for a handy 1,600 teu ship. Daily hire rates have been inflated by the two-year contracts that got introduced during the tonnage crunch in the past 18 months, This is a big change from the regular 6 moths contracts with possible extensions. 

Large orders of the new vessels will soon backfire for the market players, experts predict. Now with low volumes, there is a risk of overcapacity becoming the next trend for the coming year. Large boxships are likely to be cascaded onto trades that call for smaller ones, adding to overcapacity dynamics. 

LTL carriers are preparing for a challenging road ahead as well. FedEx Freight has started laying its staff off despite the peak season. 

There is a lot of uncertainty about the year 2023. If in the post-COVID era, companies believed in the rebound, now with the dropped demand and its effect on supply chains and operations, they are not so hopeful. Retailers across Europe raise inventories to have stock available and contract negotiations remain unpredictable. 

Routes & services

• Russia aims to increase capacity on the way to India, on the International North-South Transport Corridor. The corridor's development was slow, so now the parties want to catch up on the potential by developing new routes. The full potential of the corridor is estimated at 14 million tonnes. 
• In a potential response to Russia's plan, the EU is getting interested in Central Asia. EBRD embarked on a study to look for the best connections between Central Asian countries and the European TEN-T network as an alternative to the northern rail route via Russia. 
• The Nizhneleninskoye-Tongjiang railway bridge between Russia and China is now open making the traditional route 700 km shorter. 
• The extension of the normal gauge railway track between China and Vietnam is in the talks as a project that may actually take place. The countries have agreed to speed up this process. 
• On 28 November, Hupac will launch a new direct container service between Italy and China connecting Milan with Suzhou. 

Other

• OJ Commerce has reported Maersk to FMC. The complaint concerns alleged price gouging and collusion and contract breaches committed by Maersk. The debate regarding Maersk’s dominance in the industry is getting more and more intense. 
• Two freight trains collided near Giifhorn in Germany causing the closure of the Berlin-Hanover railway line for the weekend. 
• Representatives of french rail freight have asked for more investment from the government to make rail transport more competitive following the increase in the modal share of rail freight from 9.6 to 10.7% between 2020 and 2021. The association asks the government to help navigate through high energy prices, improve rail infrastructure, and bring back state aid to the rail industry. 
• During the European Silk Road Summit, it has been stated that over 2022 the number of trains has been halved on the Silk Road. The role of Duisport has increased thanks to its favorable location. Although COSCO divested from it, Duisport’s representative claimed that it would not affect the relationship between them. 

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.

The commissioning of a new semi-automated and remote-controlled crane for CFL multimodal’s terminal in Bettembourg-Dudelange in September 2022 is about to significantly increase the site’s handling capacity while providing more quality and safety in operations through innovative technologies. For Kuenz, the mastermind behind the new crane and CFL multimodal’s long-standing partner, the new crane is not only about security and trust but also about responsibility towards society and the environment.

Ocean carriers are said to be in “panic mode” as bookings from China to North Europe and the US west coast tank, causing FAK rates to plunge to new depths.

Despite aggressive blanking that has reduced weekly capacity on the tradelanes by more than a third, the lines have failed to slow the precipitous fall in short-term rates and, are arguably fuelling the fire by offering sub-economic spot rates via their digital platforms.

For example, rates from Shanghai, Tianjin and Shenzhen to the Le Havre-Hamburg range of container hubs in North Europe, of $1,000 per 20ft and $1,800 per 40ft are now widely available for prompt shipment.

And some carriers are said to be prepared to reduce rates further for volume, and relax or even waive demurrage and detention conditions.

The speed of the rate erosion on the Asia-North Europe tradelane is making a mockery of the spot market indices, which have been unable to keep pace; for instance, the lowest reading this week is Drewry’s WCI, which recorded a 14% decline, to $2,687 per 40ft, for its North Europe component.

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Reacting to the drastic drop in demand, carriers have been adding more and more blank sailings, especially for imports to North America and Europe, but not that much for Asia-Europe. At first glance, it may seem that this strategy has triggered a rates rebound (for example, Asia-US west coast rates increased 11% week on week, to $2,763 per 40ft and Asia-US east coast prices went up 2% week on week, to $5,767 per 40ft.) However, on a global scale, the situation remains complex - WCI hit its lowest $2,773 over the past 24 months.

Guangzhou may face a lockdown due to the spike in COVID cases. Overall, Chinese ports have been affected greatly with Ningbo-Zhoushan taking the largest hit, where volumes fell 29% compared to the start of October.

The US imports are stabilizing mainly thanks to a much smaller month-on-month drop at California ports. Since the shift to the East ports occurred, the delays have also shortened. The average delays at the top five West Coast ports fell 40% from January through October.

India’s exports bounce back to the pre-COVID normality. Containers are available, there is no shortage of inventory in the majority of the ports, and the waiting time is not that long. With India becoming attractive for foreign investments, the government has decided to promote local exporters by allowing international trade settlements in rupees.

Strikes

• The basic agreement has been achieved in Liverpool. PPG fully accepted the deal to increase basic pay by 9%in a vote on 10 November. The workflow is expected to restore. 
• Strikes in Spain resulted in the cancellation of 200 trains. This will impact a host of large and medium-sized enterprises, as well as the supply chain in general. 
• The strike in the Port of Antwerp lasted from November 9 to November 10. 

Routes and services 

• There is no precise date when, but Maersk intends to launch Bangladesh-India inland services following the series of successful trials of using Bangladesh ports as a transit point to and from East India. 
• Maersk will introduce a fuel surcharge for rail, combined, and intermodal transport services in Belgium, the Netherlands, Luxemburg, Germany, Austria, Switzerland, Liechtenstein, and Poland because of the energy crisis. The increase is expected to be up to 20% over the standard inland transport tariff.
• A train journey from Xi’an in China to Duisburg in Germany has set a new record - the distance was completed in 10 days. According to officials, this service is prioritized over other Eurasian services. 
• SAFEEN Feeders has started its UAE-Red Sea service including Fujairah Terminals and Jeddah. The Red Sea service will connect directly Khalifa Port and Port Suda. 

Other 

• Another claim accusing Maersk and MSC of exploiting their dominance has been made this time by the Brazilian Association of Port Terminals. The Association claims that the industry giants directed cargo to the seven port terminals they own while those terminals handle almost half of Brazil’s containerized cargo.
• A new milestone on the Silk Road: the 6 000 train trip went through the border point of the Khorgos dry port in Kazakhastan. 
• Ports in Florida are slowly reopening after Hurricane Nicole hit the region. Port of Everglades, Port Tampa Bay, Port of Palm Beach, Port Miami, JAXPORT have resumed their work. 

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.