World Maritime News
September 30, 2021
Regulators’ close watch on supply chain crisis and rate freezes implemented by shipping lines
European, US, and Chinese regulatory authorities attended the virtual meeting to address the global supply chain crisis. In a joint statement following the meeting, they focused on sectoral developments since the start of the pandemic, including an analysis of supply and demand and identification of bottlenecks in the ocean-linked supply chain and the cause of service disruptions. They also looked at actions undertaken so far by relevant jurisdictions and authorities in response and their results, and then the way forward and possible measures to increase resilience and smooth operations in the sector.
After the meeting, CMA CGM and Hapag-Lloyd announced a rate freeze, but others would not follow.
According to shipper groups, European regulators will find it increasingly hard to ignore complain from shippers that supply chain delays and record prices are hurting their business.
Outlook for container shipping market and congestion at LA/LB ports
The upcycle for container shipping will not end until new capacity enters the market. But even a normalization in the supply chain will see no return to the past decade’s low-rate environment.
The current structural upswing in the container shipping market will not reach its apex until 2023, when a new landscape arrives for the sector.
It will take several months for Long Beach and Los Angeles ports to reduce the queue of containerships waiting at anchorage.
Measures easing the congestion at LA/LB ports and stakeholders’ opinions
Long Beach and Los Angeles ports have announced plans to reduce congestion and accelerate throughput by increasing the operating hours at marine terminals, giving more opportunities for drayage drivers to collect and return containers.
The two ports will coordinate with the trucking community to ensure that all drayage firms understand how to capitalize on the incentivized gate hours and other opportunities to move cargo during non-peak times.
The Chief executive of the Harbor Trucking Association representing drayage firms at US west coast ports was not impressed with the new development. He said underlying issues included restrictive appointments for import pickup and empty return, the lack of chassis, and a lack of appropriate labor staffing at marine terminals.
Members of the International Longshore and Warehouse Union, which represents dockworkers at the two ports, expressed their willingness to take up additional hours in the interest of alleviating congestion.
The Pacific Merchant Shipping Association (PMSA), which represents ocean carriers and marine terminals along the US west coast, had reservations concerning the new development. PMSA president said that high dwell times indicate more to the congestion issue than just gate hours.
China port congestion and its impact on the transpacific route
With the number of ships at anchor growing at Shanghai, at Ningbo, and in Southern California, the delays at Chinese origins will ripple through supply chains, raising the risk of another wave of structural blank sailings.
According to the latest ocean reliability reading from Sea-Intelligence Maritime Analysis, carrier on-time performance in the eastbound trans-Pacific declined in July for the third month in a row. On-time arrival to the West Coast was 15.7 percent in July, while reliability on Asia–US East Coast services was 20.9 percent.
Read more: JOC
Stakeholders’ opinions on EU proposal for global fuel emissions standard
The European Union has called for a global greenhouse gas standard on ship fuels, adding to the growing pressure on the global maritime regulator to adopt such a measure by 2025.
Shipowners and environmental groups have warned that greenhouse gas standards on fuels could be more consequential for both the industry and its climate impact than putting a price on emissions.
They have also warned that such a policy that does not discriminate between fuels would benefit biofuels, especially amid a lack of alternative fuels.
Biofuels have a lower greenhouse gas content than fuel oil. Still, there are disparities among different biofuels in sourcing, causing concern about their sustainability credentials and overall environmental footprint.
Read more: Lioyd’s List
Opinion on collaboration with stakeholders for developing alternative marine fuels
The development of zero-emission marine fuel is a complicated process, requiring a broad involvement of various stakeholders — not least the shipowners and the fuel producers — let alone the regulators.
Yet surely it would help to hammer out a more efficient approach if the owners, especially the leading ones, can first reduce their craving for the first-mover advantage and increase collaboration.
Read more: Lioyd’s List
Several options for solving the shipping decarbonization
According to Mr. Mads Zacho, head of industry transition at the Maersk Mc-Kinney Møller Center for Zero Carbon Shipping, it is necessary to introduce a carbon tax to close the pricing gap and reward first-movers. He said if the industry stays on the current pathway, it is heading for carbon emissions increase mainly because of cost gaps between fossil fuels and alternative zero-carbon fuels, which were five times more expensive.
Most of the technology is already known, but it is the scale and costs that pose challenges. A few of the technologies will likely co-exist as different fuels will be more suited to specific types of vessels.
At Marine Money Climate Week webinar, Mr. Matt Stone, McKinsey & Co partner, said that Zero-carbon shipping was possible, but vessel efficiency would also have to play a role. He also said there were several options for new alternative fuels, including green hydrogen synthesized to e-methanol and e-ammonia, blue hydrogen from carbon capture and storage, and the biomass/biofuels pathways. Methanol is easier to adopt as it is widely used in the chemical industry, and the needed technology is available. However, green ammonia has toxicity issues, and handling and building new infrastructure are challenging, while hydrogen may have a role to play in combination with fuel cells.
Read more: Lioyd’s List