Asia | US news digest. 31 May
Big bets and high risk double down the rate ahead of the game change
As port congestion in the ports worsens throughout China, last Friday, Yantian International Container Terminal (YICT) extended its export suspension until Monday, May 31, 2021, reducing container gate-in times from four to three days of a vessel’s ETA. Norman Global Logistics said on Friday there were 27 vessels waiting for a berth at Yantian. According to UK-based Metro Shipping data, transit times to the UK from Yantai and Shanghai jumped from 26 and 31 days respectively in 2018, to 36 and 42 days this year. Disruption in the terminal’s operations forced ocean carriers divert their routes to adjacent ports. Thus, last week, German operator Hapag-Lloyd decided to temporarily change a few sailings for the Far East Loop 2/3/4 from calling Yantian to Nansha Container Terminal.
While transpacific and transatlantic container rates remained relatively stable last week, European shippers and forwarders experienced more rate hikes on ex-Asia trades, with the FBX spot rate for Asia-North Europe climbing 9.1% to reach $9,871 per 40ft, while Asia-Mediterranean climbed 6.1%, to $10,214 per 40ft. Meanwhile, WCI reading of the Shanghai-Rotterdam leg stood at $10,174 per 40ft, - a 3% gain on last week.
An 11- day fire aboard the Singapore-flagged 2,700-teu feeder ship X-Press Pearl that caused some of its worst-ever marine pollution, was finally reported to have been “contained considerably” last Friday. Today Sri Lanka’s Marine Environment Protection Authority (MEPA) announced that they are planning to take legal action against the owners of the vessel, its crew, and insurers.
On Saturday a court hearing on the damages to be compensated by Ever Given20,388- teu vessel under arrest in Egypt was adjourned until June 20.
Trade war under the Trump administration pushed American companies to consider diversifying more production away from China. Tariff wars between the U.S. and China have caused driver shortages to increase the logjams, as well as have impacted supply chain disruptions during and after the pandemic. Meanwhile China’s focus on technologies of the future such as value-added manufacturing, robotics, and artificial intelligence is making a significant breakthrough. Thus, last Friday, shares of JD Logistics, the logistics arm of Chinese e-commerce giant JD.com, surged more than 18%, as the company debuted on the Hong Kong Stock Exchange, raising $3.2 billion in its initial public offering. The company plans to use the funds raised to invest in its logistics network and infrastructure.
With import shipping to North America indicating an all-time high, the ratio of loaded imports to exports at North America’s leading seaport, the Port of Los Angeles has reached 4:1 — the highest levels ever recorded. North America’s leading seaport, the Port of Los Angeles has seen a record breaking 47% increase in number of processed container units from February 2020 to February 2021, amounting to 799,315 twenty-foot equivalent units (TEUs).
On May 28, the Port of Savannah, Georgia served the largest vessel to ever call the US East Coast , - the 16,000TEU container ship CMA CGM Marco Polo is deployed on the AWE3/Columbus service connecting the US East Coast and Asia via the Suez Canal, with cross-Pacific links to the US West Coast. Georgia Port Authorities also have started construction to expand the port’s capacity to allow it simultaneously serve four 16,000TEU vessels, as well as three additional ships.
Carriers are determined to take advantage of the increased consumer demand with new strategic moves. In the wake of increased cargo volumes and FedEx is going to implement another set surcharges in June.
Chinese boxship operators brace up to make their fleets meet the increased demand for boxship services. Thus, striving to expand its self-owned fleet of container vessels, Chinese operator has placed an order at South Korean yard Dae Sun Shipbuilding for eight new 1,023 teu container vessels.
Yang Ming Marine Transport Corp. is set to enhance its competitiveness with on Far East - South America routes with significant fleet upgrades. Thus, the company has received of another new 11,000TEU container vessel, as part of an order of 14 same-size newbuildings.
In anticipation of enhanced competition operators of two container terminals in Busan New Port have secured volumes from the container shipping alliances for handling 6.4 million teu for at least next five years.
