Asia | US news digest. 10 July
Is the shipping monopoly close to an end? It might not be that easy.
Although consumer spending is the first factor to recover, the strained supply chains of the US continue experiencing low inventory levels consequently driving exceptionally strong freight imports. Experts state that even if the current record rates of retail spending ease in the coming months, the existing pattern will likely maintain the pressure on the capacity of the container shipping market. With the rates being guided by the unprecedented crisis in the industry, bars are elevated artificially, and the US government is planning to end these manipulations. FMC is calling on the Justice Department to investigate and fine ocean carriers charging shippers unreasonable rates and fees. The decision was not welcomed by some claiming that the matter was about weak pre-pandemic demand not incentivizing building new ships and had nothing to do with industry consolidation. The measures undertaken in the future will be focused on increasing competition in liner shipping.
While the Stares are only planning to address the issue of marine monopoly, South Korea is deeply into it. However, Korea Shipping Association has joined the Korea Shipowners' Association in protesting the hefty fines the KFTC imposed on 12 local liner operators for fixing rates. The decision is supported by the statement that the fine fines will cause a heavy financial burden that could cause a second Hanjin Shipping crisis that the country had experienced in 2016.
The lack of available tonnage has led to a slowdown of chartering activity. Fewer charterable ships mean carriers must buy vessels secondhand to increase near-term exposure to freight rates, and experts believe the shortage can be here to stay. Non-operating owners have been placing their vessels on multiyear charters, which means that there is a significant portion of the NOO fleet that will not be available in the charter market for years. In addition, in the light of the current context, more ships trade hands – values of ship assets have continued to rise across the board.
A major disruptor, wildfire in western Canada, is causing continuous delays through the supply chain to the Port of Vancouver. The rail challenges, where the railways provide on-dock service, also come at an inopportune time for the Port of Vancouver as it contends with a surge of container traffic.
Meanwhile, some of North America’s ports indulge in a major expansion. In particular, at Port Houston and the Houston Ship Channel. Two of the projects, totaling $99 million, are for the port’s expansions at its Bayport Container and Barbours Cut terminals. Quebec’s plans for a $624m container terminal at Quebec City have run aground due to the environmental review. The federal government has blocked the project pushing to look for alternatives. The ports and carriers that are part of the South Atlantic Chassis Pool are teaming up to increase and upgrade the pool by adding up to 50,000 new high-tech intermodal chassis over the next 18 months. With companies going on a buying spree of newbuildings, Yang Ming is planning to follow suit and make orders of new container ships so far awaiting deliveries of nine 11,000TEU ships. For the time being, the Port of New York and New Jersey have another increase for total container volume in May, while rail volume broke its all-time monthly record. The total volume was 796,693TEU, which translates to a 48.2% increase. It is followed by the increase in imports and export empties.
There is a new player in the development of the New Silk Road – Helsinki. Its position is a great location that can help it to become the next Eurasian gateway to Europe. It is already fulfilling the role of a hub having launched connections to Suzhou, Jinan, and Jiaozhou in addition to existing services.
To address the problems that the shippers are facing in shipments of outbound containers from Chittagong, the government of Bangladesh has formed a taskforce. It has requested to arrange a common carrier agreement that may help to lower the export backlog of 14,000TEU of laden containers, which are lying at the ICDs.
The Port of Long Beach reports a 20.3% increase in moved TEUs in June 2021 that was driven mainly by imports and empty containers at the port. Empty containers moved through the port jumped 36% to 250,249 TEU. The authorities are anticipating e-commerce to drive much of the cargo movement through the rest of 2021 as retailers plan for a busy summer season. Beibu Gulf Port in Guangxi Zhuang Region also saw its TEU throughput increase by 22.29% year-on-year in H1 2021. The company has attributed the growth to the accelerated construction of the New International Land-Sea Trade Corridor.
