Middle East container ports most efficient globally in 2021: index
Ports in the Middle East were the most efficient in the world in 2021 amid widespread disruption stemming from a pandemic-induced spike in volumes flowing from Asia to North America and Europe, according to the second edition of the global Container Port Performance Index (CPPI), jointly developed by the World Bank and IHS Markit, now part of S&P Global. Middle East gateways represented four of the top five ports in the annual CPPI rankings, with Saudi Arabia’s King Abdullah Port rising from the No. 2 spot last year to lead the 2021 index. King Abdullah Port handled an average of 97 container moves per hour of vessel port time last year, compared with 26 container moves per hour at the major ports on North America’s West Coast as a deluge of trans-Pacific imports caused severe bottlenecks both at the ports and throughout the inland supply chains that serve them. The Port of Salalah in Oman, Hamad Port in Qatar, Khalifa Port in Abu Dhabi, and Shanghai Yangshan in China rounded out the top five. According to the index, last year’s most efficient port, Yokohama, dropped to 10th place based on the total port hours per ship call, cross-referenced with the workload achieved. Thirty-seven ports were new to the 2021 CCPI, and 149 improved their rankings compared to the 2020 index.
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China lockdowns affected the supply chain
The worst of Shanghai’s coronavirus outbreak appears to be easing, with a decline in new infections allowing for a relaxation of strict lockdown rules, a resumption of factory operations, and increasing port volumes. But the scars left by the crisis and China’s underlying zero-Covid policy will take time to heal. Waiting times for vessels calling at Shanghai are beginning to normalize as pandemic-related restrictions in the city are eased. Average waiting times for containerships have almost halved from 69 hours in late April to 36 hours in late May. Easing lockdown measures in Shanghai, home to the world’s busiest container port, have raised the prospects of a strong pickup in cargo volume. Data from China’s transport ministry shows that the daily box throughput at Shanghai in late May has recovered to about 95% of the pre-lockdown levels, compared to around 80% last month. However, the container shipping and port-arm of China COSCO Shipping Corp also warned of risks lurking in the liner shipping market.
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Ports congestion in the US and Europe
US supply chains are gearing up for what could be another disrupted peak season, despite some indications of a slowdown in demand. On the US west coast, the number of vessels waiting to berth at Los Angeles and Long Beach fell to a new low of just 25 on 25 May, down from a peak of 109 in January. But congestion in the US has not disappeared, merely repositioned. “Asian imports to the US west coast fell by 3.4% in the first quarter of the year, but the volume of goods entering the US east coast rose by 12%, and the US Gulf coast saw a staggering 31% increase,” said Xeneta chief analyst. A slowing of import volumes into North Europe has done little to mitigate congestion at hub ports in the region, with full container yards and labor shortages hampering operations across terminals, warehouses, and trucking services, resulting in lengthening ship delays. Schedule delays for container vessels completing round trip voyages between Asia and North Europe averaged 20 days between 1 May and 15 May, up from 17 days for February, according to maritime analyst Alphaliner. As a result, average Asia-North Europe round trip voyages for the largest vessels are now taking 101 days, compared with about 77 days on their pro forma schedules.
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Container contract rates continue to climb
Long-term container freight rates have continued to climb, making life for shippers challenging, according to rates visibility platform Xeneta. May saw the highest-yet monthly increase as the cost of locking in container shipments soared by 30%, it said in a report. According to its figures, long-term contract rates are 150% higher than last year, while in 2022, rates have climbed by 55%.
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European short-sea RO/RO market undercut by Russian sanctions
Car carrier operators are facing mixed fortunes as European short-sea carriers grapple with the disruptive impact of Russia’s invasion of Ukraine while long-haul operators see buoyant vehicle demand across the Atlantic and from Asia, executives said. Short-sea roll-on/roll-off (RO/RO) executives said they have struggled to find alternative markets to offset the loss of vehicle tonnage as manufacturers stopped all cargo shipments related to Russia and Belarus due to sanctions imposed in the aftermath of Moscow’s 24 February invasion.
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The situation on railway container transportation in the US
West Coast port officials say excessive rail container dwell times due to insufficient rail assets and capacity threaten the gains ports are making in clearing vessel backlogs and lowering truck turn times. Union Pacific Railroad is warning that chassis supply could get tight soon in several US markets. It will not allow shippers to drive with their private chassis if DCLI, TRAC Intermodal, and Flexi-Van Leasing run out of equipment. BNSF Railway is congested in Chicago, Memphis, and Kansas City with insufficient chassis to move ocean containers, but the railroad takes several measures to alleviate the congestion. On the other hand, The US Department of Transportation has awarded $6.2 million to upgrade part of the tracks that connect the port of Savannah to Georgia’s first inland port.
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West coast labor talks and terminal automation
According to a source close to the talks, contract negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) resumed on 1 June in San Francisco after a 10-day break. Messaging from employers and longshore unions indicates that the contentious issue of automation is coloring recently suspended contract talks between the International Longshore and Warehouse Union and the Pacific Maritime Association. The MetroFreight Center of Excellence/METRANS Transportation Consortium at the University of Southern California complied with a new report on marine terminal automation. The report found that while reducing labor costs is a major driver, multiple benefits throughout the operation must be considered to justify the large capital expenditure.
Decarbonization of shipping companies
Ocean Network Express ordered ten ships with 13,700 TEU capacity to run on ammonia and methanol as part of a fleet and equipment investment plan that extends the carrier’s order book to 30 percent of its in-service fleet. Leading carriers on the intra-Asia trade have partnered with bunker suppliers, shipyards, engine makers, and banks in Lloyd’s Register-backed alliance to develop a “green corridor” fuel transition strategy supporting the maritime industry’s drive to decarbonize by 2050. The partnership named the “Silk Alliance,” brings together 11 companies from across the maritime supply chain, including MSC Shipmanagement, Pacific International Lines (PIL), Wan Hai, X-Press Feeders, Yang Ming, Keppel Offshore & Marine, and Wilhelmsen Ship Management, as well as financial institutions such as the Asian Development Bank and ING. Powering its ships with green methanol will significantly increase fuel costs for Maersk, but the carbon-free fuel offers greater scalability than other options.
Investment in the technology for supply chain visibility
Software provider Everstream Analytics plans to use a new $24 million investment to expand the geographic reach of its suite of supply chain risk and network planning products. Envase acquired GPS tracking technology maker GeoStamp. Envase is the parent company of a group of widely used transportation management system (TMS) brands for dray carriers. GeoStamp builds tracking, analytics, and dispatch planning and optimization tools for the drayage industry. It uses GPS location data plotted against detailed geofencing to measure metrics like truck dwell times and delays. The acquisition will enable Envase to track more than 7,000 trucks nationwide and provide its customers with associated driver and asset performance metrics.
