EU | UK news digest. 28 June
No time for rest — the spot rates are expected to grow as more obstacles come in sight. The UK’s importers are up for a challenge with the new context of post-Brexit reality.
The short-term freight rates are on the continuous rise this time breaching the $20,000 per 40ft mark from China to Northern Europe. Although these massively elevated rates include a premium fee guaranteeing equipment and space, shippers report that their cargo is still getting rolled. The situation is expected to get worse with the upcoming peak season. Similarly, rates on Shanghai-Rotterdam gained $779 to reach $11,975, a year-on-year change of 626%. Experts predict upwards pressure on essentially all headhaul trades.
The circumstances have also gotten more perplexed due to the Pearl River Delta port congestion that triggered another spike in volumes and rates for China-Europe rail freight. As a result, more delays and equipment shortages have been caused. The problem of the lack of space is becoming alarming since it is going to extend the growth of the rates. Now if shippers have the chance to ship goods, they are taking that chance and putting them in the warehouse already. Hence, strong demand will go on this year and there is probably no relief in the short term. Meanwhile, it has been reported that there are 17 blank sailings on the Europe to US east coast alone in the next 12 weeks.
The UK’s prestige route between London and Edinburgh is full, and rail freight is getting the blame. The government owned LNER had drawn a wave of criticism for its timetable proposals, which blamed the need for freight paths on its recast service. The company itself sees it as a disaster scenario for the North East and foresees the changes as a problem for the community.
The parcel flow from China to Europe will be hit by the end of exemption from duties on imports worth less than €22. From 1 July, parcels imported from non-EU origins will then require customs clearance, payment of VAT and, depending on national thresholds, customs duties. The €22 limit will be scrapped under a wave of protest from EU-based merchants, over a flood of cheap online purchases from China putting them at a competitive disadvantage. With the UK’s six-month moratorium on customs declarations coming to an end, importers are expected to fall into disaster. HMRC’s delay aimed to reduce strain on the system and provide importers sufficient time to adjust to post-Brexit procedures, but now they have too much on their plates to proceed the orders on time. Brokers believe the measure only postponed the inevitable crisis.
The train driver’s union GDL has conducted negotiations with Deutsche Bahn but the result has not been fruitful. Both parties agree to a wage increase, but GDL wants the increase earlier, while DB says it needs a longer term to cope with the financial corona damage. The call for warning strikes has been cancelled, but it does not mean that all issues have been cleared out. Deutsche Bahn has sharply criticised the GDL leadership’s blocking stance in the current collective bargaining round.
Sustainability is on and thriving. As part of the EU-funded Fastwater project which aims to demonstrate the feasibility of methanol as a sustainable marine fuel, Port of Antwerp has announced it is converting a tug boat to methanol propulsion. The European Commission approved the project. This decision will help the Port of Antwerp take another important step in its transition to becoming a sustainable and CO2-neutral port.
