Outlook for container freight rate
The peak in freight rates may have already passed. But even getting rates down to a ‘new normal’ of twice their 2019 levels will take up to two years. Spot rates may have fallen by one-third from their extreme peaks, but shippers should not expect rates to return to pre-pandemic levels for at least another year.
Markets are expected to head further south this year amid weaker demand after the peak season. As a result, spot rates on the China-US west coast trade have dropped below $5,000 per feu, with weakening market sentiment playing one carrier off another for lower prices.
The container shipping sector remains “full of uncertainty.” It could end up in the unprecedented situation of shipping lower volumes in the year’s second half than in the first half.
Various measures against port congestions
Mojave Inland Port, located 90 miles north of Los Angeles-Long Beach, is proposed to build a one-stop shop for retailers, logistics services providers, and railway companies as an alternative to truck-served transport in the congested Inland Empire region.
The modernization of the Centerm terminal in Vancouver, Canada, uses artificial intelligence to keep cargo moving faster and speed up railed containers in and out of the terminal. It will ultimately become a lesson for other terminals ensuring more container capacity with land restrictions.
The New York-New Jersey marine terminals have constantly been offering Saturday gates over the last two years to relieve the tremendous import volumes at the port. But in that time, Saturday gates have only accounted for about 5 percent of total truck transactions, according to data from the Port Authority of New York and New Jersey.
Drought and strikes disrupt European ports
German authority said the Rhine would remain open, and barge companies would decide on their own whether to operate services with a part of the Rhine water levels reaching record lows.
The port of Liverpool in the UK faces industrial action after staff overwhelmingly supported a ballot in favor of striking. This August, the UK supply chain faced disruption when the country’s largest container terminal, Felixstowe, came to a standstill due to the strike.
Congestion in Europe is set to worsen on the back of industrial action. UK supply chains are already reporting disruptions from the strike at Felixstowe. With more disputes on the cards, the headaches are likely to spread.
Topics of container lines
The 2M Alliance (MSC and Maersk) handled a larger share of containerized US imports during the first five months of 2022. As a result, it narrows the gap between itself and the Ocean Alliance(CMA CGM/APL, Cosco Shipping/OOCL, and Evergreen Line), according to JOC.com’s rankings of the Top 40 Container Carriers by US Imports and Exports.
The imbalance between global demand for containership capacity and the available fleet capacity is beginning to reverse as congestion unwinds and more capacity comes on stream.
Carriers are still focusing capacity on more lucrative longer trade lanes. Container lines take tonnage from intra-regional services to provide slots on main lane trades.
Small- and medium-sized carriers trading across the Pacific have outperformed those who stayed with niche trades. There were big margins for carriers who expanded on the transpacific trade during the pandemic. But the gap between the top 10 lines and the rest continues to grow.
Carrier53, a joint venture company of a break bulk ship operator and a container manufacturer, provides transpacific services between China and US west coast. The company focuses, in particular, on intermodal container transportation using US domestic 53-foot containers.
An analyst said that carrier’ tonnage tax’ changes would alter the competitive landscape. The tonnage tax is just one of the many elements that skew the playing field. Eliminating it would still result in a skewed playing field — to the benefit of some carriers and the detriment of others.
Maersk signs up seventh methanol supplier
Maersk has signed off on another green methanol partnership with Chinese bio-energy company Debo to secure sufficient green methanol for its new building methanol-fuelled container ships.
Read more: Lloyd’s List
Lack of regulations a core challenge to shipping decarbonization: WSC
The World Shipping Council (WSC) said a regulatory structure underpinning the development and production of zero-carbon fuels remains a crucial missing part in the global campaign to decarbonize the maritime industry. WSC also said renewable and low-carbon fuels should be phased in so that the pace of production could meet needs.