Asia | US news digest. 7 Aug
The first rule about improper surcharges is you do not talk about improper surcharges or at least, reject the accusations. Soaring prices, rates, and anti-monopolistic drama.
The peak season is driving ocean freight spot rates beyond the US $20,000 per FEU. The new data demonstrates that prices from Asia to the US West Coast, including premium surcharges, increased by 5% to more than $19,000/FEU, with East Coast rates hitting an outstanding $20,804/FEU. Australia is also in the club of struggling shippers – it is facing the highest increase in rates since the beginning of the pandemic. The latest update on China-Australia FAK rates has shown that they have been pushed up to US $8,500 per 40ft container. Alongside the skyrocketing indicators, there are congestion and consequent capacity shortages.
Moreover, prices of dry freight shipping containers have also doubled over the past year to reach historic highs. Experts have tracked that the dry box newbuild prices rallied strongly in 2020 with a year-on-year gain of 75%. Then by Q2 this year 40ft containers breached the $6,500 threshold, more than doubling over the year since the last peak that occurred in 1998.
China is still turbulent which affects major shipping lines and forces them to skip sailings to meet their schedules. In addition to the recent Typhoon In-fa that hit Shanghai port, the country has to impose new sanitary measures in the wake of the new COVID cases. Vietnam mirrors the situation – container terminals at Tan Cang Cat Lai Port in Ho Chi Minh City have suspended container imports to clear the backlog that has been caused by the pandemic outbreak. Hapag-Lloyd is planning to launch a transshipment service, transporting goods from Vung Tau to Cat Lai. Companies sourcing in Vietnam are also destined to experience significant delays that could lead to additional cancelations. They are now forced to reconsider their strategies and start sourcing from different areas around the globe.
Taiwanese feeder boxship operator TS Lines expands its assets, as it has added to its newbuilding orderbook. The new order at Fujian Mawei Shipbuilding includes the construction of six 1,100 TEU containerships.
The situation in Asia has a domino effect on the US Ports. The Port of Long Beach continues to see through-the-roof volumes of cargo, handling a record number of containers for the month – 784,845 TEU in July. Terminals will be in a full-court press to meet the demand for the holidays. The new port forecasts predict that it will break its 2020 TEU levels of 8.11 million TEU. The same port also has to deal with unbearable heat and as a result, it will take a pause on shore power facilitiesfor vessels to free up energy supply.
The Federal Maritime Commission is undertaking further steps regarding the expedited inquiry into the timing and legal sufficiency of ocean carrier practices. It concerns certain surcharges as part of its investigation into the US maritime sector. The step is necessary, as recently the FMC has been receiving communications from multiple parties reporting that ocean carriers are improperly implementing surcharges. As for a $600,000 lawsuit by MCS Industries against Cosco and MSC Mediterranean Shipping Company, MSC has finally reacted. It rejects the accusation of collusion between carriers put forward in the complaint.
Although, Asia is dealing with major challenges, not everything is in gloomy tones. Recently, Hong Kong liner OOCL has reached a milestone by launching a new rail-sea service connecting China to the US east coast. In fact, it is a combination of the Chang An China-Europe block train service from Xian to Kaliningrad with the onward feeder to Bremerhaven, and then with OOCL ocean services from Bremerhaven to various ports on the US east coast.
The uneven recovery of the air market is raising concerns about its capacity. Lately, a significant number of preighters have returned to passenger mode to meet the demand. Capacity is still down significantly: the Far East-Europe and Europe Far East trade lanes show reductions of 21% and 20% whereas, the deficit is -36% from Europe to North America and -34% in the opposite direction.
To develop its air cargo services, the Port Authority of New York and New Jersey has announced a lease with Amazon Global Air to re-develop and expand air cargo facilities at Newark Liberty International Airport. Why Amazon? The booming e-commerce is the answer. The new facilities will upgrade utilization for e-commerce package sortation and incremental cargo activity.
In Canada, union workers at the Canada Border Services Agency began labor actions amid contract negotiations, which may result in delays in commercial traffic at local ports. Maersk is already expecting a slowdown or withdrawal of non-essential services.
Korean companies will get assistance from the Busan Port Authority to obtain Authorised Economic Operator certificates as part of efforts to strengthen the global competitiveness of small and medium enterprises. Moreover, these measures include legal compliance, safety management level, and financial health.
