World Maritime News
Outlook for freight rate, supply chain crisis, and US demand for goods
Freight rates may be beginning to come off the boil on some trade lanes, but there are warnings that any relief will be relative and that a return to sustainable rates is still some time off. According to Sea-Intelligence chief executive Alan Murphy, to get back to the rate levels seen between 1998-2014 would require a 69% fall from where they are now.
Container lines and their largest import customers are beginning trans-Pacific service contract negotiations earlier month, driven by shippers’ concerns about securing enough contracted space and carriers’ stronger positioning.
Carriers have always wanted to change their relationship with shippers; now, they have the right market to do it.
According to retailers, congestion along the US supply chain will persist until well into 2022, assuming there are no further spikes in coronavirus infection rates.
US retail consumption growth continues despite a resumption of spending on services and a change in the nature of purchased goods. A survey of the latest US Bureau of Economic Analysis figures by Sea-Intelligence shows a 25% jump in total personal consumption in the year to September.
According to the Global Shippers Forum, rising inflation and interest rates could put the brakes on consumer demand and lead to a rapid slowdown in global demand for container shipping, despite carrier “hype” over lasting congestion levels.
Long-dwell container fee and detention/demurrage fee
Los Angeles and Long Beach ports postponed one week of implementing costly emergency fees on long-dwell containers as retailers rushed to vacate those containers from the docks.
The looming storage tariffs in Los Angeles and Long Beach are starting to force carriers, marine terminals, and shippers to break through the gridlock of competing interests.
Detention and demurrage costs have soared in 2021, and shippers complain that many of these storage fees are mistaken and difficult to correct.
Biden endorses shipping reform
The White House endorsed proposed shipping reform legislation and said the Department of Justice is ready to assist maritime regulators if they find alliances are violating the US Shipping Act.
Read more: JOC
Ports need reliable schedules to ease terminal congestion
Carriers say their schedules are unreliable due to port congestion, but ports blame the congestion of late vessels. Supply chain participants need to work together to avoid the chicken-and-egg problem of port congestion and schedule delays.
Ports in Europe are stuck in a situation where terminals cannot improve their utilization as long as vessels arrive late, and vessels cannot keep reliable schedules unless terminal utilization improves.
Despite schedule reliability sitting at record lows, carriers are increasingly skipping port calls to meet schedules amid port congestion and delays.
Transpacific trade to North America is growing, but exports are hit by ‘market distortion’ of shipping lines toward US import
New figures from Container Trades Statistics show that global volumes fell 3% in September, the latest period available data. On the other hand, the transpacific trade to North America grew to 2.2m TEU in September, the highest monthly total to date.
Ships used to call Los Angeles and Long Beach first to drop off containers and then sail to Oakland to drop off more containers while also picking up agricultural exports before returning to Asia. Now ships are simply dropping off their containers in Los Angeles and Long Beach and then heading straight back to Asia without calling Oakland at all, which causes exporters to be stranded and lose markets.
Benefits of terminal automation questioned
An International Transport Forum analyzed the costs and benefits of automation at the 53 ports worldwide that have some form of automated operation and found that they were generally no more productive than conventional counterparts. “Port organization and specialization, geographical location, and port size are more important determinants of port performance than automation,” it said in a report.
San Pedro Bay ports start offshore queueing system to clear cargo
Los Angeles and Long Beach ports introduced a new queuing system for containerships to speed up cargo movement and cut emissions. The measure came into effect on November 16. Incoming vessels will be assigned a place in the arrival queue based on their departure time from their last port of call. Eastbound ships have to wait 150 miles (in the case of northbound and southbound ships, 50 miles) away from the coast of Southern California until a berth becomes available for them. According to Capt. James Kipling Louttit, the marine exchange’s executive director, this system allows ships to slow their speeds, reducing emissions and risk of accidents as winter weather conditions approach.