Maersk and MSC to discontinue 2M alliance in 2025
Maersk and Mediterranean Shipping Co are to close their 2M alliance vessel-sharing agreement when the arrangement expires in 2025.
In recent years, there has been speculation that the alliance was coming under pressure as the world’s two largest container lines’ strategies diverged. Maersk has focused itself on becoming an “integrated provider of container logistics”, while MSC has overtaken Maersk in terms of pure ocean capacity, dramatically building up its fleet over the past few years.
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A capacity cut of Asia-Europe trade in January was unsuccessful
Carriers deployed 1.9 million TEU of capacity on the Asia-Europe trade in January despite weak demand from European importers and Chinese factory production affected by widespread COVID-19 infections ahead of the Lunar New Year holidays. However, according to Sea-Intelligence, carriers’ blank sailings appear insufficient to stem the decline since the demand began to collapse in September 2022.
Major carriers plan to cancel more than a quarter of their scheduled Asia-Europe sailings in the first seven weeks of the year as they seek to match capacity with weaker demand. But carrier hopes that a reduction in capacity to meet demand better would help stall rate erosion have been dashed.
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Transit times improve as supply chain congestion fades
Data from freight visibility provider e2open shows that in the last quarter of 2022, the time between booking a cargo and that cargo being released at the gate of the destination port fell significantly from the previous quarter. However, while shippers will welcome the changes, e2open warned that there were still hurdles ahead. “As we head into the new year with a backdrop of an unpredictable global economy, the resurgence of Covid-19, escalating political tensions, and an ongoing war, supply chain leaders are wondering what the next supply chain challenge might be,” it said.
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Shipping lines’ investment in startups
Ocean carrier Zim Integrated Shipping Services is among the investors in an Israel-based cross-border trade finance startup that raised $11 million in venture capital this week. The company, 40Seas, aims to help small and medium-sized businesses (SMBs) access digital finance solutions, including online payments and extended payment terms, that they would ordinarily struggle to secure from traditional banks.
Maersk’s investment arm, Maersk Growth, has provided growth capital for German green methanol start-up C1 in its latest move to secure alternative fuel supply. The funding will enable the mass production of green methanol without the usual premium paid for it.
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Topics of Ports in the US, China, North Europe, and the Mediterranean
US container import figures will likely remain below 2m teu a month, at least for the first quarter, as the pandemic-driven volume surge finally eases. US ports covered by Global Port Tracker handled 1.78m teu in November, the latest month for which final numbers are available. That was down 11.3% from October and 15.8% from November 2021. The key US west coast ports of Los Angeles and Long Beach saw container volumes fall back from their previous record highs in 2022 as the peak demand levels of the pandemic began to unwind.
The Port of Shanghai has struggled to maintain container throughput growth amid the disruption caused by a city-wide lockdown and China’s heavy-handed zero-Covid policy. Container handling volume at the port was 47.3m teu in 2022, with 0.6% year-on-year growth, Shanghai International Port Group said in a preliminary earnings report.
Containerized import volume at Haropa Port – led by the French hub of Le Havre – remained flat through 2022 at 3.1 million TEU. But the expanded inland waterway to Paris saw a 25 percent increase in box traffic. The 2021 merger of Le Havre, Rouen ports, and the river terminal in Paris into Haropa Port created a multimodal corridor into France’s main consumer catchment area around Paris.
Le Havre call sizes in the first ten months of the year were up 8 percent and call sizes at Antwerp, Rotterdam, and Hamburg were up around 9 percent in 2022 for the ten months through October compared with the same period in 2021, according to the benchmark Port Performance Program. In Europe, the number of calls is reduced, but the call sizes are bigger. On the other hand, Tanger Med reported a 6% increase in volume to 5.6 m teu and a 32% increase in the total number of calling ships, of which 961 were “mega-ships.”
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Retailers forecast double-digit US import declines to accelerate through spring
US imports in February will fall to their lowest in almost three years, a major retailers group projected on 9 January. However, consumer spending remained strong through the holiday season and is expected to rise as inflation eases. The National Retail Federation (NRF) forecasts that imports in February will total 1.63 million TEU, the lowest since 1.61 million TEU in June 2020 and a decline of 23 percent from February 2021. Retailers now forecast double-digit year-over-year declines in US imports for each month through May.
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Inflation and recession fears affect outlook for container shipping
Inflation and fears of a recession are the factors most concerning supply chain leaders surveyed for a new report from container logistics platform Container xChange. “The overall outlook for 2023 remains gloomy,” said Container xChange chief executive Christian Roeloffs. “Europe is hit hard with all-time high inflation; China struggles to cope with the virus, and the US continues to witness hinterland transportation challenges and labor unrest. Most of these challenges will stay in 2023. Consumer confidence will pick up, but it depends on whether we witness more disruption.”
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China keeps grip on global production, but search for options continues
The risk of overreliance on China sourcing has been thrown into sharp relief during three years of COVID-19 lockdowns. But there is no way around the country’s importance as a global manufacturing center, stakeholders say. Rather than driving a wholescale shift to alternative sourcing destinations, the disruptions have added urgency to the “China-plus-one” strategies being pursued by most global companies. The supply chain disruptions caused by China’s series of lockdowns have left importers searching for more resilience and flexibility in their Chinese supply chains rather than racing for the exits.
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Topics on decarbonization in the EU and the US
The European Union is facing a call for more ambitious FuelEU Maritime regulations, which aim to promote fuel substitution and the shift to greener and lower-carbon fuels. Danish Shipping, DFDS, Global Alliance Powerfuels, and the Methanol Institute are among more than 40 associations and maritime technology suppliers that have written to the EU. They seek to “encourage the co-legislators to fully seize the opportunity to make EU a global leader in green shipping and to promote the uptake of green, sustainable e-fuels,” according to Danish Shipping.
The US has released its first decarbonization strategy for the transportation sector. The joint effort’s goal is to achieve an 80%-100% reduction in the transportation sector’s greenhouse gas emissions by 2050. The sector is the largest source of GHG emissions in the US, accounting for one-third of all emissions. According to the report, shipping comprises 3% of all transportation emissions in the US.
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An ocean freight visibility provider lands investment from venture capital
Ocean freight visibility provider Terminal49 is the latest software company aiming to improve container data to land a funding round from venture capital firms, with a $6.5 million infusion announced on 19 January. San Francisco-based Terminal49, founded in 2015, provides software to aggregate container milestones from ocean carriers and container terminals for shippers, forwarders, and complementary software providers. The company said the funding would be used, in part, to push into Europe and also be directed toward automating.
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