World Maritime News (37)

Port congestion in Europe

The number of vessels waiting in European anchorage remains steady, but congestion is still a problem behind the scenes. A rise in coronavirus infections is responsible for the labor shortage. The beginning of the summer holidays is putting further stress on operations. Strikes over pay at Germany’s North Sea ports threaten to worsen the situation in Europe. Negotiations between the German trade union and the Central Association of German Seaport Companies have failed to provide a resolution.


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The outlook for container freight rates

Risks have increased that the pandemic-led liner shipping boom will backtrack, but carriers will not easily let that happen. Container shipping carriers have enough reasons to be vigilant about the recent freight rate correction, as the likelihood of it developing into an `inevitable long downwards slide’ appears to be increasing. More obvious signs of market weakness on the trans-Pacific and Asia-Europe trade lanes are emerging as spot rates fall markedly below seasonal average levels despite the traditional peak shipping season underway. Supply chain costs that hit new highs in 2021 are not likely to drop in 2022 as rising interest rates, historically high fuel prices, and inventory carrying costs keep pressure on the budgets of US shippers. Speakers said those costs are countering softening spot and contract transportation rates on 21 June at the 2022 Council of Supply Chain Management Professionals (CSCMP) State of Logistics report.


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High container freight rates showing in inflation figures

UNCAD simulated the price impacts of increased freight rates last November, suggesting that it would lead to 1.5% inflation. Import prices at the border had risen even more steeply, but these have not been immediately fed to the consumer. However, the global number masks wide discrepancies across different markets. For example, globally, import prices are up 11.9%, but in small island developing states, the increase is over 25%. The inflationary impact of higher freight costs also varied depending on the product type, with some, such as furniture, seeing increases of over 10%. On the other hand, high-technology products like computers have risen by 11.4%. These products have very deep supply chains and can have nine levels of suppliers. If each of these steps is produced in different countries, then products are moved in a container nine times, adding up and leading to a higher impact on prices, according to Mr. Jann Hoffmann, head of trade logistics of UNCTAD.


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Logistics faces a new reality after pandemic and war

The pandemic and the war in Ukraine have created a “new reality” for container terminal operators and have dismantled previous certainties. Hamburger Hafen und Logistik (HHLA) chairwoman Angela Titzrath warned there was a shift in expectations following Russia’s invasion of Ukraine, which led to the closure of the company’s terminal in Odesa. Meanwhile, the pandemic continued to impair cargo’s free movement, particularly with port closures in China. She said, “the disruptions to supply chains are creating major operational challenges for us. The biggest challenge for us at the moment is that ships are not adhering to their expected arrival time, while at the same time, export and import cargo is being delivered too early or too late. The result is an accumulation of containers that block the system and slow handling operations.” She called for increased co-operation to help resolve the situation.


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Ocean Shipping Reform Act of 2022 (OSRA-22)

Federal Maritime Commission Chairman Daniel Maffei said the new US law governing container equipment fees and exports would make his agency more “capable, robust, and active” in investigating how ocean carriers treat US shippers. He added the groundwork for its enforcement is already underway. The Ocean Shipping Reform Act of 2022 (OSRA-22) also drew praise from others in the ocean supply chain for its attempt to change business practices in overseas shipping. But the head of a major West Coast terminal operator said OSRA-22 would mean more paperwork and costs for everyone in ocean transportation. Ocean carriers have been looking at providing more export capacity to US agricultural shippers to avoid scrutiny from regulators. Still, OSRA-22 will now put those efforts under a hotter spotlight. Under OSRA-22, carriers are subject to fines if they charge detention and demurrage for situations beyond a shipper’s control, such as the inability to move cargo because of congestion, lack of appointments, or a shortage of chassis. While detention and demurrage were contentious issues long before the pandemic, complaints have flared in the past two years because of frustration with fees amid historic US port congestion. The next logical step in reforming US shipping law — the elimination of ocean carriers’ antitrust immunity — was briefly proposed earlier this year but shot down due to its potential impact on carriers’ ability to operate within alliances.


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European Council agrees to extend ETS to shipping

Maritime shipping emissions are to be included in the European Union’s carbon market following an agreement by the European Council. Lawmakers adopted the Council’s proposal to introduce obligations for shipping companies to surrender allowances gradually. The Council also agreed to make it easier for ships to access the EU’s low-carbon Innovation Fund, making it easier to support the deployment of green hydrogen or wind technologies. In addition, the Council agreed to keep the overall ambition of 61% of emissions cuts by 2030 in sectors covered by the ETS, plus a one-off reduction of the overall emissions ceiling by 117m allowance and to increase the annual rate at which the emissions cap reduces by 4.2% a year.


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The current situation on decarbonization target of shipping companies

Most big shipping companies have yet to set out clear decarbonization strategies, according to the findings of a study. It found that 33 out of 94 — or 35% — of major shipping companies have a clearly expressed target to be net-zero by 2050 or have committed to the International Maritime Organization’s targets of an absolute 50% reduction compared with the 2008 level. “The state of decarbonization in the maritime industry shows that while real progress has been made, there is a long way to go for the industry to reach net-zero within the limited time left to transition.” A comparison with other industries suggests that 35% of shipping companies with IMO or net-zero 2050 pledges is low. A 2020 KPMG study of leading 100 companies by revenue in 52 countries across industries found that 66% of automotive, 56% of oil and gas, and 45% of transport and leisure companies had sustainability reports with carbon-reduction targets. Lloyd’s Register warns companies to act sooner rather than later to comply with the International Maritime Organization efficiency rules kicking in next year.


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The current situation on alternative marine fuels

A study on procedures for handling ammonia as a shipping fuel is on track to be released early next year, according to the Global Centre for Maritime Decarbonization. The center’s chief executive, Professor Lynn Loo, said, “If we manage to bunker ammonia safely here in Singapore, it is possible to replicate the model worldwide.” The center, set up last year, has $155m in funding to support the testing and deployment of green technologies and fuels. Asia and Europe differ in their approaches to decarbonization, according to Winterthur Gas & Diesel chief executive Klaus Heim. While there was no clear global preference for methanol or ammonia fuel, the split between regions was notable. He said, “In Asia, the main track is ammonia, while in Europe, Maersk has triggered quite a strong focus and trend towards methanol.” On the other hand, CMA CGM and French energy giant Engie are co-investing in a biomethane project in the North European hub port of Le Havre that will produce up to 200,000 tons of renewable gas for shipping industry by 2028. The project is the first initiative to produce second-generation biomethane to achieve net-zero emissions by 2050, the carrier said in a statement on 30 June.


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Aleutian Islands ‘well situated’ to be hydrogen bunkering stop

There is a strong case to invest in hydrogen bunkering in the Aleutian Islands of Alaska. An International Council on Clean Transportation study found potential demand for liquid hydrogen at the islands, which form a chain east of Alaska separating the Pacific from the Bering Sea. It ranged from 10,000 to 260,000 tons annually, with an annual market worth more than $1bn.


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Container sensor usage to explode through 2026

Maritime analyst Drewry is projecting that containers equipped with tracking hardware will account for 25 percent of the global box fleet by 2026 — an eight-fold increase over current levels. Drewry said, “Smart containers have increased in prominence following the onset of the COVID-19 pandemic and resultant supply chain disruption, which has highlighted the need for better cargo visibility to cope with longer and more volatile transit times. And the pace of adoption of smart containers is expected to accelerate over the next five years.”


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