Tag: <span>Logistics</span>

Ocean carriers are facing growing wait times for berths at Singapore and omitting the port on intra-Asia and Asia-Africa services amid a deepening logjam at Southeast Asia’s leading container gateway caused by ongoing Red Sea vessel diversions.

Carriers and forwarders said the average berthing delay is three to five days, but HMM and Ocean Network Express (ONE) said they are experiencing more than that.

Singapore’s Maritime and Port Authority (MPA) said the situation is the culmination of months of disruption as carriers curtail or blank services, discharging cargo in Singapore and other ports because vessel diversions around southern Africa mean they no longer call at Middle East or Red Sea ports.

As a result, Singapore has seen container volumes surge 8.8% to 13.4 million TEUs in the first four months of 2024 compared with last year, MPA said in a statement Thursday.

The agency said vessels are having to wait longer to berth for several reasons, including an increase in vessels arriving off-schedule, the bunching of vessel arrivals, and terminal congestion and longer dwell times as carriers discharge more containers as they forgo subsequent voyages to catch up on sailing schedules.

Terminal operator PSA Singapore is reactivating closed berths and container yards at its Keppel terminal to increase cargo handling capacity.

“The waiting time for ONE vessels has increased to an average of four days up to a maximum of eight and a half days,” an ONE spokesperson told the Journal of Commerce.

The situation is being exacerbated by high container yard utilization, so productivity is dropping and dwell times are increasing, the ONE spokesperson added.

HMM said it was facing average delays of more than four days. Despite the congestion, HMM said it continues to use Singapore as its main transshipment hub, but the carrier warned “if congestion at Singapore port keeps getting worse, we will consider rolling cargo or skipping Singapore to improve our services.”

Skipping Singapore calls

Carriers, including ONE and OOCL, are already skipping Singapore on regional services.

“Several vessels, especially those operating intra-Asia and West African services, are omitting Singapore and all Singapore [remain-on-board] cargo is being discharged at Port Klang [Malaysia],” the ONE spokesperson said.

But the extra volumes at Port Klang, which comprises the Westport and Northport terminals, is worsening congestion there, with Hapag-Lloyd reporting berth waiting times of 36 to 45 hours due to high yard utilization and vessel bunching.

Pointing out the impact of delays on intra-Asia and regional services, one senior executive at an intra-Asia carrier said a three-day delay at Singapore was the equivalent of a transit from Hong Kong to Singapore that included a call at Shenzhen’s western Shekou and Chiwan terminals.

“Intra-Asia carriers operate on tight fixed schedules,” the source said. “If there’s a three- to five-day delay at Singapore, intra-Asia carriers have no choice but to omit port calls, or discharge and roll cargo just to maintain some semblance of a schedule.”

Carriers said they are in close discussions with PSA over vessel arrivals to try to minimize delays at Singapore and the negative impact on vessel schedules. “[But] current berth capacity is insufficient to cater for our overall berth requirements, so delays continue to be expected,” the ONE spokesperson said.

Details please refer to JOC news.

Source:

Wallis, K. (2024, May 31). Carriers omit Singapore calls amid growing delays as Asia port congestion spreads. Journal of Commerce. https://www.joc.com/article/carriers-omit-singapore-calls-amid-growing-delays-asia-port-congestion-spreads_20240531.html

 

Bad weather and resulting congestion at ports in Asia are causing vessel delays of up to a week at key gateways in the region, carriers say.

Hapag-Lloyd said fog is the main problem at ports in China, including Shanghai and Ningbo, while torrential rain and poor visibility were issues in Malaysia and Singapore. An index measuring wait times in harbor, produced by Portcast, shows congestion in Ningbo began rising mid-April.

The adverse conditions meant vessels could not berth even as more ships arrived at anchorage, leading to vessel bunching that exacerbated port congestion. Yard congestion in Singapore also contributed to the delays there, Hapag-Lloyd said in an advisory Thursday.

The delays come on top of the extra 10- to 14-day transit carriers face due to diverting vessels around southern Africa to avoid the risk of attack in the Red Sea region.

One of the worst-affected facilities is the Shanghai East Container Terminal, where there are delays of up to seven days, Maersk said in an advisory this week. Other terminals in Shanghai are seeing delays of up to three days, while Ningbo and Qingdao in eastern and northern China are reporting similar delays, Maersk added.

Hapag-Lloyd said vessels are having to wait up to 80 hours to berth at Port Klang and 72 hours in Singapore.

Ocean Network Express (ONE) confirmed that some ships operating trans-Pacific and intra-Asia services are having sailing schedules disrupted by the bad weather and port congestion.

Highlighting the delays, ONE sailing schedules show the 10,000-TEU Seaspan Bellweather, operating the Asia-Latin America Express 3 service, was two days late at Ningbo. That lengthened to three days when the vessel berthed at Shanghai and then five days when the vessel arrived at the next call, Qingdao, this week. ONE attributed the delays to berth congestion at all three ports.

Source:

Walli, K. (2024, April 26). Bad weather causing delays, congestion at major Asian Load Ports. Journal of Commerce. https://www.joc.com/article/bad-weather-causing-delays-congestion-major-asian-load-ports_20240426.html

The improving US economic outlook is driving the return of Asia import growth, with macro and micro signs pointing to a stronger year for Asia-US trade than anticipated just months ago.

US imports from Asia have been rising on a year-over-year basis since October, with February volumes up more than 30% from a year ago, according to early readings of data from PIERS, a sister product of the Journal of Commerce within S&P Global, when retailers and wholesalers were still destocking after an unprecedented import surge in 2021 and 2022. Separately, US retailers last week increased their forecasts for first-half import volumes for the second month in a row.

“I think…we could see physically on the terminals that since November, the imports have been picking up into the US and into the Canada gateways…,” Jeremy Nixon, CEO of Ocean Network Express (ONE), told TPM24 last week. “I was actually out on the terminals (in Southern California) yesterday, and you could see that the terminals are already working at quite high utilizations.”

Strong US employment, record-high wages and a rising housing market are driving strong imports. Importers, according to Nixon, are getting over their overstocked “big hangover” and have “punched (their way) through” what he likened to 18 months of indigestion. He told TPM24 that the automotive sector looked strong for this year and next, and so do cargoes tied to decarbonization, ranging from solar panels to electric vehicle components.

Rising economic tide lifts most goods

Fiscal loosening, as inflation eases yet still hangs over the economy, is pushing the US toward a so-called softer economic landing, brightening the prospects of stronger import volume growth. S&P Global recently lifted its forecast for US real gross domestic product (GDP) because the economy has exceeded expectations in early 2024, said Chris Williamson, chief business economist for S&P Global, parent company of the Journal of Commerce. US GDP this year will expand at a 2.4% clip rather than the original forecast of a 1.7% uptick, according to S&P Global.

“There are very few signs of recessions becoming imminent in the US or elsewhere,” Williamson said at TPM24.

Globally, factories are finally revving back to pre-pandemic production levels. An index measuring the upstream supply chain from manufacturing lines shows that demand for raw materials, commodities and components is recovering. The February reading of the GEP Global Supply Chain Volatility Index showed an essentially flat reading of 50, resulting in a 10-month high for the barometer created by procurement software provider GEP with S&P Global’s help.

While the growth of financial services is leading the muted global economic recovery, manufacturing is starting to show strength, Williamson said. In February, S&P’s global manufacturing purchasing managers’ index (PMI) hit an 18-month high and notched its first measure of growth since August 2022.

“Global manufacturing output and global goods exports are turning up quite nicely,” Williamson said. “Trade and exports are showing signs of stabilizing.”

As was the case during the pandemic-driven import boom, US consumers are the hungriest for goods coming off the assembly line. The National Retail Federation’s Global Port Tracker last week upgraded its expectations for US imports through the first half of 2024. US imports for the first six months of the year are now expected to be up 7.8% compared with the first half of 2023. That’s a significant revision and the second within two months; retailers just last month were expecting more modest growth of 5.3%.

Here comes the capacity

The volume projections from US retailers appear to be resonating with container lines. Asia outbound vessel capacity is rising to make more room for spring clothing, furniture for new homes and whatever outdoor furniture was not snagged during the pandemic. Ocean capacity between Asia and the US in March and April will rise approximately 22% to well over 1.3 million TEUs each month compared with deployments in January and February, according Drewry Container Capacity Insight, which bases forecasts on announced carrier sailings.

US consumers may be more sensitive to prices as inflation continues to drag, with even wealthy big spenders picking a more modest Rolex and the rest of us tilting toward generic goods, but, ultimately, we’re still spending. Adjusting to price inflation, US consumers spent nearly 30% more on durable goods in the fourth quarter of last year than in pre-pandemic Q4 2019, according to the Organization for Economic Cooperation and Development. Betting against upward import growth this year — and against the resilience of the US consumer — looks unwise.

Source:

Szakonyi, M. (2024, March 14). Asia import projections rise on surprising US economic strengthening. Journal of Commerce. https://www.joc.com/article/asia-import-projections-rise-surprising-us-economic-strengthening_20240314.html

Attacks have continued against merchant vessels transiting the Red Sea, despite missile strikes by British and US forces, with a UK minister saying the industry must adapt.

Yesterday saw Iran-backed Houthi militia targeting a US-flagged vessel and the US military launching strikes on Houthi sites in Yemen.

However, the US strikes, the fourth in as many days, part of the joint UK-US Operation Prosperity Guardian, have seemingly failed to restore the faith of vessel owners.

According to data compiled by Alphaliner, by Monday, 338 vessels had diverted around the Cape of Good Hope, 192 on westbound voyages and 146 heading east.

Added to this has been rising regional tension, exacerbated by Iranian strikes against militants in Pakistan and retaliation.

Forwarder association Fiata has called on governments and key industry decision-makers to develop tools for global monitoring and to provide a coordinated effort to facilitate maritime transport in the region, as surcharges continue to drive costs up.

“Approximately 18 shipping lines have stopped or rerouted on the waterway due to ongoing attacks, with increased transit times of around 12 days via the Cape of Good Hope,” it said.

UK business minister Nusrat Ghani yesterday said there were limits to what governments could do, urging businesses to adapt to the continuing uncertainty.

Ms Ghani told a UK newspaper: “It is first and foremost for business to manage supply chains, with government intervention reserved for those areas where it is necessary, such as in cases of market failure.”

Despite this, the business minister unveiled a programme, which she said would seek to assist through the removal of import barriers, “where feasible”.

And it seems carriers have acted to try and decrease the delays from rerouting around the African coast, Alphaliner noting those on westbound sailings had increased vessel speed by about 1.5 knots, to an average of 16.5 knots, which it said, “helps to make Cape of Good Hope Asia-Europe sailing just ‘fast’ enough for ships to arrive exactly one week later than via their original routing”.

Source:

Wallis, K. (2023, December 22). Surging e-commerce demand lifts Hong Kong air cargo into peak season. Journal of Commerce. https://www.joc.com/article/surging-e-commerce-demand-lifts-hong-kong-air-cargo-peak-season_20231222.html

Shippers in Asia are facing a double whammy of soaring freight rates and a capacity crunch on intra-Asia trades as vessels operating deep-sea services are delayed due to longer transits around the Cape of Good Hope, shipping executives say.

Exporters are already seeing equipment shortages just as intra-Asia trade is close to peaking as the return of containers back to Asia is delayed due to vessel diversions driven by ongoing attacks on commercial shipping in the Red Sea by Houthi militants.

The impact will be especially felt on key services such as China-Vietnam and China-Thailand, where deep-sea services are accounting for an increasing share of the intra-Asia volumes on those trade lanes, figures show.

Deep-sea services accounted for about 64% of total quarterly capacity between China and Vietnam in the fourth quarter 2023, up from almost 58% a year prior, figures prepared for the Journal of Commerce by transport consultancy MDS Transmodal show. Blue water services provide approximately 50% of the capacity between China and Thailand, up slightly from a year earlier, and 90% of space between China and Singapore, MDS figures show.

Shipping and forwarding executives said the problems are likely to hit the peak shipping period ahead of the start of the Lunar New Year on Feb. 10 as factories across Asia, especially China, rush to complete orders before closing for about two weeks.

“Space and equipment will be tight before the Lunar New Year for the whole market,” May Yau, Asia pricing director at FIBS Logistics in Hong Kong, told the Journal of Commerce.

She said intra-Asia shippers will be disproportionately affected by equipment shortages as mainline carriers focus on deep-sea trades.

“Carriers have started to limit the release of equipment for short-haul and instead are prioritizing long-haul,” Yau added.

Carriers rerouting vessels via the Cape of Good Hope “has significantly impacted capacity supply and demand,” she said.

A senior intra-Asia shipping executive told the Journal of Commerce the Red Sea and Panama Canal disruptions have not yet had an impact on intra-Asia trades, but they will in time.

“Four weeks before the Lunar New Year we are really into the peak season for intra-Asia trades and there is a big requirement for space in the market,” the source said. “We’ve seen volumes rise 5% in January compared with December. Ships are full.”

Coming capacity shortfall

Peter Sand, chief analyst at rate benchmarking platform Xeneta, said total intra-Asia volumes grew 25% from September to October. In November, volumes increased 19% year on year, he added.

Research firm Linerlytica indicated the capacity shortfall will kick in at the end of this month as vessels on trans-Pacific and Asia-Europe services sail via southern Africa to avoid delays at the Panama Canal and the attacks in the Red Sea.

Details please refer to JOC news.

Source:

Wallis, K. (2024, January 16). Intra-asia shippers face capacity crunch, equipment shortages as rates surge. Journal of Commerce. https://www.joc.com/article/intra-asia-shippers-face-capacity-crunch-equipment-shortages-rates-surge_20240116.html

Not only do ocean carriers have too many ships, they also have too many containers to fill vessels that are being deployed.

In its latest Container Equipment Forecaster report, Drewry says it expects the global pool of shipping containers to contract, both this year and next.

Some 55 million teu of equipment services the fully cellular global fleet of some 6,000 ships, a total capacity of 28m teu, but thousands of surplus boxes lie stacked in empty-container depots, incurring storage charges on top of a daily lease-hire rate.

Drewry forecasts the box pool will have declined by 2.6% this year, and expects another decrease in 2024.

“The last time the container pool posted a year-on-year decline was at the time of the global financial crisis between 2008 and 2009, when the total number of containers in service fell by 3.7%, to 26.9m teu,” said the consultant.

However, as with their chartered-in ships, carriers must honour the terms of equipment lease agreements, which are commonly between five and 13 years, with renewals often agreed at between one and eight years.

For example, the second-largest container lessor, Textainer, reported during an earnings call a remaining average tenure of “approximately six years” for its 4.3m teu fleet.

Indeed, the business plan of the lessors appears to be as watertight as the charter parties’ agreements for the expensive long-term hires of the ships which carriers negotiated at the height of the post-pandemic demand boom.

And Textainer was bullish during its Q3 results presentation this month. president and CEO Olivier Ghesquiere said: “Overall market conditions have remained unchanged from the last quarter, yet our contracted revenue and profitability continue to be supported by our long-term lease contracts and fixed-rate financing policy.”

Moreover, for the 50% of boxes that are carrier-owned, lines are struggling to offload ageing equipment into the saturated second-hand market.

Details please refer to the news.

Source:

Wackett, M. (2023, November 28). Fleet-heavy ocean carriers also stuck with too many containers. The Loadstar. https://theloadstar.com/fleet-heavy-ocean-carriers-also-stuck-with-too-many-containers/

 

Ocean carriers in the eastbound trans-Pacific say capacity reductions they have implemented on the trade are likely to continue at least for the next five months because US imports from Asia are expected to remain muted through the Lunar New Year in February.

For importers and forwarders, the blank sailings mean the resulting schedule disruptions and “rolling” of cargo they are already experiencing at Asian load ports will force them to book more of their cargo with carriers they can count on to maintain schedule integrity.

“Blanks are making scheduling in the trans-Pacific unreliable. That’s why Matson is doing so well,” Jack Chang, president of the non-vessel-operating common carrier (NVO) CubeShip Consolidation, told the Journal of Commerce.

Matson Navigation charges a premium for its two express services from China to Long Beach.

“We try to protect our highest-priority cargo,” said a home furnishings importer who did not want to be identified. “We use Matson specifically for that purpose.”

A Matson spokesperson told the Journal of Commerce the carrier has had “no blanking to this point and no plans to blank,” adding its bookings this month have been strong.

Carriers, however, are emphatic that they will cancel even more sailings in the coming months if rates continue to move lower in the largest US trade lane.

“If spot rates go too low, carriers will do what they’re going to do — blank sailings,” a second shipping executive told the Journal of Commerce.

The Journal of Commerce spoke to five carriers, three NVOs, a third-party logistics provider and an industry analyst for this story.

The Lunar New Year holiday, when factories in Asia normally close for a week or two, begins Feb. 10. That means the slack shipping season and softening of spot rates in the eastbound trans-Pacific will likely extend through the end of the year and into March — or well beyond, according to some industry analysts.

“We will not see better rates than we have now,” Michael Braun, vice president of customer success and solutions at rate analytics platform Xeneta, told the Journal of Commerce. “We won’t see volumes coming back in 2024.”

Details please refer to JOC news.

Source:

Mongelluzzo, B. (2023, September 26). Aggressive trans-pac blank sailings likely through Lunar New Year amid freight downturn: Sources. Journal of Commerce. https://www.joc.com/article/aggressive-trans-pac-blank-sailings-likely-through-lunar-new-year-amid-freight-downturn-sources_20230926.html

Ocean freight rates and vessel capacity in the trans-Pacific are sinking amid a widening cargo drought during what is typically a peak shipping season for US importers ahead of China’s Golden Week holiday in early October. The downward spiral in import demand looks set to continue until shippers start ramping up orders again ahead of the Chinese New Year in February.

Almost every ocean carrier filed a general rate increase (GRI) of $1,000 per FEU effective at the start of September for eastbound trans-Pacific spot freight, according to Sea-Intelligence Maritime Analysis. Hapag-Lloyd was the only exception, having filed for a $600 peak season surcharge (PSS)…..

“As we approach October’s Golden Week holidays, container volumes are weakening and load factors are falling despite a higher number of blank sailings,” investment firm Jefferies said in a Sept. 10 report. “The number of actual sailings over the next five weeks, after taking into account the cancelations, is the lowest since February.”

Details please refer to JOC news.

Source:

Angell, M. (2023, September 14). “Golden Week” surge turns to bust as Trans-Pacific rates fall, Blank Sailings Rise. Journal of Commerce. https://www.joc.com/article/golden-week-surge-turns-bust-trans-pacific-rates-fall-blank-sailings-rise_20230914.html