EU | UK news digest. 12 June
Rates break through the roof. Does it mean that the sky is no longer a limit?
The need for governmental support for the green initiatives in the light of pandemic recovery has been confirmed by the European member states. Collectively, they will allocate at least 85 billion euros to sustainably transport as part of the National Recovery and Resilience Plans. The spectrum of objectives varies from the development of digital railway infrastructure and charging stations for electric cars to seamless urban mobility. Rail, in particular, may benefit from 50 billion euros that are planned in the budget for the enhancement of clean energy including hydrogen. Business follows suit and uses the opportunity since the Government has set the rail industry a stretching target to achieve net-zero carbon emissions by 2050. DB Cargo UK and Maritime Intermodal have announced they conducted trials of 100% renewable Hydro-Treated Vegetable Oil (HVO) on their rail freight services from the Port of Felixstowe to the East Midlands Gateway freight terminal. In turn, operatives at PSA Antwerp will conduct studies into dual fuel (hydrogen/diesel) straddle carriers.
The clouds are thickening above Yantian. The congestion’s aftereffects are spreading like circles on the water and top the effect of those of the Suez – 300 vessels are now waiting due to disruptions at various ports which accounts for 5.5% of all vessels. From Shekou to Seattle, Amsterdam to Auckland, containerships are backing up like never before in the 65-year history of the industry. Due to further measures being implemented, increased congestion and vessel delays upwards of 16 days are expected in Yantian port. Comparing to the past, there would be plenty of buffer in the system to handle most of these disruptions, but with the networks stretched thin, every additional disruption is adding to the backlog now. Carriers, faced with increasing congestion, low productivity, and a mounting backlog of exports in southern China have been forced to omit port calls. Ocean Network Express had to add a $1,000 surcharge on reefer cargo to Yantian to cover additional costs related to the unexpected but necessary arrangement of shipments and associated plug-in charges. The situation boosts spot rates even more edging towards $20,000 per 40ft. It is an incredible 1,000% increase for the trade. Consequently, many retailers will not be able to shift stock at skyrocketed retail prices. Experts warn that many UK importers will find themselves trapped, paying eight times more for freight than last year, and expect insolvencies in 2022. Globally, numerous shipment suspensions have been announced in several regions across the world: to Cabinda in Angola; Hapag-Lloyd has confirmed it temporarily suspends all imports into East Malaysia ports (Kuching, Sibu, Bintulu, Kota Kinabalu, Labuan, Sandakan, Tawau – all due to blockages.
Unusual situations require extraordinary solutions. Hence, CMA CGM has signed a five-year partnership agreement with the French government space agency, to develop a range of topics including smart ship routing, the maritime energy transition, upgrading of port activities and infrastructures, and contributions of the space sector to the logistics optimization.
Negotiations between the EU and the UK on the Northern Ireland Protocol seem to require a mediator. Washington has expressed deep concerns over the lack of common ground regarding the question whether an agreement should be based on ‘temporary equivalence’ (the UK) or ‘temporary dynamic alignment’ (the EU). There are clear solutions available – both sides tell they are in favor of a veterinarian agreement that would free up the most difficult trade in meat and dairy goods, however, the final decision has not been made yet. Meanwhile, business values its time – Unifeeder aims to strengthen its presence in Northern Europe and launches a new service connecting the Hubport of Southampton to the Irish Sea and the ports of Cork, Belfast, and Dublin.
The rail industry is actively moving forward regardless of the storm at sea. Cargobeamer is opening its first terminal in Calais on 16 June. The terminal will enable the loading of uncranable semi-trailers on the train. Curtici in Romania becomes key for transit to and from Turkey. The service is offered by Rail Cargo Group and is part of the connection between Istanbul and central European destinations like Budapest and Brno. The new terminal started operating a week ago on the Kazakh-Chinese border. The Silk Road getaway is a part of the major project – in the future, the terminal’s final capacity will reach 700 thousand TEUs. However, there is currently a potential disruption looming over the railway horizon. Asia-Europe shippers and freight forwarders using the overland rail routes have been warned of potential obstacles that may arise due to the recent diversion of a passenger plane. Additionally re-routing of a high number of flights to China, Japan, and South Korea that regularly fly over Belarusian airspace will increase flight times and will result in the reduction of cargo capacity.
The ice breaks among hauliers. Despite the shortages and capacity limits, such company as Fergusons Transport expands its partnership with Universal Wolf. Universal Wolf now uses Fergusons trailers and trucks to transport its goods across the country, so far clocking up nearly 50,000 miles across well over 100 jobs in recent months. For both partners, it is a long-lasting strategy to retain their leading positions.
