News digest. 10 Oct
While shipping sector is occupied separating the wheat from the chaff (all the different surcharges), intermodal pushes forward towards the new milestone.
In the wind whirl of different surcharges, it is quite easy to lose one’s mind and keep track of the ocean freight prices played by shippers and surcharges to guarantee space and equipment. The difference between the two is growing, now reaching $10,000/FEU. It is getting more and more difficult to understand the market as, in addition to everything else, the spread between low to high and from short-term to long-term contract rates is bigger than ever before. The customers first, will have to carefully examine the reality and ask themselves such questions as to whether their cargo will go through congested port and how quickly they need it to be delivered. This is especially vital in America’s direction where the retail import rates are destined to remain at elevated levels through October. Without a doubt, ships will eventually get unloaded, but the peak season and additional pressure make it everyone’s headache. Spot rates are being driven up too, but there are a few loopholes – an opportunity for some forwarders to grab space at heavily discounted rates in last-minute deals during the holiday period, due to power outages causing production cuts in China. However, with no hopes for a recovery in the near future, this fortune seems more like an exception from the rule rather than a glimpse of possible improvement. Retailers, being hit the worst, are using it as an opportunity to speed up the deliveries, as there is no other choice if they want to satisfy the soaring demand. Home Depot becomes a pioneer of using GoLocal’s the same- and next-day local deliveries service.
Airfreight rates are no better as they continue to experience the climb following the rise in airline cargo capacity utilization that went up to 68%, higher than any pre-COVID peak season level since 2018.
The Port of Hamburg, the recent star of the headlines thanks to its partnership with China, continues to make its way with strengthening relations – this time with the Port of Valencia. The collaboration will cover such areas as decarbonization, digitalization, connectivity, and equality policies. So far, the parties have agreed that a new electrical substation can become the major tool for achieving the reduction of emissions in ports’ operations. Meanwhile, Climate and health coalition Ship It Zero is calling on IKEA to transition to zero-emissions shipping by 2030. IKEA has been one of the most vigorous retailers advocating for the green future, but now there is a petition demanding a faster and more confident approach from the giant.
The UK is still on the list of those struggling the most since the decisions of its leading ports to impose restrictions on the return of empty boxes due to congestion issues. For example, the Port of Felixstowe already suspended the return of Evergreen, Maersk, and CMA CGM empty containers. This all only compounds the severe shortage of HGV drivers that the industry is facing. One of the means to tackle this problem is the new campaign amid to bring back the drivers who already have a relevant license but chose to retire or switch to a more stable and profitable sector. The initiative is justified by the fact that the government is taking too long to implement the needed changes into the current visa policies but the labor force is needed ASAP. Data also shows that more than 13% of businesses are now facing big difficulties recruiting warehouse staff.
The perspective of shippers switching to rail becomes more prominent as they start questioning how frequently their needs can be met, and how rail freight services could improve. Perhaps, intermodal can kill two birds with one stone and address these issues. In addition, it provides alternative routes through more waypoints that can help to avoid congested ports. For example, Cosco Shipping Lines is offering an expedited intermodal service to get shippers’ goods from China to Chicago in the US in 19 days, which is a good lead-time compared to the delays due to congestion. Asia remains a desired partner for many companies despite the challenges the region is currently facing – Ukraine has launched its first export train to China in an ambitious attempt to establish itself as a New Silk Road transit and final destination, while the first east-bound train. However, there is its competitor in Kaliningrad, the main transit hub on the New Silk Road, where a new terminal has been opened. New connections concern the North too with Hupac adding another departure to its Lübeck-Novara shuttle. The UK to secure the future of its critical cross-border transport link in Wales in England and for this matter, Network Rail is going to invest 28m euros. The decision is dictated by the line’s vulnerability to climate disruptions and particular sensitivity to severe weather conditions.
