World Maritime News
Situations of port congestion in the US, Europe, and China
The key US west coast gateway ports of Los Angeles and Long Beach are improving even as Europe’s congestion situation continues to deteriorate. “Although major North American ports remain heavily congested, we are now seeing some small signs of improvement on the west coast,” said Drewry senior analyst Eleanor Hadland. Already congested ports in North Europe are bracing for a spike in volume this summer following the lifting of COVID-19 lockdowns in China. But deteriorating economic conditions in Europe could cause demand to drop in the fourth quarter. US retailers projected near-record import volumes this summer and fall, warning that already-stressed ports and inland supply chains should prepare for continued challenges through the peak shipping season. Shanghai is showing signs of normalization after lockdowns were lifted. But there is unlikely to be a sudden cargo surge as manufacturing resumes. Vessel waiting times at Shanghai Port are falling, and congestion is easing as the city emerges from its two-month lockdown.
Uncertain demand overshadows container sector outlook
Container line profitability may have peaked as the market faces “significant and unprecedented” uncertainties in both demand and supply. Excess demand is now set to taper off, with the International Monetary Fund and the World Bank revising the lower ranges of their estimated global gross domestic product growth forecasts. The economic shock from Ukraine in the form of rising food and energy prices had already increased inflation rates worldwide. Many key economic indicators, such as purchasing managers indices and consumer confidence, were falling, while in the US, spending on services had returned to pre-pandemic levels.
Read more: Lloyd’s List
Biden signs the Ocean Reform Act of 2022 (OSRA-22)
President Joe Biden, on 16 June, signed into law the United States’ first significant shipping reform in more than two decades. The law gives maritime regulators greater oversight over container storage fees and the ability to monitor whether ocean carriers adhere to soon-to-be revised rules on loading exports. Visiting the Port of Los Angeles on 10 June, Biden said OSRA would help alleviate congestion and inflation by going after ocean carriers, who he says have raised freight rates to unreasonable levels. OSRA-22 opponents, however, have said the legislation would do nothing to address port backlogs.
Read more: JOC
US regulator launches supply chain initiatives
The US Federal Maritime Commission is to launch three new initiatives designed to support shippers, improve regulatory compliance and provide remedies to supply chain issues. The move will see the regulator establish a new permanent international ocean shipping supply chain program, re-establish its export rapid response team, and take steps for carriers and terminal operators to employ a designated FMC compliance officer. The FMC said the need for a dedicated ocean shipping supply chain program grew from recognizing longstanding systemic problems in the networks and facilities serving US shipping.
Read more: Lloyd’s List
The situation in west coast labor negotiations
The ILWU and PMA expect talks to continue beyond the 1 July expiration of the current labor contract. But neither are planning any action that would disrupt cargo. The parties negotiating the US west coast labor contract have issued a joint statement indicating an agreement will not be reached before the collective bargaining arrangement expires on 1 July. “Cargo operations continue beyond the expiration of the contract. Neither party is preparing for a strike or lockout,” the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA), which represents employers, said in a joint statement. The statement was unusual in that the ILWU and PMA rarely, if ever, issue such proclamations during contract talks. It comes just days after the two sides met Friday with President Joe Biden during his visit to the Port of Los Angeles. West Coast terminal operators and the ILWU are weighing a proposal that would allow terminals to open their gates at 6 a.m., a move with truckers’ support.
Labor negotiation in Germany to intensify port congestions
Several hours of talks on a collective wage agreement for 12,000 workers in the ports of Hamburg, Bremerhaven, and Lower Saxony between the Central Association of German Seaport Companies (ZDS) and trade union ver.di ended without agreement on 11 June. It was not immediately known when the new talks would be scheduled. Longer wait times at Europe’s key containership terminals will worsen as German dockworkers strike over pay. According to Drewry AIS analytics, the average call duration at the main Northwest European ports jumped by more than 50% in the first quarter compared with the average before lockdowns were imposed on key global economies.
Discussions at the IMO MEPC 78
Deep divisions have emerged between IMO countries over the timing, scope, and assessment of revised decarbonization goals. The IMO’s Marine Environment Protection Committee (MEPC) was held from 6 to 10 June to consider proposals to change its initial strategy to curb greenhouse gas emissions, which does not align with climate change targets. There are growing calls for shipping to agree with a zero-emission target by 2050 as the committee nears a 2023 deadline to finalize its short-term measures. But discussions on revising climate change goals show oil-producing and high-emission countries joining delegates from least-developed nations in opposing proposals that would fast-track any decision. The MEPC78 approved making the Mediterranean Sea a low-sulfur emissions control area and set a timeline to continue work on carbon pricing. The Cook Islands, Mexico, Myanmar, Colombia, and Malaysia endorsed a zero-emissions-by-2050 target, bringing the total to 50 countries.
IMO rejects industry-based $5bn decarbonization fund
Week-long MEPC session ends amid claims of ‘short-sighted political maneuvering’ as the deadline looms to finalize short-term measures to cut carbon emissions and revise targets. The IMO rejected a shipping industry-backed proposal to establish a $5bn research and development board and associated research fund that would promote decarbonization. Member states expressed concern over the equitable use of the R&D funds and fair and equal access to any patents and technologies that would be created.
Shippers’ opinion on carbon levy
Any steps toward a carbon tax could raise freight costs to unsustainable levels if carriers can pass that cost to their customers, the Global Shippers Forum has warned. This May, the IMO Intersessional Working Group (ISWG) reached an agreement on pricing emissions after a decade of back-and-forth, and the Global Shippers Forum (GSF) is pushing back. The GSF worries about how the Bunker Adjustment Factor (BAF), a surcharge that adjusts to fuel price fluctuations, will be passed to them. The scale of the tax hasn’t yet been determined.
Reducing vessel speed is ‘the most powerful way to cut emissions.’
Norwegian analysis of shipping’s journey to decarbonization concludes the vast majority of the fleet has few options for finding operational ways to cut emissions over the next three to five years. An analysis of the Energy Transition in Shipping concludes that the best way to reduce energy and fuel consumption is by reducing speed, investing in technical modifications, and imposing operational measures, including drop-in biofuel/eFuel, when available.
Read more: Lloyd’s List