Ports group seeks to close gap in investment
According to the International Association of Ports and Harbors’ report, the supply chain disruption that emerged with the pandemic has shown up a series of weaknesses in the port sector that have been driven by long-term underinvestment in the sector. The report identified the principal gaps in port and port-related infrastructure in terms of efficiency, connectivity and accessibility, digitalization, decarbonization, shipping costs, and regulatory environment.
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Port of New York and New Jersey is the busiest in the US
The Port of NY & NJ reports a monthly record of 843,101 teu in August, up 8% from last year. It surpassed the Ports of Los Angeles and Long Beach, traditionally larger west coast peers. Diversions from US west coast ports that began earlier this year have increased due to congestion and uncertainty over the expired west coast labor contract. According to port director Bethann Rooney, about 70% of this year’s growth at NY & NJ is cargo diverted from the west coast.
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Outlook for container shipping
Shippers have struggled to pay high rates for poor service, and even then not sure that shipping lines would carry their cargo. With demand and rates falling, however, the tables are turning. The sharp fall in container spot freight rates, which are now in many cases lower than contracted rates, a fall in demand, and the looming threat of overcapacity in the market are changing the dynamic that has dominated the relationship between carriers and shippers throughout the pandemic.
Concerns over China’s economic prospects are mounting, with bigger risks lurking beneath the slowdown. Shipping that relies on this vast market on many fronts should take note. Draconian lockdowns and an ailing property market are the biggest factors weighing on the country’s economy.
The impact of congestion on containership availability is improving rapidly, with capacity now halfway back to its normal state. At its worst, congestion tied up over 10% of available boxship capacity. Half of that has now been released back to the market, indicating that the situation will normalize by the first quarter of next year.
As night follows day, container lines overorder during the good times and repent on the downturn. With 7m teu heading towards the market and growth declining, carriers will need to find ways of absorbing excess capacity.
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Hapag-Lloyd makes $1 billion Latin American terminal takeover
Hapag-Lloyd has acquired the terminal and logistics business of Latin American port operator SAAM for $1 billion as the cash-rich carrier continues to expand its global container terminal footprint dramatically. Maersk and CMA CGM aggressively pursue integrated container logistics strategies, making huge, targeted investments to plug holes in their end-to-end services. On the other hand, Hapag-Lloyd has remained true to its core ocean transport business while prioritizing investment in terminals over other options.
Read more: JOC
Topics on decarbonization
Maritime groups in the European Union have called for the billions of dollars to be collected from the shipping sector once included in the bloc’s emissions trading scheme to be diverted to pay for sector-specific decarbonization projects.
Legal analysis has argued that the UK’s proposal to only include domestic shipping in expanding its Emissions Trading Scheme will see it breaching its climate obligations. However, it is understood that the UK decided not to include international shipping emissions at this stage because the International Maritime Organization regulates these.
Study shows that new buildings of dual-fuel boxship can provide a viable roadmap if precautions are taken. Building containerships that can use today’s and future fuels requires complex choices. Early planning can help reduce total lifetime costs.
Maersk has ordered another six green methanol-powered megaships, taking its tally of dual-fuel vessels on order to 19 as the carrier extends its commitment to one of the potential zero-carbon fuels of the future.
Many of the large container carriers are progressing on a path toward decarbonization. The challenge arises when it comes time to measure whether a specific shipment is carbon neutral or not at a TEU level.
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GSBN tests digital process to share shipping data with banks
Hapag-Lloyd, the Bank of China, and a Hong Kong-based shipper conducted a test of a digital process that would give banks access to shipping data to make trade finance decisions. The test was facilitated by the Global Shipping Business Network (GSBN), a non-profit consortium founded by container lines and global terminal operators to build digital infrastructure between the shipping industry and financial institutions. The tested process on GSBN’s Data Sharing Management Application was intended to show that the consortium’s blockchain-backed infrastructure can expedite the process of shippers giving container lines consent to share their data with banks.
Read more: JOC