China's weekly export container shipping index declines 0.1 pc
CHINA's index of export container transport dipped in the past week, according to the Shanghai Shipping Exchange, reports Xinhua.
The average China Containerised Freight Index (CCFI) stood at 834.24, down 0.1 per cent from a week earlier, according to the exchange.
The sub-reading for the West-East Africa service led the decrease with a week-on-week fall of 7.5 per cent, while that for the west coast America route went up 1.7 per cent from last week.
The CCFI tracks spot and contractual freight rates from Chinese container ports for 12 shipping routes across the globe, based on data from 22 international carriers.
The index was set at 1,000 on January, 1, 1998.
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Surprise! Surprise! Hapag-Lloyd, ONE, Yang Ming post tonnage uptick
THE Alliance (Hapag Lloyd, ONE, Yang Ming) announced to general surprise that "in view of increasing demand," it was reinstating two transpacific sailings, starting with the voyage of the 6,572-TEU YM Mandate leaving China May 29 and arriving in Los Angeles on June 16, and the sailing of the 10,000-TEU Seaspan Brightness, departing May 25 and arriving in LA June 10.
Nerijus Poskus, global head of ocean freight at Flexport, recently told New York's FreightWaves that most current transpacific sailings are full, with excess cargo having to be "rolled" to subsequent sailings.
Meanwhile, the premium transpacific service of Matson recently added two extra loaders "in order to meet strong demand," including a sailing by the 2,824-TEU Capt Thanasis arriving in Long Beach on May 26. An extra loader is an unscheduled extra sailing, the opposite of a blank sailing.
If demand exceeds the supply of the remaining transpacific services that haven't been blanked, spot rates will rise, at least temporarily.
According to the Freightos Baltic Index, spot rates from China to the US west coast increased 33 per cent between February 28 and Thursday, and despite the global pandemic, they were at least 20 per cent higher than at the same time in each of the past three years.
But Maersk Line expects volume to be down 20 -25 per cent this month and next and is providing no guidance on the third quarter.
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Yang Ming, HMM post quarterly losses and expect more heavy weather
TAIWAN's Yang Ming and Korea's HMM suffered first quarter losses as the coronavirus took its toll on Chinese volumes, reported IHS Media.
Alphaliner said the two carriers will raise their capacity over the next two years. Yang Ming is to receive 14 new ships of 12,000 TEU each, and 10 ships of 2,800 TEU in 2020-22
HMM will receive 12 new ships of 23,000 TEU - two of which have been delivered and eight units of 15,000 TEU in the next 18 months.
HMM set to receive US$382 million from the South Korean government, and Yang Ming's board earlier this month approving a private placement of 300 million shares to raise capital.
HMM reported an 18.7 per cent decline in the first quarter of container volume to 890,000 TEU, but cost-saving efforts and the securing of higher-yield cargo allowed revenue to remain flat at $1 billion, the carrier said in a statement. While HMM reported a net loss of $55 million, it was still a 63.2 per cent improvement on the same quarter last year.
"Trade volumes are expected to be weakened as a result of demand-side impacts in the US and Europe, as well as continued lockdowns worldwide. Rising concerns over the US-China trade tensions related to geopolitical risks also can intensify the situation," said an HMM statement.
Yang Ming Line reported a $27.15 million loss in the first quarter, with revenue falling one per cent to $1.15 billion. Volume was down four per cent year on year to 1.24 million TEU, while bunker fuel costs went up five per cent as the IMO 2020 low-sulphur fuel regulation kicked in on January 1.
"Coupled with the slow resumption of production after Lunar New Year, and the proactive service and space reduction plan instituted by THE Alliance in response to the COVID-19 outbreak, container business earnings were weaker than expected," said Yang Ming in a statement.
Said Drewry analyst Simon Heaney: "We are seeing some countries starting to relax lockdown measures, but it is unlikely you will see an immediate return to business in the near term."
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Germany's Hapag-Lloyd reduces fuel surcharges in France
GERMAN shipping giant Hapag-Lloyd will revise its fuel surcharge for inland haulage under carrier arrangement from/to France, reports the American Journal of Transportation.
Truck fuel surcharges will fall from 14 per cent to 11 per cent from ports in France, Belgium, Netherlands and Germany from/to France, Monaco and Switzerland.
Rail and road fuel charges will fall from EUR6/CTR (container fitted) to EUR3/CTR from ports in France, Belgium, Netherlands and Germany for freight going from/to France.
Barge and road fuel surcharges combined will remain unchanged at 14 per cent for ports in Belgium, Germany, Netherlands from/to France.
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US trucking suffers most in the US transport virus downturn
US TRUCKING shipments were down 23 per cent year on year in April, according to Cass, with a 16 per cent drop month over month, according to the Cleveland Research Company's monthly trend analysis.
This reflects pre-COVID and COVID pull-forward, seasonally adjusted tonnage in March rose 6.2 per cent year on year, said the American Trucking Associations (ATA).
The three-month moving average was up 3.1 per cent year on year in March, up 0.9 per cent month over month. Expectations for 2Q and remainder of 2020 appear cautious given demand and capacity implications due to COVID-19, said the report
Overall truckload rates (contract and spot) were down seven per cent year on year in April (excluding fuel surcharges and assessorial fees), according to Cass Information Systems as capacity exceeds demand, but relatively flat month over month.
Total US and Canadian container imports were down three per cent year on year in April, according to PIERS, with imports growing one per cent for the year, lower than 2018's eight per cent growth rate (2017 was +4 per cent).
"May/June volumes will likely continue to see a negative impact from COVID-19 as blank sailings continue to be implemented amid cautious, limited forward visibility," said the Cleveland report.
During the past 45 days, spot market rates from Asia to the US west coast rose from US$1,500 to $1,750 due to capacity reduction and backlogged February orders. All-in rates are now 20 per cent above year ago levels (flat through April), according to the Shanghai Containerised Freight Index.
Rail volumes at CSX are down 22 per cent while Norfolk Southern volumes are down 30 per cent year on year. Primary categories lower year on year at CSX are coal, automotive, and intermodal. NSC's volumes declined due to less intermodal, coal, auto, and chemical volumes.
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Container traffic in Mexico declines 7.8pc in first quarter
PORTS in Mexico handled 1.61 million TEU in the first quarter, a year-on-year decrease of 7.8 per cent, according to Mexico's Secretariat of Communications and Transport (SCT).
The SCT announced that the Pacific ports, which trade mainly with Asia, registered the most significant decrease of 8.7 per cent with 1.08 million TEU. Port volumes in the Gulf/Caribbean area fell by 5.9 per cent to 525,420 TEU in the first quarter.
Analysts attribute the drop in cargo volumes to a reduction of import and export activity within the automotive sector, reported Seatrade Maritime News, Colchester, UK.
Manzanillo, the main port of the country, moved 704,453 TEU, down by 6.4 per cent, while the second largest port of Lazaro Cardenas saw volumes fall by 19.3 per cent to 275,928 TEU. Volumes at the third largest port of Vera Cruz shrank by 3.1 per cent to 263,633 TEU, while Altamira suffered a decline of 10.4 per cent to 198,037 TEU.
"If the Covid-19 situation does not extend too much, we expect an annual drop of six to seven per cent. So far, the current variation is directly linked to the Covid-19 situation," said a port operator.
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DP World Sokhna runs at top speed despite tight health restrictions
DP World Sokhna in Egypt says it is operating its port at maximum capacity to meet import requirements and to continue supporting the country's people and economy during the Coronavirus pandemic.
The gateway has an annual container handling capacity of one million TEU, with an upcoming capacity of 750,000 TEU with the opening of basin 2 in June 2020.
The port has been implementing safety measures and preventive actions to stop the spread of Covid-19 and protect the health and safety of its customers and employees, by following all processes and procedures that are in line with the recommendations of the Egyptian Ministry of Health and the World Health Organization (WHO), reported TradeArabia News Service.
DP World Sokhna has also been implementing an array of extra preventive steps to combat the virus. Information is shared with the staff on the importance of social distancing and increase awareness on hygiene standards. DP World Sokhna has also been distributing masks, gloves and sanitizers, it said.
"Over the past 10 years, we have positioned DP World Sokhna to be Egypt's leading port," said terminal chief Ajay Kumar Singh. "This puts us in a firm position of supporting the economy of Egypt."
DP World Sokhna has also made provision for the distribution of food supplies to be delivered to 1,200 families of affected non-regular workers in Suez. It will also continue its traditional 'Ramadan Boxes' of essential food supplies for workers' families during the holy month of Ramadan, he said.
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China-US air rates spike as virus hits and cargo capacity tightens
AIR and sea cargo rates have surged due to the coronavirus pandemic, with air freight prices from Shanghai to US and Europe quadrupling since the virus outbreak started, reports Nikkei Asian Review.
Aviation companies have massively cut back on air cargo operations, as passenger demand for flights have plunged in the wake of travel bans and quarantines. Cargo compartments of passenger flights typically carry 55 per cent of all goods sent by air.
Since the outbreak, aviation companies have been prioritizing the transportation of medical supplies, cutting availability for ordinary goods and causing prices to spike.
A sender now has to pay CNY70 (US$9.87) to send one kilogramme of goods from Shanghai to the US or Europe, more than four times the pre-coronavirus rate.
Japanese carrier All Nippon Airways said its freight services, which have been reduced by 30 per cent due to the suspension of many passenger flights, are running at full capacity. It stores face masks and other medical supplies on seats and in overhead baggage compartments in passenger planes leaving from Narita Airport near Tokyo.
Air cargo leaving Japan totalled 69,320 tons in March, down 25 per cent from a year earlier, according to the Japan Aircargo Forwarders Association. A fall in demand plus an even bigger decrease in capacity are the reasons for the decline.
Shipping capacity is also estimated to fall by 30 per cent because of landing restrictions and a shortage of seamen.
"There are delays of several days in transporting wheat and other grains on North America to Japan routes," an official at a major shipping company said. The official said it was difficult to draw up a rota of seamen as they were often banned from disembarking when they arrived at their home ports, including Vietnam and India.
Of some 120 countries, only 37 nations and regions, including Japan and the US, permit crew switches at their ports, according to a survey by Wilhelmsen, a global maritime industry group based in Norway. Seafarers are usually rotated off ships after three months or so, and a ship cannot set sail without a full crew, under global labour rules.
Maersk of Demark, the world's largest container vessel operator, suspended two of its 10 Asia-Europe routes over the April to June period. It will also stop some sailings on the remaining routes to cut overall operations by 30 per cent.
Jefferies, a US financial services company, forecast that the combined capacity of maritime shipping companies will fall by up to 30 per cent in the April to June quarter, up substantially from a drop of five per cent to 10 per cent in the previous three months.
Slower distribution is already hitting corporate strategies. For example, auto parts maker Yachiyo Industry has begun airlifting sunroof parts from China to Japan to cut shipping delivery time. But as the company has failed to secure enough airfreight capacity, it is facing delays in production.
Nintendo is also facing problems in the production of its hugely popular gaming console, the Nintendo Switch, in China due to delays in the delivery of electronic components.
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