Shippers face new twists, risky turns in pandemic-alerted market
Supply chain practitioners looking for a game plan in 2021 find themselves in a difficult position. COVID-19 made suddenly safety stock no longer bad thing and it increased inventory carrying costs. The dramatic shift to on-line shopping, coupled with the expectations of next-day delivery, is also spurring the growth of imports at warehouse for major online sellers who need to have enough stock on hand not just to meet demand, but to meet it instantly. Shippers need to be prepared to pay a high price for everything for the next six months.
Read more: JOC
A 5.6 % decline in international trade in 2020
According to UNCTAD’s latest nowcasts – data led projections for the immediate future on 8 December 2020, the value of global merchandise trade is predicted to fall by 5.6% in 2020 compared with 2019. This would be the biggest fall in merchandise trade since 2009, when trade fell by 22%. The predicted decline in services trade is much greater, fall by 15.4% driven by a considerable decline in travel, transport and tourism activity.
Read more: UNCTAD
No relief from high rates, tight capacity on Asia-Europe trade
Equipment shortages, strong demand and soaring rates on Asia-Europe continued through the festive period, with forwarders and carriers seeing little sign of easing market conditions ahead of Chinese New Year on February 12 this year. A shipper said that a forwarder offered Asia-Europe rates on week 53 valid for a week of U$ 13,000 to U$ 16,000 per FEU. Accompanying the high demand on Asia-Europe since the third quarter peak season has been an acute shortage of empty containers in China, and the Europe logistic executive said tight equipment availability would remain a severe problem into the second quarter.
Read more: JOC
Boxships waiting at anchor for up to two weeks on US West Coast
A number of containerships have been waiting for berths at the congested terminals at Los Angeles and Long Beach with one vessel now reported at anchor for a full two weeks. The Marine Exchange of Southern Californica reported 34 containerships at anchor awaiting a berth on 3 January, with another nine expected to arrive on 4 January. In addition to 26 scheduled weekly liner services from Asia, an unprecedented number of extra-loader vessels are overwhelming the port complex. While ports are under pressure themselves, overflowing warehouses and distribution centers, and a shortage of drivers are among issues slowing the removal of containers from terminals and allowing the off-loading of more cargoes.
US East Coast ports avoid gridlock despite rising volumes
US East Coast ports in November were challenged in handling a year-over -year 30 percent increase in imports from Asia, but have been able to avoid the gridlock that is gripping the ports of Los Angeles and Long Beach. Director of Port Authority of New York and New Jersey says the gateway remains fluid, although there is tightness throughout the New York-New Jersey supply chain, including mounting container dwell times at marine terminal and chassis dwell times at warehouses. 2,500-4,500 container moves per vessel call are observed on the East Coast, while about 8,000 to 12,000 moves per vessel are witnessed in Los Angeles and Long Beach.
Read more: JOC
UK Shipowners, shippers and shoppers need answers
UK port chaos is nothing new, as those who remember the National Dock Labor Scheme, which effectively provided dock workers with a job for life, will testify. Margaret Thatcher’s government eventually repealed the scheme in 1989. The UK ports have defended their position pointing to “unprecedented pressures” on the global supply chain and Brexit blockers, but there has also been talk about whether profit-driven port owners have made excessive cuts and are not prepared as they might be. While the ports have dismissed the calls for a government inquiry, arguing “the issues are well understood and there is no case for significant intervention”, this does not seem to be cutting it with those companies caught up in the congestion.
World Shipping Council rejects US criticism
Two US Federal Maritime Commissioners, Carl Bentzel and Daniel Maffei, in a letter on 16 December to the World Shipping Council, expressed their growing concern with reports that carriers were refusing to receive export bookings, while acknowledging that sustained high import demand was causing operational challenges throughout the supply chain.
In a 28 December letter to FMC commissioners, John Butler, president and CEO of the WSC said carriers are employing all available vessel capacity; repositioning vessels to those trades with the highest demand; speeding the return of excess empty containers; and working with supply chain partners to reposition empty equipment for carriage of import and export cargoes. Butler noted that the US imports and export trades are unbalanced, with total US imports are almost twice the volume of exports but expressed that carriers will continue to work with their customers and supply chain partners to keep US international trade moving.
Hapag-Lloyd orders six LNG-powered 23,500 teu containerships
Hapag-Lloyd announced 23 December that it will spend U$ 1 billion to build six 23,500 teu container ships that will be powered by LNG Dual Fuel to be delivered between April and December 2023. While LNG backers see it as the best transitional option to a low-carbon future on account of its carbon emissions reductions, critics highlight the problem of methane slip in these engines, which increases a greenhouse gas that is, although more short-lived, thought to be more damaging for global warming than CO2 is.
The first annual disclosure report by the Poseidon Principles initiative
A pioneering disclosure report by the Poseidon Principles initiative shows a very close average climate alignment of 2019 portfolios of shipping lenders, but with significant variations among members and only three outperformed the necessary decarbonization trajectory of the shipping fleet.