World Maritime News (21)

Ports of Los Angeles and Long Beach charge for lingering containers

Ports of Long Beach and Los Angeles impose financial penalties on ocean carriers for import containers that dwell too long at marine terminals. 

They began charging $100-a-day from 1 November for containers that remain nine days or more on a marine terminal if they are scheduled to move by truck and six days or more if moving by rail. But the ports will not begin assessing the penalties until at least 15 November. 

The ports make what they call a last-ditch effort to improve the flow of containers by penalizing carriers when boxes remain at marine terminals too long. Trans-Pacific shipping lines say they have no intention of paying new “emergency” fees from 1 November in Los Angeles and Long Beach. Instead, carriers will pass those new charges on to major retailers, which changes typical carrier-customer relations in the most prominent US trade lane. 


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Port Congestion stresses global supply chains

According to E2open Ocean Shipping Index, as of 21 October, an average of 70 days is needed to book a container, have it shipped overseas, and receive it by ground transport for final delivery. It is 13 days or 23% longer than the previous year. 

Bottlenecks in the containerized supply chain worldwide have pushed container line schedule reliability to its lowest level yet, and there are few signs of any rapid improvement. 

The latest figures from Sea-Intelligence’s global container line performance database show that just 34.3% of vessels arrived within one day of their scheduled arrival time in September. The average delay across the global fleet was more than a week. 

Los Angeles and Long Beach ports set a new record on 21 October, with 79 containerships waiting either at anchor or in holding areas off San Pedro Bay.

It is not just the US ports that are suffering, however. In the UK, the major box ports of Felixstowe, London Gateway, and Southampton were also affected.

According to Kuhne+Nagel’s Seaexplorer, Felixstowe was facing severe congestion with the yard at 92% capacity, London Gateway was “heavily congested” and facing a “severe shortage of haulage from the port.” In Southampton, dwell times had increased to seven days partly driven by issues at Felixstowe, from which carriers routed empties to Southampton.

The world’s largest container ships are deployed on the Asia-Europe trade, and port omissions by carriers to recover schedules lead to sometimes dramatic increases in call sizes. For example, in mid-October, Antwerp’s MSC PSA European Terminal handled 12,000 boxes (19,677 TEU) on the Manila Maersk during a single call, according to a recent Alphaliner newsletter. Lennart Verstappen, a spokesperson for the Port of Antwerp, said both the average and peak call sizes increased. The peak call sizes were also becoming more frequent, which was a particular concern. He said, “Container vessels arriving out-of-window causing too long dwell times for export containers. In addition, peak call sizes caused large inflows of import containers, and put a massive strain on container terminals and exert downward pressure on terminal capacity.”

The surges in call sizes are being piled on top of container terminals, struggling to cope with ships arriving far outside schedule windows, which is a leading factor in the port congestion across North Europe hubs.


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Outlook for the inventory-to-sales ratio in the US

A fall in US retail sales will not bring any relief to the congested supply chains in the country as long as inventories remain at the current low levels.

According to BIMCO chief shipping analyst Mr. Peter Sand. “The many months of exceptionally high retail sales have clogged up supply chains. Although easing sales should therefore be good news, the currently very high levels still mean there is little end in sight for the problems affecting warehouses, hinterland transport, ports, and containerships.”

Retail inventories are rising but remain 9.2 percent below the pre-pandemic high point in terms of value, and shippers are trying every possible strategy to avoid stockouts.

The latest US Census Bureau data shows that the gap between retail inventories and sales was almost $55 billion in August. Retail inventories were up 2.3 percent in August year over year but down 9.2 percent compared with August 2019, the pre-pandemic high point for retail stocks.


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Freight rates wobble, but they don’t fall down

Container freight rates continued to hover around their all-time highs as continued strong cargo demand meets with capacity shortages driven by supply chain disruption.

Xeneta chief executive Patrik Berglund said, “Carriers are still sitting pretty in a sellers’ market and calling the shots.”

Meanwhile, there are fears of further disruptions at ports of origin in Asia. Maersk has warned customers that key manufacturing areas in China, including Guangdong, Jiangsu, and Zhejiang, have been subject to electricity rationing measures.


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Box Carriers return to mid-size tonnage for fleet renewal

After years of focusing on ever-larger units to benefit from lower slot costs, this year has seen almost 60 orders for vessels in the 7,000 teu range, according to figures from Alphaliner. “Essentially, every trade route for which a Panamax is workable today could be serviced equally well — or even better — with a compact 7,000 teu ship. That is, provided the route can use the 40% bump in nominal capacity,” Alphaliner said. Bunker consumption and carbon emissions will increasingly move into the spotlight in the coming years. The main selling points of the new compact 7,000 teu class are an efficient use of space, excellent stability, intake, and thus its overall high efficiency.


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COP26: Calling for zero emissions from shipping by 2050

THE US, UK, Denmark, and the Marshall Islands have taken the stage at COP26 to call for zero-emissions shipping by 2050.

The Danish Prime Minister urged the International Maritime Organization to set ambitious targets to achieve the goal, double the shipping regulator’s current target.

US climate special envoy, Mr. John Kerry, praised AP Moller-Maersk’s decision to order methanol-fuelled ships and initiatives such as the Getting to Zero Coalition and the announcement by Amazon, IKEA, and other retailers to commit to zero shipping emissions by 2040. “Full decarbonization of the international shipping is the goal,” he said. “We believe it is absolutely achievable.”

Shipping heads shared cautious optimism on the eve of COP26, but the long-heralded UN conference is just the opener as pressure and uncertainty mounts on how to spur decarbonization. The success or failure of countries to agree to curb CO2 emissions will help set the tone for the International Maritime Organization’s next big environment meeting, the Marine Environment Protection Committee, from 22 November.

Shipping has historically had a fragmented approach to cutting emissions. The industry’s leaders need to find a unified voice.

Success at COP26 could spur the IMO to pick up the pace. But, on the other hand, failure could give it an excuse to dither and delay, as is the unfortunate natural propensity of bureaucracies always.


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Many states and the shipping industry support carbon levies.

A group comprising over 50 nations particularly vulnerable to the effects of global warming have called upon the IMO to establish a greenhouse gas levy on international shipping.

The Maersk Mc-Kinney Center for Zero Carbon Shipping, which includes Maersk, NYK Line, and Cargill as founding partners, announced the outline of the benefits of a carbon tax in its Industry Transition Strategy.

The report flagged a carbon levy that began at $50 per ton from 2025 and increased to $150, with funds given to early adopters of alternative fuels and $300bn distributed to developing countries. It said putting this price on carbon would “close the fuel gap sufficiently to bring the maritime industry close to net-zero by 2050.”


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Opinion for excluding shipping from EU climate change rules

The World Shipping Council (WSC), which represents nearly 90% of the world’s major container lines, warned that the EU’s plan to extend its Emissions Trading Scheme (ETS) to vessel voyages outside Europe could undermine broader international progress to decarbonize the maritime industry. The WSC calls for international shipping to be excluded from emissions trading and fuel limits under the EU’s Fit-for-55 package.

In its position paper, the WSC also wanted to place responsibility on fuel suppliers of lower-emission fuels rather than on shipowners to use them.


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