Latest News CN calls a halt to reopening in BC. Flooding in southern B.C. continues…
A global effort is underway to nudge the shipping market toward emissions reduction—the International Maritime Organization (IMO), in conjunction with the Singapore Ports Authority, will “embark on emission reduction mechanism like market-based measures to incentivize the uptake of alternative fuels” to ensure that “no country is left behind in the transition to carbon neutral shipping.” On September 17, the European Parliament also voted to include the shipping sector in its EU Emissions Trading System (ETS) and seeks to reduce annual average CO2 emissions per transport unit for all ships by at least 40% by 2030.
A new customs program known as the ASEAN-wide Self-Certification (AWSC) regime was launched on September 20, allowing enrolled exporters to self-certify the origins of their goods—the program is expected to curb customs clearance times and provide cost savings to shippers.
Ocean Network Express (ONE) launches its Japan-China-Vietnam (JCV) direct service route on October 15 to facilitate cargo movement between Shanghai and Ho Chi Minh City. The 2M shipping alliance reinstates previously blanked transpacific service routes, adding that the number of blanked sailings through China’s upcoming holiday Golden Week would be lower than normal.
Last week, a panel of three trade experts ruled in the enduring trade dispute brought by China to the World Trade Organization (WTO), which alleged that the US imposition of $400 billion worth of tariffs on Chinese exports in 2018 violated international trade regulations. In their report, the judges concluded that the US “had not met its burden of demonstrating that the measures are provisionally justified”—interesting to note is that the panel questioned one of the justifications raised by the US, which attribute Article XX(a) of the 1994 General Agreement on Tariffs and Trade to deem the tariffs as “necessary to protect public morals.” Though an appeal can be filed within 60 days of the ruling, industry analysts are unsure how the US will respond to these conclusions, as the current WTO Appellate Body does not have enough judges to provide a verdict. In related news, the candidate pool for Director-General position of the WTO has been reduced to five members; the organization intends to select the successor in early November
Air Cargo Report: More capacity comes on line, but shortage persists: Every Sunday our Air Cargo Market Update shines a spotlight on rates and other trends influencing transportation suppliers and buyers. This week we’re going to focus on new capacity coming into the market, mostly in the form of freighters. All-cargo operators, including passenger airlines operating cargo-only aircraft, are experiencing record load factors and are expected to be booked solid for the remainder of the year on major trade lanes, with passenger traffic expected to be stunted by the pandemic into 2021. Meanwhile, manufacturing in China is back to full speed after the coronavirus outbreak, e-commerce transactions are exploding, retailers are rebuilding inventories and stocking up for the holiday season, technology companies are preparing to release hot new devices, a potential COVID vaccine will need to be rushed to market in the near future and orders keep coming for coronavirus medical supplies. How tight is the market? Consider that freighter capacity now accounts for 66% of total air capacity on the trans-Atlantic lane, 83% on the trans-Pacific and 80% on the Europe-to-Asia lane, according to estimates provided by Brie Carere, chief marketing and communications officer at FedEx, during the company’s earnings call this week. That compares to pre-COVID freighter capacity of 33% for the trans-Atlantic, 59% for the trans-Pacific and 50% for Europe to Asia. Air cargo operators and logistics companies are responding to the short supply with several new offerings for shippers, making a small dent in the transport shortage businesses face. A large portion of the new equipment is devoted to the Asia market, where rates are rising again amid competition for limited cargo space.
Pharma, perishables and e-commerce driving air cargo recovery in India. India’s air cargo market is gathering steam, with exports leading the recovery, postlockdown. Mumbai International Airport (MIAL) saw 18,820 freighter movements between April and August, with general cargo volumes up 278% to 72,000 tonnes. SpiceXpress, the cargo arm of low-cost carrier Spicejet, has also seen a big uptick in cargo volumes and revenue through the lockdown, when the focus switched to freight as passenger travel became almost non-existent. Last week, in its first quarter results to June, the carrier claimed it had emerged as “India’s largest cargo airline”, with cargo revenue up 144% over the period, carrying 50,000 tonnes on 7,000 flights, of which 40% were international. SpiceXpress operates a fleet of 13cargo aircraft, and in August launched long-haul widebody cargo operations on two Airbus 340s to Europe, central Asia and Africa. Ajay Singh, Spicejet chairman and MD, said the long-haul flights were a “huge game-changer”.
All alliances reinstate transpacific capacity: All three east-west alliances have now committed to reinstate blanked sailings in October on the booming transpacific tradelane. Maersk, part of the 2M vessel sharing agreement, communicated last week its intention to reinstate blanked sailings from Asia to the west coast of North America next month, citing enormous pent-up demand, as has Cosco and subsidiary OOCL, both of whom are in the Ocean Alliance. THE Alliance member Hapag-Lloyd, meanwhile, has told clients it is bringing back all but five of its blanked sailings to the west coast next month. Maersk said in its customer advisory that it anticipates strong import volumes to North America to carry on until at least November. The record spot rates seen on the transpacific to the west coast in recent weeks, have sparked alarm in China, South Korea and the US. The Shanghai Containerized Freight Index (SCFI) on Friday reported rates edging again this week. Beijing has stepped in over the 10 days demanding carriers add more capacity on the tradelane and ease price increases. The Federal Maritime Commission (FMC) in Washington also met last week to take a look at the situation. Commenting on the swift deployment news seen in the past week, Andy Lane from Singapore’s CTI Consultancy, told Splash: “We need to see how far the bull-run goes on for, and if demands starts to appear to soften, then I am also sure that you will see last minute blankings.”
The Port of Halifax continues to experience congestion at its two container terminals. All supply chain providers are working to clear the backlogs as quickly as possible.
Record gap between short vs long contract freight rates on transpac. The gap between short-and long-term contract ocean freight rates on the transpacific trade lane has risen to a new record difference per FEU, shipping association BIMCO has highlighted. And the record gap, according to figures from digital rates specialist Xeneta, is likely to mean higher long-term freight rates when contracts with cargo owners and shippers come up for negotiations and renewal in the coming weeks and months, observed BIMCO’s chief shipping analyst, Peter Sand. In a briefing note yesterday, Sand noted: “As the year 2020 continues to deliver positive surprises for the container shipping sector, the gap between short- and long-term contract freight rates on the transpacific trade lane has never been wider. The stars are now aligned for carriers to achieve higher long-term contract rates
Importers ‘close to breaking point’ as tension rises at Sydney’s Port Botany. Other strike-hit container terminal operators and supply chain players are backing a DP World Australia bid to end the “crippling” industrial action at Sydney’s Port Botany. Work stoppages by the Maritime Union of Australia (MUA) have caused an 11-day cargo backlog at the port, with a knock-on effect of container supply chain congestion spreading to Melbourne and Brisbane as vessels are diverted. On Tuesday, DP World lodged an application with the Fair Work Commission (FWC) to have the industrial action terminated, arguing it “endangers supply chains for critical products and exports and puts unacceptable pressure on the economy”.
Maersk refuses bookings for shipments to Sydney as the port struggles to cope. Despite signs of a rapprochement between docker unions and container terminal employers in the port of Sydney, shippers have been warned to expect continuing congestion in container supply chains. And some carriers are refusing bookings for shipments to the port. Yesterday,
Maersk announced a temporary suspension on Sydney bookings, likely to last until the end of the month. It said: “To remove uncertainty for our customers’ supply chain and to assist handling of our vessels calling Sydney, Maersk is taking the difficult decision to temporarily stop acceptance of all new bookings from Asia, Europe, Middle East, Africa and India sub-continent to Sydney, effective immediately. “It is expected we will re-open booking acceptance from 1 October, but will continue to review the situation and open earlier if possible,” said a customer advisory, which added that Maersk would still accept bookings from North America.
Cargo theft a growing concern in Canada Total losses from cargo theft at $5 billion a year, trucker says. CALGARY – People may have found it odd when thieves made off with truckloads of hot tubs and beef within days of each other in rural Alberta, but the Insurance Bureau of Canada says it highlights a growing type of crime perpetrated by sophisticated culprits. “It’s obviously not a new problem. But from what we’re seeing in the statistics, the problem seems to be getting worse,” said Sid Kingma, who directs the bureau’s investigative services arm in Western Canada. Last year, $35 million in cargo theft losses were reported to the bureau, compared to $2.1 million five years earlier. In 2014, when the bureau started compiling cargo theft statistics, $270,000 in stolen cargo was recovered. In 2019, that figure was $14 million. Kingma cautioned that the bureau’s numbers reflect only a small snapshot of the problem based on reports it receives. The Canadian Trucking Alliance has put total losses from cargo theft at $5 billion a year.