News digest. 15 Jan

Civil unrest in different regions has been keeping the railway industry guessing if major disruptions are around the corner. However, the consequences are not as bad as they were painted. 

Without a doubt, civil unrest in Kazakhstan has left the world speechless and the logistics and transportation market in an uneasy state. Everyone expected mass disruptions, however, contrary to the popular belief, no harmful consequences have taken place. In addition, following the emergency alert and the unprecedented satiation, Kazakhstan Railways decided to cancel all fees, fines and charges related to rail freight transport in order to compensate companies for the potential disturbances. KTZ also made an announcement that railway traffic runs as usual through Kazakhstan. When it comes to political uneasiness, there are some other players that keep everyone alarmed – Belarus and Poland in the context of refugee crises. In this case, the situation does not seem to escalate as Belarus has claimed that it will not prevent the transit of Chinese trains and will supply China with products previously supplied by Lithuania, so no troubles for the New Silk Road in the coming months. This is a mass relief for the European industry as volumes are not slowing down their growth. 

The dynamic is the same for the shipping sector where ports continue handling tons of TEU. The new data has shown that the Port of Singapore remains the busiest, having registered a record high in container traffic of 37.5 million TEU.Singapore has also been ranked the top Leading Maritime City and is gradually becoming a leader in facilitating digitalization across all its facilities. These improvements definitely set the tone for others as the competition stakes keep increasing. Hong Kong is determined to keep up with the race, but the declining ranking does not promise so, thus the government is planning to enhance its status as an international maritime and logistics hub. The freshly created bureau will be in charge of the transformation and accelerate the adoption of technology, smart logistics and supply chains, and diversification of manufacturing bases. The Port of Antwerp has also joined the list of innovators by signing the first two leaseholders for 100 million euros for its NextGen District, its hotspot for a circular economy that facilitates the transition to a carbon-free future. The objective is to unite leading innovative players in the circular process and manufacturing industries who will give end-of-life products a second or third life, explore circular carbon solutions and develop renewable energy technologies.

A major boost is not far away from The Northwest Seaport Alliance either since for the first time in months terminals are back to handling multiple ships a day despite the slowdown in vessel loading due to holidays. Coming back in business, the port will also receive funds – a $15.7m grant – for expansion and to battle congestion. As for the most overcrowded ports – Long Beach and LA – the authorities have equalized the number of days both rail- and truck-bound cargo can stay on docks before being subject to a threatened per-diem fee. The initiative aims to influence shippers’ behavior since the strategy of threatening the application of the fee has proven to be working. However, the positive results will have to wait since the Chinese New Year is around the corner and overall, Asian and European ports (Felixstowe alone reports a record for the largest exchange of containers on a single vessel) alongside India continue to struggle as the volatility of spot rates and contract rates spills over in 2022. Container prices have risen at most of the major ports in India by at least 12% in January. Experts fear that if not controlled, the soaring rates will trickle down to consumers. The situation is topped with a 33% increase in imports and a 25% drop in production due to the implemented curfews. The practice has shown that where others cry from sky-rocketing rates, shipping lines are flourishing. The beginning of 2022 is no different for Maersk as it has reported a further $1.8bn in Q4 earnings. To illustrate the giant’s earnings for the last year, it is better to look in the retrospective of the past five years – 2021 has exceeded all of them combined, so the company keeps strengthening its presence on the market.