Container shipping spot rates still falling: What will be the new normal?

(American Shipper)

 

FBX Asia-West Coast rates down 65% vs. peak but 5 times higher vs. pre-COVID. Rates are normalizing but still very high Rates are normalizing off historic highs.

 

Which of these two is happier? Someone who wins $3 million in the lottery then blows $2 million in Vegas, or someone who wins $1 million in the lottery and puts it in the bank?

 

Containerized cargo shippers face the reverse emotional scenario. Who’s less upset if spot rates quintuple? A shipper who’s used to paying $1,500 per forty-foot equivalent unit and suddenly sees rates jump to $7,500? Or one who pays $1,500 per FEU for years, gets slammed with crippling rates of $20,000 per FEU including premium charges, then gets “relief” as rates slide all the way back down to $7,500?

 

No one believed $20,000-per-FEU spot rates in fall 2021 were sustainable. If rates stayed that stratospheric for too long, it would destroy transport demand and compel competition regulators to step in. As Hapag-Lloyd CEO Rolf Habben Jansen said during a conference call in November, “It would be better for everybody if we saw more normalization.”

 

That process is now underway. But what will be the new normal?

 

The best-case scenario for shipping lines is for the COVID rate surge to have emotionally and financially acclimated customers to higher freight costs, and for rates to stabilize at levels high enough to generate strong and sustainable profits for ocean carriers, but not so high that competition authorities intervene. For shippers, this new normal for rates would be much higher than pre-COVID levels but might seem like a bargain compared to all-time peaks.

 

Drewry spot rate indexes

Drewry’s weekly assessment for Shanghai-to-Los Angeles spot rates came in at $7,480 per FEU on Thursday. That’s down 23% year on year and down 1% week on week. This assessment is now 40% below its peak of $12,424 per FEU in late November 2021, yet still 5.3 times higher than rates at this time of year in 2019.

 

Drewry’s weekly spot assessment for Shanghai-to-New York was at $10,164 per FEU, flat week on week, down 14% year on year, down 37% from the peak of $16,183 per FEU in mid-September — but still quadruple 2019 levels.

 

Weekly spot rate assessment in $ per FEU. Blue line: Shanghai to LA. Green line: Shanghai to NY. Chart: FreightWaves SONAR

On one hand, a sharp drop in rates over the past nine months is reducing costs for shippers (at least, compared to last fall) and is showing that the market is functioning: Ocean carriers are competing on price to fill slots. On the other hand, rates are still very profitable to ocean carriers and transport costs for shippers are still dramatically higher than they were pre-COVID.

 

Freightos spot rate indexes

Different indexes show different numbers but the same trends.

 

The Freightos Baltic Daily Index (FBX) China/East Asia-to-North America West Coast assessment was at $7,264 per FEU on Thursday, down 65% from the all-time high of $20,586 per FEU in September but still five times more than rates at this time of year in 2019.

 

The FBX China/East Asia-to-North America East Coast rate was $10,020 on Thursday, less than half its all-time high of $22,234 per FEU in September but more than triple pre-COVID levels.

 

Daily spot rate assessment in $ per FEU. Blue line: China/East Asia to North America West Coast. Green line: China/East Asia to North America East Coast. Chart: FreightWaves SONAR

The drop from the peak is much steeper for the Freightos trans-Pacific indexes than for Drewry and other index providers because Freightos began including premium charges in its assessment methodology starting July 28, 2021.

 

Space has now opened up and shippers are generally no longer paying premiums.

 

Dafna Farkas, corporate marketing associate at Freightos, told American Shipper: “In the peak of the COVID surge, we ensured that the all-in rates were reflected by including premiums. We continue to ensure that all-in rates are reflected in the index and in that [regard], have not changed the methodology. On a price-point level, since premiums have largely been eradicated due to industry normalization, they aren’t really reflected in the industry price.”

 

Market in ‘wait-and-see mode’

S&P Global Commodities (formerly Platts) assessed North Asia-to-North America West Coast Freight All Kinds (FAK) rates at $7,100 per day on Thursday. That’s down 25% from the peak but still 4.3 times 2019 levels.

 

S&P Global put North Asia-to-North America East Coast FAK rates at $9,700 per day, down 19% from the all-time high albeit 3.5 times mid-July 2019 levels. 

 

The container shipping team at S&P Global has been reporting lower-than-expected Asia-U.S. demand ever since the end of the Chinese New Year holiday in February.

 

Downward spot-rate pressure continues, S&P Global said this week, given ample space availability out of China and smaller carriers with chartered tonnage undercutting freight pricing of larger mainline carriers (in other words: competition). Some North Asia-to-West Coast spot offers were below $7,000 per FEU, it reported.

 

George Griffiths, managing editor of global container freight at S&P Global Commodity Insights, told American Shipper: “The market is just in wait-and-see mode at the moment. There are rumors of more lockdowns in Shanghai coming up, and some concerns that delays across the U.S. East Coast will begin to spread to the West Coast once more, but nothing concrete.

 

“High inventory levels and the rising cost of living are keeping a natural lid on demand at this point. So, the atmosphere is rather bearish, only being helped by the void [canceled] sailings that carriers are bringing in to try and protect rates.”

 

 

Gloomy outlook for container freight market as rates continue to fall

(The Load Star)

Monday, 25 July 2022

 

A deteriorating picture of the container freight market outlook is painted by the Maritime Strategies International’s (MSI) July Horizon report.

 

The analysts say they continue to expect container markets to “run out of steam” in the third quarter, with “a sharper drop-off in Q4 as the unwinding supply chain disruptions and cooling consumer demand drive the decline in freight and time charter rates”.

 

Although it expects freight and charter rates “will remain elevated by historical standards”, MSI said there could be further erosion.

 

“The downtrend will continue through to 2023, when we expect the market environment to return closer to pre-pandemic levels,” said MSI. “Expectations for further trade growth have been tempered by macroeconomic uncertainties.”

 

Noting that spot rates had been on a downward spiral since the beginning of the year, MSI sees no reason for that trend to be reversed.

 

“Despite container markets heading into peak season, it now appears the downward pressure of lockdowns in China and relentless hikes in global inflation levels have taken a heavy toll on demand for cargo space,” said MSI.

 

It referred to anecdotal evidence of “bloated warehouses” and “overstocked retail inventories”.

 

The Loadstar has seen several requests from forwarders seeking storage for large quantities of cargo expected to arrive in the UK during August. when distribution centres and retailers’ warehouses are said to be “full”.

 

The report says falling rates on the main tradelanes had “driven liners to enact blank sailings to cut back on effective capacity and keep rates buoyant”.

 

It said “persistent supply chain bottlenecks” had “roiled vessel schedules and container box fluidity”.

 

“Inland disruptions have proven to be the largest bottlenecks in slowing down the processing of containers at ports,” said MSI, adding that the disruptions were “kicking the can down the road by masking a more deleterious impact on freight rates”.

 

Nevertheless, the impact of weak demand and falling freight rates is yet to be felt in the containership charter market.

 

“Time charter markets remained in healthy territory in recent weeks as the continued dearth of tonnage limited charterers’ bargaining power,” said MSI.

 

However, there is always a lag between freight rates and containership charter hire rates, as was the case during the consumer demand surge in the midst of the pandemic, when charter rates were slow to catch up, partly due to existing time charter periods.

 

MSI’s outlook for vessel earnings predicts a significant fall in daily hire rates for all sizes by Q1 23, with, for example, the rate for a typical 8,500 teu vessels plunging 50% from the peak earlier this year, to $80,000 a day.

 

Shipowners have, in general, held out for charter parties with a duration of two years or more, so they will initially be insulated from the fall in daily hire rates.

 

And, according to the MSI analysts, contagion will spread to asset values, with the same size vessel seeing its second-hand value tumbling by half during the same period, to around $75m. The prediction of falling asset values could put a brake on further second-hand purchase deals in the S&P pipeline.

 

Meanwhile, as the market returns to some form of normalcy, there are already rumours beginning to circulate of some newbuild orders being postponed or cancelled.

 

 

Risks ahead for shipping markets

(Seatrade Global)

Tuesday, 26 July 2022

 

Risks to shipping markets were in focus as analysts from Maritime Strategies International (MSI) shared their opinions and outlook on the dry bulk, container, oil and newbuilding sectors.

 

Will Fray, Director – MSI, told a China Shipping Outlook 2022 webinar, that the dry bulk sector showed a stronger performance than expected at the start of the Covid outbreak, particularly for smaller handysize vessels, however, the near-term outlook has weakened sharply as the trade volumes under pressure for many quarters. These include the impact of global economic slowdown, government or large investment projects that are on hold whilst commodity prices and supply chain issues remain, the Chinese property market is still struggling and the Russia/Ukraine war is also limiting cargoes.

 

As a result Fray said a recovery in 2023 is now at risk. The demand outlook is weak, implying that a negative impact of the easing of covid-related inefficiencies more than offset the positive impact of increased inefficiencies driven by environmental regulations, Fray continued. An improvement in market balances relies on scrapping in 2023/2024.

 

signals-dry-bulk-amid-turbulent-geopolitics">Mixed signals for dry bulk amid turbulent geopolitics

 

Looking at the oil tanker market, the available fleet is growing by significantly more than actual capacity owing to reversal of floating storage, capacity growth is decelerating and will become negative over the forecast.

 

The tanker scrapping has ramped up in 2022, but volumes remain slow on larger tonnage, particularly VLCCs, explained Tim Smith, Director of MSI. Forecast newbuilding deliveries have been lowered due to a drop in contracting.

 

Although the container market remains very strong, there have been signs of weakness, said Daniel Richards, Associate Director MSI. Trade growth has slowed due to disruption to manufacturing in China caused by Covid-19 and there is pressure on consumer incomes. However, container volumes are still high, and congestion is a major issue as well.

 

The containership orderbook is now very large, and Daniel suggested stopping ordering containerships as the market is facing risks due to the massive orderbook.

 

Trade outlook is weak in 2022-2023, the industry is expected to back to “normal” by mid-2023. After mid-2023, vessel speed will become more important if the fleet slows down to meet environmental regulations, which would partly offset high vessel deliveries, Daniel added.

 

Another big challenge facing the newbuilding market that is the environmental timelines continues to accelerate, with an increasing focus on GHG emission regulations. The majority ships will need to comply with regulations with EEXI and CII will come into force shortly, said Jianjun Wang Regional Director, Asia for MSI.

 

 

Persian Gulf bright spot in CCFI in June

(alpha Liner)

Issue-30/2022

Persian Gulf/Red Sea services out of China were again the bright spot in the China Containerized Freight Index (CCFI) last month, helping push the overall index up in June despite the pressure on spot rates as demand eases.

 

The CCFI rose 3.5% in June compared to the previous month, reaching an average of 3,228.

 

The surge was driven by a 16.9% gain in rates on the China-Persian Gulf/Red Sea route. The trade was also a major factor in increases in the month of May.

 

China-East Coast America and China-West Coast America rates also rose in June, by 8.4% and 6.5% respectively, although both have since fallen back and July appears to be on track for an overall drop.

 

 

Latest fixtures point to continued rate firmness

(Alpha Liner)

Issue-30/2022

 

 

The container charter market continues to see very little activity, due to a persistent shortage of prompt ships, while the summer holidays in the northern hemisphere are slowing the pace of business.

 

However, the few fixtures agreed continue to be concluded at historically high rates.

 

Some carriers appear undeterred by the weaker sentiment in global container markets and remain keen to fix forward tonnage on long term charters at strong rates.

 

Illustrating this, CMA CGM and ONE reportedly fixed vessels of 4,300 teu and 6,500 teu for periods of 60 months and 36 months respectively at charter rates that hardly show any weakening compared to similar deals agreed a couple of months ago. This is quite remarkable as these fixtures will come into effect only from 2023 for some of the ships fixed.

 

The robust market for large tonnage seems to however contrast somewhat with the market for smaller and medium-sized ships (1,500-2,800 teu), which have seen a slight rate softening in the

past two weeks.

 

This bearish trend could be temporary though, considering the ongoing shortage of vessels in these sizes.

 

Only the 1,500-1,900 teu segment could feel a little more pressure in the coming weeks, with a higher number of ships expected to come up for employment in August & September.

 

Globally though, the short-term market outlook remains bright for vessel owners, with a continued shortage of ships supporting high charter rates.

 

The longer term remains however uncertain, with a question mark on how far down demand will go.

 

A weaker cargo demand will probably not hugely impact the charter market this year and early next, given the persistent dearth of ships.

 

However, the avalanche of newbuildings expected from 2023, whose impact will start being felt from the second half of the year, will be a serious challenge to deal with in case of subdued demand and insufficient scrapping.

 

 

SM Line chief eyes IPO revival by 2024 – but no ambitions to acquire HMM

(The Load Star)

Tuesday, 26 July 2022

 

Flush with cash, South Korean liner operator SM Line has decided it would be more fruitful to invest its excess funds in its larger compatriot rival, HMM, than to leave the money in the bank to earn meagre interest.

 

Yesterday, SM Line CEO Park Kee-hoon said: “We recorded an operating profit of KRW1.82trn ($1.53bn) last year and more than KRW750bn ($581.85m) in the first half of this year, which is a situation where we have a lot of cash. The board decided to invest a certain part because even if we put the cash in the bank, the interest earned is less than 1%.”

 

Mr Park refuted speculation that SM Line would eventually acquire HMM, which is controlled by the South Korean government through Korea Development Bank, Korea Ocean Business Corp and Korea Credit Guarantee Fund.

 

He said: “HMM’s market capitalisation is over KRW12trn ($9.18bn) and the size of the convertible bonds held by KDB and KOBC is large. The size of SM Group’s assets is expected to be KRW18trn ($13.77bn) at the end of this year, which means that the group can only acquire one company.”

 

With the state having a substantial stake in HMM, Mr Park argued that it would not be easy to bid for HMM unless the SM group raised more funds, and even then, any potential bidder for HMM would have to be assessed by the government.

 

Mr Park said SM Line chose to invest in HMM as the company saw potential for greater earnings. HMM’s Q1 22 operating profit was the second highest in South Korea, just behind Samsung, the country’s largest electronics manufacturer. After a series of share purchases, SM Line now holds a 6.29% stake in HMM.

 

Mr Park is a former HMM employee, having joined South Korea’s flagship carrier in 1991 and heading its European operations before moving to SM Line, formed in 2016, after the group acquired the remaining portfolio of bankrupt Hanjin Shipping.

 

SM Line suspended its planned listing on the Korea Exchange in November and Mr Park explained that demand forecasts showed it was not easy to appraise the company’s value. However, the company will review the IPO by 2024.

 

Meanwhile, a spokesperson for HMM confirmed to The Loadstar that it was behind orders for three 1,800 teu boxships commissioned at Hyundai Mipo Dockyard this month. Costing some $107m, the ships are expected to be delivered by September 2024.

 

The spokesperson said the newbuilding order was in line with HMM CEO Kim Kyung-bae’s $11.3bn investment plan to expand the company’s fleet and other fixed assets.

 

 

China United Lines offers Jebel Ali – Karachi shuttle

(Alpha Liner)

Issue-30/2022

 

Fast growing Chinese carrier, China United Lines (CULines) in mid-May started offering a weekly shuttle between the hub port of Jebel Ali in the United Arab Emirates and Karachi in Pakistan.

 

CULines offers this service through slots on sections of COSCO's and X-Press Feeders' joint 'Karachi Gwadar Sharjah Express'. The two partners launched this service back in March 2018.

 

All three carriers market this loop as the 'KGS'. Numerous other shipping lines, including CMA CGM, APL, Maersk and Transmar, also have slot allocations on this service.

 

The ‘KGS’ port rotation covers Jebel Ali, Port Qasim, Karachi, Gwadar (fortnightly calls), Sharjah, Khalifa Port (Abu Dhabi), Jebel Ali. The loop turns in two weeks with two ships, including the COSCO operated 1,850 teu TEERA BHUM and the 1,724 teu DIYALA of Xpress Feeders.

 

China United Lines started its slots participation, which is limited to Jebel Ali, Karachi, Jebel Ali, on 18 May, when TEERA BHUM departed from Jebel Ali.

 

 

Emirates launches own intra-Gulf feeder

(Alpha Liner)

Issue-30/2022

The Dubai-registered and Hong Kong headquartered regional carrier Emirates Shipping Lines (ESL) will in mid-August launch its own intra- Gulf weekly feeder service linking Jebel Ali in the United Arab Emirates with Bahrain and Shuwaikh in Kuwait.

 

Aptly marketed as ‘Jebel Ali - Bahrain - Shuwakih service' ('JBS'), the new loop will start with the sailing of the Emirates-operated 1,678 teu ESL VICTORIA from Jebel Ali on 16 August.

 

However, this vessel is only scheduled to complete one round voyage.

 

Thereafter, the 1,336 teu EMIRATES ZANZIBAR will join the service on 23 August.

 

The new 'JBS' feeder is part of Emirates' wider expansion in the ‘India / Pakisan – Gulf / Red Sea’ trade effective next month. As Alphaliner reported last week, ESL will also introduce four other loops in the abovementioned region, which are provided through a series of slots arrangements with other regional carriers.

 

These four upcoming loops include the ‘Pakistan Gulf service’ ('PAG' – slots on Wan Hai / Global Feeder shipping (GFS) ‘PSX / KFS’ service), the ‘India Oman Gulf service’ ('IOG' - slots on GFS / X-Press Feeders ‘NMG’ service), the ‘India Gulf Express’ ('IGX' – slots on Feedertech / GFS / X-Press Feeders ‘ASX’ service) and the ‘Gulf Saudi Arabia’ ('GSE' – slots on GFS ‘JJS’ service).

 

 

Feedertech to link Middle East/Red Sea to East Africa

(Alpha Liner)

Issue-30/2022

Starting at the end of this month, Feedertech will expand its service etwork by adding the Kenyan port of Mombasa, a key East African gateway, to its ‘Gulf - Western India - Mozambique’ service.

 

In addition to this, the intra-Asia affiliate of Unifeeder will also begin to deploy tonnage between Saudi Arabia, the Indian west coast and Kenya.

 

Feedertech’s ‘Mozambique’ service was launched as recently as May and the service launch market the carrier’s entry into the African trades. The additional Mombasa calls will start with the 28 July sailing of the container vessel OCEANA from Jebel Ali.

 

Despite the addition of the extra port call, the ‘Mozambique’ loop will continue to turn in 28 days with the two 1,714 teu ships, OCEANA and ORNELLA. These vessels will henceforth serve Jebel Ali, Mundra, Mombasa, Maputo, Jebel Ali on a fortnightly basis.

 

So far, Ocean Network Express (ONE) and Hapag-Lloyd, current slots participants on the 'Mozambique' service, do not advertise the Mombasa call.

 

Further to its East Africa coverage with the ‘Mozambique’ service, Feedertech will soon deploy ELREEDY STAR on a rotation that connects Jeddah to Mundra and Mombasa.

 

This 1,301 teu vessel is currently ending an assignment on the operator's 'Jeddah - Port Sudan' shuttle. The ship will depart Jeddah for East Africa on 28 July.

 

A round voyage on this route will take at least three weeks, but Feedertech so far only advertises this one ship. It remains to be seen whether the triangular connection between Saudi Arabia, India and Kenya will be developed into a more regular service in the future.

 

 

Far Shipping offers Straits-Bangladesh feeder

(Alpha Liner)

Issue-30/2022

Singapore based feeder operator Far Shipping Lines (FSL) this month started a fortnightly shuttle between Singapore, Port Kelang (Westport) in Malaysia and Chittagong in Bangladesh.

 

This new Chittagong feeder started on 1 July, when the FSL-operated, 1,746 teu KAPITAN MASLOV sailed from Singapore. As of now, the operator only deploys a single ship on this route offering sailings once every two weeks.

 

Far Shipping was established in 2002 and specializes in common feeder services connecting the Eastern coast of India and Bangladesh with the hub ports of Colombo, Port Kelang and Singapore. FSL currently operates a fleet of five ships of 370 – 1,700 teu.

 

 

TSL reshuffles Japan - China - Taiwan - Thailand loops

(Alpha Liner)

Issue-30/2022

TS Lines is to once more combine two of its services, the Japan – South China – Taiwan ‘JHTN’ loop and the South China – Thailand ‘JHTS’ loop, into a single service. The reinstated ‘JHT’ will encompass the port rotations of both loops.

 

The current two-loop setup was the result of a split of the previous ‘JHT’ service which took place back in November 2021 as part of TS Lines' wider Japan - Southeast Asia network revamp.

The ‘JHTN’, which will be suspended soon, serves Osaka, Kobe, Yokohama, Tokyo, Keelung, Taichung, Kaohsiung, Hong Kong, Nansha, Chiwan, Osaka. The loop turns in two weeks and the 1,096 teu CONTSHIP UNO will perfom the final 'JHTN' sailing from Osaka on 21 July.

 

The soon-to-end ‘JHTS’ meanwhile covers Nansha, Hong Kong, Shekou, Laem Chabang, Bangkok, Laem Chabang, Nansha. This service also requires a two-week turnaround time. The TSL-operated 1,043 teu OKEE PEARL is expected to discharge the last cargoes of this loop at Nansha at the end of the July.

 

TS Lines will kick-off its reinstated ‘JHT’ on 27 July when the 1,096 teu EPONYMA sails from Osaka. This service will retain its previous rotation from 2021 which calls at Osaka, Kobe, Nagoya, Yokohama, Tokyo, Keelung, Taichung, Kaohsiung, Nansha, Hong Kong, Shekou (Shenzhen), Laem Chabang, Bangkok, Laem Chabang, Hong Kong, Shekou, Osaka.

 

So far, TSL has only nominated two out of the four ships needed to offer weekly sailings on the ‘JHT’ service. These include the 1,096 teu EPONYMA and the 1,118 teu CONTHIP UNO.

 

 

Iran facilitates new shipping routes from Russia to India

(Slash 247)

Wednesday, 20 July 2022

 

With the leaders of Russia, Iran and Turkey meeting in Tehran this week, new shipping routes have been under discussion.

 

Iran’s state-run Islamic Republic of Iran Shipping Line (IRISL) has moved to extend its network by facilitating the transport of Russian goods to India via the International North-South Transport Corridor (INSTC), a land-sea corridor passing through a dozen countries to bypass Western sanctions against Russia.

 

The corridor has reportedly entered the operational phase after completing a trial phase in June when containers of wood laminate sheets departed from St. Petersburg toward Nhava Sheva Port in India.

 

The cargo arrived in India earlier this month after traveling from Astrakhan Port in southern Russia to the Iranian ports of Anzali on the Caspian Sea and Bandar Abbas on the Persian Gulf.

 

The establishment of INSTC, the multi-modal network of ships, rail, and roads for moving freight between Eastern Europe and South Asia, was first introduced in September 2000. Due to geopolitical obstacles, interest in the route waned over time, but it has been reintroduced following the conflict in Ukraine.

 

IRISL is said to have assigned 300 containers to transport goods between Russia and India, and if the demand increases, the number of these containers will increase continuously.

On Tuesday, Russian President Vladimir Putin met with the leaders of Iran and Turkey in Tehran to strengthen ties and show the West that Moscow is not alone on the world stage.

 

Meanwhile, the Turkish liner Medkon Lines has started advertising a new service connecting Turkey with the Russian Black Sea port of Novorossiysk with a 707 teu vessel from August. Until late February, Medkon linked Turkey and Ukraine.

 

Earlier this year, Russian forwarders also launched their own liner services linking their domestic ports to China and India as most global liners drastically reduced their operations in the country since the invasion of Ukraine. Specifically for India, Modul has set up a container service linking the Big Port of St Petersburg and India’s Nhava Sheva. The service is operated by an unnamed 1,094 teu vessel, with a delivery time of 25 days.

 

 

Chittagong: Launch of Patenga Terminal delayed again

(Alpha Liner)

Issue-30/2022

 

Bangladesh’s Chittagong Port Authority (CPA) has delayed planned test calls at the new Patenga Container Terminal.

 

Starting from 21 July, the new facility was supposed to receive a number of test calls from bulk ships before the first container vessels would then call at the pier in September.

 

According to the CPA, load tests on various elements of the new pier, such as bollards, could not yet be carried out. Prompting the port landlord to defer the start of trial operations at Patenga.

 

The CPA still plans to operate the new pier itself for an interim period.

 

This will be the case until the Government awards a concession to a private-sector firm. Maersk Group’s APMT, the Dubai-based DP World, Singapore’s PSA, Adani Ports of India, and Red Sea Gateway Terminal from Saudi Arabia are said to be in the running for the lease.

 

Later this year, Patenga is expected to start out as an unequipped container pier that will only handle geared ships. As soon as an operator is found, the facility will likely be fitted with ship-to-shore container cranes. It is not unusual for Chittagong that cargo piers start out ‘naked’, only to be fitted with all kinds of handling gear over time.

 

Vessel sizes at Chittagong are generally restricted to a max length of 190 m and a shallow draft of no more than 9.50 m. This has given rise to an entire class of (usually geared) compact 2,700 teu container ships built specifically to max-out the port’s capabilities.

 

Reportedly, the new Patenga Container Terminal, which is located a little further downstream from Chittagong’s other cargo berth, will allow slightly bigger ships of up to 200 m and with drafts of 10.50 m.

 

Earlier this year, the existing container facilities at Bangladesh’s main port got a major upgrade when ZPMC delivered two batches of mid-sized ship-to-shore container cranes.

 

The Patenga Container Terminal will offer a berth length of 600 m and it will add some 0.50 Mteu of capacity to the port per year. Its USD 240 M cost was funded by the Chittagong Port Authority, with the Bangladesh Army involved in the construction.

 

 

Global boxport congestion sets fresh record highs

(Splash 247)

Monday, 25 July 2022

 

Boxport congestion is setting new record highs, quashing talk of any imminent return to supply chain normalisation.

 

The containership port congestion index created by UK broker Clarksons hit a new record on July 14, whereby 37.8% of the boxship fleet capacity was at port. This exceeds the previous peak level recorded in late October 2021, and stands well above the pre-covid average of 31.5% recorded between 2016 and 2019.

 

37.8% of boxship fleet capacity is at port.

 

“There is still no fix to non-ocean bottlenecks which are big drivers of supply and demand, and not in a good way for shippers,” the latest weekly report from Danish container advisory Sea-Intelligence warned, going on to list the 70,000 truckers who have just gone on strike in California and the tens of thousands of containers clogging the US west coast ports waiting for rail to destinations, because there are not enough engineers. There are nearly 30,000 rail containers delayed on the port of Los Angeles docks alone, with rail-bound cargo sitting for an average of 7.5 days. Over on the east coast, meanwhile, congestion levels, brewing for the last two months, are closing in on record levels.

In Europe, Hamburg and Bremerhaven are “paralysed” by port worker strikes, Sea-Intelligence stated. MarineTraffic data shows there are nearly 200,000 teu waiting for berths to open up in Hamburg. News of industrial action around Europe continues to filter in, the latest being three rail strikes planned across the UK over the coming month,

 

Meanwhile, in Asia monsoon and typhoon season is back and lockdowns in China are ongoing.

 

All up, the approximate total value of trade stuck on the water is estimated at $30bn according to data from MDS Transmodal.

 

Kuehne + Nagel has developed what it terms as a Global Disruption Indicator, which tallies the cumulative teu waiting time in days based on container vessel capacity in 12 hot spot ports around the world.

 

The teu waiting days (twd) indicator works whereby, for example, one vessel with a 10,000 teu capacity waiting 12 days equals 120,000 twd. Today the indicator sits at 9.8m twd with officials from Kuehne + Nagel explaining supply chains will only get back to normal when that figure gets below 1m twd.

 

 

Global Feeder Shipping adds to fleet with panamax acquisition

(Splash 247)

Monday, 18 July 2022

Dubai-based feeder boxship operator Global Feeder Shipping (GFS) has added to its fleet with the acquisition of 2008-built 3,534 teu boxship Guenther Schulte.

 

The vessel, acquired from Germany’s Schulte Group, has been renamed GFS Precious and is set to sail on the company’s Jebel Ali – Jeddah service.

 

According to VesselsValue, GFS paid $55m for the vessel which is slightly more than the online portal’s valuation of $52.61m.

 

GFS currently lists a fleet of 22 ships on its website. The company took over the liner operations of Dubai-based Simatech in 2018, and mainly provides services in the Middle East Gulf and between the Middle East and the Indian sub-continent.