With the bulk of this year's charters dominated by smaller vessels, appetite for larger ships seems to have fallen, reports Alphaliner.
A total 88 per cent of the 1,820 fixtures for January to September have been taken up by ships with capacities of less than 2,000 TEUs, a far cry from the 10,000 TEU monsters that dominated two years ago.
Fixture periods meanwhile have also taken a dive, with charters for the first nine months now recording average leasing periods of just four-and-a-half months.
The lack of appeal for longer leases is largely being attributed to the volatility in rates caused by the large gap between capacity and trade volumes that have made carriers ever-more wary about sudden shifts in prices.
Furthermore, due to low levels of trade, many have been also pushing for lower charter fees, with spot rates for September down by 68 per cent year on year.
Ship operators argue that low rates and overcapacity put them at great risk. German lines, which own about 61.5 per cent of leased vessels, have been particularly concerned, giving rise to a recent equity deal with Chilean carrier CSAV.
Feeder operators like Singapore-based Sea Consortium meanwhile, which rely heavily on chartered loads, capitalized on the low rates by adjusting their fleets and expanding their networks.
Reference: Shipping Gazette
Tuesday, March 23, 2010
Friday, March 19, 2010
Shift in attitudes brings opportunities for forwarders
A shift in attitudes from shippers is seeing an increasing number contracting with freight forwarders for ocean and air transport procurement needs. This reverses the trend where major shippers took such activity in-house, cutting out the forwarder.
That is the theme of a new report, Using International Freight Forwarders - Costs, Contracts and Best Practices, published by industry consultants Drewry Supply Chain Advisors.
An increasing number of clients are also relying on freight forwarders to handle a wider and more complex range of services and requirements. This is having the result of requiring more complex business contracts and practices being created.
The new report has been researched and written from the perspective that logistics is not a core business for many manufacturers and distributors. Contracting out to freight forwarders and third-party logistics (3PL) and 4PL providers can mean cost advantages and the flexibility of a wider carrier base - "so long as you know what you are dealing with," says the company.
Drewry believes that managers new to logistics will find this report a valuable mentor. For "battle-hardened professionals", it is a source of the latest forwarding data and best practice benchmarking while for anyone connected with logistics it is a reference for how to get the best from the freight forwarding supplier whilst managing the inherent risks.
The report costs £1,195 in printed and PDF versions and £950 for an electronic version.
Source: Freight Fox
That is the theme of a new report, Using International Freight Forwarders - Costs, Contracts and Best Practices, published by industry consultants Drewry Supply Chain Advisors.
An increasing number of clients are also relying on freight forwarders to handle a wider and more complex range of services and requirements. This is having the result of requiring more complex business contracts and practices being created.
The new report has been researched and written from the perspective that logistics is not a core business for many manufacturers and distributors. Contracting out to freight forwarders and third-party logistics (3PL) and 4PL providers can mean cost advantages and the flexibility of a wider carrier base - "so long as you know what you are dealing with," says the company.
Drewry believes that managers new to logistics will find this report a valuable mentor. For "battle-hardened professionals", it is a source of the latest forwarding data and best practice benchmarking while for anyone connected with logistics it is a reference for how to get the best from the freight forwarding supplier whilst managing the inherent risks.
The report costs £1,195 in printed and PDF versions and £950 for an electronic version.
Source: Freight Fox
Thursday, March 18, 2010
Challenges for air cargo
The air freight sector must beware of complacency, facing new threats and with recent improvements in volumes and yields limited to certain markets, according the chief economist for IATA.
Brian Pearce told delegates at Iata’s World Cargo Symposium in Vancouver: “There has been a strong bounce-back in some markets, such as developing economies.
“But it’s a different story in developed economies, particularly in Europe, where economic activity is still very flat.”
Air freight rates have, in places, returned to the levels they were at 12 months ago, he said, and had seen higher growth than ocean rates, but it had taken around 160 freighters leaving the market to bring about the revival in load factors and rates.
“But poor asset utilisation and more capacity being delivered means we are not out of the woods in terms of cargo rates,” he said.
Pearce warned that the global economy was still facing major challenges that threatened the future profitability of air freight.
“The price of a massive rescue package in sluggish western economies was a massive budget deficit – and we will face higher taxes to pay for that, so growth in those economies will be slower,” he said.
“Fuel prices are also starting to rise, and environmental policies will also add to costs.”
He added that the sector also still faced structural challenges in terms of how to turn market growth into profitability.
David Hoppin, managing partner of Merge Global consultancy, added further gloom.
“Two-thirds of GDP in the US comes from consumers, and we think consumer psychology has changed,” he said. “We think there’s a strong possibility of a double-dip recession.”
However, Ram Menen, divisional senior VP of cargo for Emirates.disagreed.
“The strength of the economy is better than I thought it would be,” he said.
“We will see a shift into the consumer markets of China and India, which are strengthening with a new set of consumers who are young with a disposable income.”
But Des Vertannes, head of Etihad Cargo, took a more cautious stance.
“Air freight has benefited from limited ocean capacity, and inventory replenishment continues to be far more controlled,” he said.
“But the threat of unemployment prevails, and banks are still not lending – that’s a critical area.”
Source IFW
Brian Pearce told delegates at Iata’s World Cargo Symposium in Vancouver: “There has been a strong bounce-back in some markets, such as developing economies.
“But it’s a different story in developed economies, particularly in Europe, where economic activity is still very flat.”
Air freight rates have, in places, returned to the levels they were at 12 months ago, he said, and had seen higher growth than ocean rates, but it had taken around 160 freighters leaving the market to bring about the revival in load factors and rates.
“But poor asset utilisation and more capacity being delivered means we are not out of the woods in terms of cargo rates,” he said.
Pearce warned that the global economy was still facing major challenges that threatened the future profitability of air freight.
“The price of a massive rescue package in sluggish western economies was a massive budget deficit – and we will face higher taxes to pay for that, so growth in those economies will be slower,” he said.
“Fuel prices are also starting to rise, and environmental policies will also add to costs.”
He added that the sector also still faced structural challenges in terms of how to turn market growth into profitability.
David Hoppin, managing partner of Merge Global consultancy, added further gloom.
“Two-thirds of GDP in the US comes from consumers, and we think consumer psychology has changed,” he said. “We think there’s a strong possibility of a double-dip recession.”
However, Ram Menen, divisional senior VP of cargo for Emirates.disagreed.
“The strength of the economy is better than I thought it would be,” he said.
“We will see a shift into the consumer markets of China and India, which are strengthening with a new set of consumers who are young with a disposable income.”
But Des Vertannes, head of Etihad Cargo, took a more cautious stance.
“Air freight has benefited from limited ocean capacity, and inventory replenishment continues to be far more controlled,” he said.
“But the threat of unemployment prevails, and banks are still not lending – that’s a critical area.”
Source IFW
Tuesday, March 16, 2010
China Mainland shippers groups seek 'unreasonable' fees probe
Logistics and container industry groups in 10 mainland cities have filed a request to the Ministry of Transportation to investigate into international ocean carriers charges, according to a report of National Business Daily.
Groups from Shanghai, Shenzhen, Guangzhou, Xiamen, Dalian, Tianjin and Qingdao have joined to ask that "unreasonable" demands including: equipment management fees, container seal fees and document printing fees demands be probed.
Industry protesters claim ocean carriers collect fees during the operations of container transportation which amount to nearly CNY30 billion (US$4.4 billion) a year. In Shenzhen alone, the document printing fee totalled to CNY300 million in 2008 based on the port's annual throughput of 21 million TEU, said the report, also carried by Xinhua.
Shenzhen Container Trailer Association secretary general Xu Xiaoming said road carriers are the same as ocean carriers and it is unreasonable that they be charged fees for moving cargo to the terminal. Large ocean carriers like Maersk should not bully road carriers into paying such fees, they said.
A lawyer who has been examined related cases said Maersk is trying to transfer the risk of offering low rate in order to remain competitive by charging such fees to cover its loss.
The lawyer cited in the story noted that Maersk is not charging such fees at overseas ports. Commenting on this, Xu Xiaoming said this was because there are still loopholes in the related laws in China.
Maersk China spokesman Yan Ci said the charges do not break the law and will continue to be applied.
A recent statement posted on Maersk's official website said the company is trying to reduce operating costs and hopes to "go through the hard times with its customers".
The carriers said the rate in 2009 was too low to cover costs and it needs to be adjusted. It apologized for the problems caused during the process of tackling this situation and promised to solve them.
Reference: Shipping Gazette
Groups from Shanghai, Shenzhen, Guangzhou, Xiamen, Dalian, Tianjin and Qingdao have joined to ask that "unreasonable" demands including: equipment management fees, container seal fees and document printing fees demands be probed.
Industry protesters claim ocean carriers collect fees during the operations of container transportation which amount to nearly CNY30 billion (US$4.4 billion) a year. In Shenzhen alone, the document printing fee totalled to CNY300 million in 2008 based on the port's annual throughput of 21 million TEU, said the report, also carried by Xinhua.
Shenzhen Container Trailer Association secretary general Xu Xiaoming said road carriers are the same as ocean carriers and it is unreasonable that they be charged fees for moving cargo to the terminal. Large ocean carriers like Maersk should not bully road carriers into paying such fees, they said.
A lawyer who has been examined related cases said Maersk is trying to transfer the risk of offering low rate in order to remain competitive by charging such fees to cover its loss.
The lawyer cited in the story noted that Maersk is not charging such fees at overseas ports. Commenting on this, Xu Xiaoming said this was because there are still loopholes in the related laws in China.
Maersk China spokesman Yan Ci said the charges do not break the law and will continue to be applied.
A recent statement posted on Maersk's official website said the company is trying to reduce operating costs and hopes to "go through the hard times with its customers".
The carriers said the rate in 2009 was too low to cover costs and it needs to be adjusted. It apologized for the problems caused during the process of tackling this situation and promised to solve them.
Reference: Shipping Gazette
Thursday, March 11, 2010
Bangkok Security
Our U Freight colleagues have provided us the following update:
Once again we find ourselves facing unsettling times politically with the planned mass rally by the UDD in Bangkok this weekend. As you are probably aware the Government has implemented the Internal Security Act to be effective in Bangkok and several surrounding areas, including Samut Prakarn province where Suvarnabhumi Airport is located, between March 11th and 23rd. This allows for all security to be controlled by the Military through the Internal Security Organising Committee (ISOC), under the leadership of the Deputy Prime Minister Mr.Suthep, instead of the Police.
The UDD’s stated intent is to cause a dissolution of the present Government through the means of mass, peaceful rally in strategic locations of Bangkok. Whilst it is not clear exactly how they plan to achieve this there are indications that they will attempt to disrupt traffic and generally inconvenience the normal daily routine of Bangkok and other provinces in close vicinity. They have indicated that they may blockade routes into and out of the City and it does not appear as though seizure of any of the airports is their primary intent at this time.
We are closely monitoring the situation as it develops. At this time there is very little confirmed information but we are preparing for possible disruption to traffic in and out of the City. We are meeting regularly to discuss contingency plans to deal with the situation as it develops. Initially the biggest challenge appears to be whether the traffic disruptions will cause problems for staff and cargo to access the airport/seaport and if so how severe the traffic disruptions could be.
Estimates of how many people will join the rally vary from 50,000 to 300,000 so it is very difficult to predict the extent of any disruption including if any roads will be partially or fully blocked. Whatever the degree of disruption it will affect equally staff and cargo trucks. Please expect some delay of the shipment due to the delay problem of transportation during this period which we will informed to you in case by case if any.
We have identified where our staff live and assessed the possible disruption based on the location of their homes and will use this information to plan for contingencies depending on the degree of disruption. Our prime concerns are to ensure the safety of our staff and their families whilst being able to continue to provide our usual level of service to our valued customers.
Should the situation deteriorate or a seizure of the airport appears more likely we will fallback on our alternate plans for UTP however, the situation of airport closure is not viewed as likely at this time.
We will keep you posted as our plans develop and hope that the situation remains calm and controllable as we approach the weekend.
*UDD = National United Front of Democracy Against Dictatorship
*UTP = Utapao Airport
Best regards,
Waraporn Ninwat
U-Freight (Thailand) Co.,Ltd
Once again we find ourselves facing unsettling times politically with the planned mass rally by the UDD in Bangkok this weekend. As you are probably aware the Government has implemented the Internal Security Act to be effective in Bangkok and several surrounding areas, including Samut Prakarn province where Suvarnabhumi Airport is located, between March 11th and 23rd. This allows for all security to be controlled by the Military through the Internal Security Organising Committee (ISOC), under the leadership of the Deputy Prime Minister Mr.Suthep, instead of the Police.
The UDD’s stated intent is to cause a dissolution of the present Government through the means of mass, peaceful rally in strategic locations of Bangkok. Whilst it is not clear exactly how they plan to achieve this there are indications that they will attempt to disrupt traffic and generally inconvenience the normal daily routine of Bangkok and other provinces in close vicinity. They have indicated that they may blockade routes into and out of the City and it does not appear as though seizure of any of the airports is their primary intent at this time.
We are closely monitoring the situation as it develops. At this time there is very little confirmed information but we are preparing for possible disruption to traffic in and out of the City. We are meeting regularly to discuss contingency plans to deal with the situation as it develops. Initially the biggest challenge appears to be whether the traffic disruptions will cause problems for staff and cargo to access the airport/seaport and if so how severe the traffic disruptions could be.
Estimates of how many people will join the rally vary from 50,000 to 300,000 so it is very difficult to predict the extent of any disruption including if any roads will be partially or fully blocked. Whatever the degree of disruption it will affect equally staff and cargo trucks. Please expect some delay of the shipment due to the delay problem of transportation during this period which we will informed to you in case by case if any.
We have identified where our staff live and assessed the possible disruption based on the location of their homes and will use this information to plan for contingencies depending on the degree of disruption. Our prime concerns are to ensure the safety of our staff and their families whilst being able to continue to provide our usual level of service to our valued customers.
Should the situation deteriorate or a seizure of the airport appears more likely we will fallback on our alternate plans for UTP however, the situation of airport closure is not viewed as likely at this time.
We will keep you posted as our plans develop and hope that the situation remains calm and controllable as we approach the weekend.
*UDD = National United Front of Democracy Against Dictatorship
*UTP = Utapao Airport
Best regards,
Waraporn Ninwat
U-Freight (Thailand) Co.,Ltd
Monday, March 1, 2010
Shanghai bans dangerous cargo shipments during Expo
The Shanghai Maritime Safety Authority (SMSA) announced the imposition of restrictions on certain dangerous goods shipments during the World Exposition 2010 Shanghai.The world's fair will be held from May 1 to October 31 and is expected to draw a crowd of 70 million.SMSA announced that from April 15 to November 15 all port terminals located in the middle and upstream parts of the Huangpu River are prohibited from handling dangerous cargo. In addition, all port terminals, except for Yangshan terminals, will be prohibited from handling dangerous cargo From April 30 to October 31. Furthermore, the export of fireworks at Wai Gao Qiao (WGQ) terminals will require local authority's approval on a per voyage basis.It is recommended that customers to exercise caution when accepting prohibited dangerous cargo as there is no recourse when the vessel arrives between the prohibited periods.
Reference: Shipping Gazette
The Shanghai Maritime Safety Authority (SMSA) announced the imposition of restrictions on certain dangerous goods shipments during the World Exposition 2010 Shanghai.The world's fair will be held from May 1 to October 31 and is expected to draw a crowd of 70 million.SMSA announced that from April 15 to November 15 all port terminals located in the middle and upstream parts of the Huangpu River are prohibited from handling dangerous cargo. In addition, all port terminals, except for Yangshan terminals, will be prohibited from handling dangerous cargo From April 30 to October 31. Furthermore, the export of fireworks at Wai Gao Qiao (WGQ) terminals will require local authority's approval on a per voyage basis.It is recommended that customers to exercise caution when accepting prohibited dangerous cargo as there is no recourse when the vessel arrives between the prohibited periods.
Reference: Shipping Gazette
Reference: Shipping Gazette
The Shanghai Maritime Safety Authority (SMSA) announced the imposition of restrictions on certain dangerous goods shipments during the World Exposition 2010 Shanghai.The world's fair will be held from May 1 to October 31 and is expected to draw a crowd of 70 million.SMSA announced that from April 15 to November 15 all port terminals located in the middle and upstream parts of the Huangpu River are prohibited from handling dangerous cargo. In addition, all port terminals, except for Yangshan terminals, will be prohibited from handling dangerous cargo From April 30 to October 31. Furthermore, the export of fireworks at Wai Gao Qiao (WGQ) terminals will require local authority's approval on a per voyage basis.It is recommended that customers to exercise caution when accepting prohibited dangerous cargo as there is no recourse when the vessel arrives between the prohibited periods.
Reference: Shipping Gazette
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