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Coronavirus reduces global demand for containers

Coronavirus reduces global demand for containers

 

Danish shipping giant Maersk has predicted that shipping volumes will drop by as much as 25% in the second quarter of 2020 as a direct result of the impact of the current pandemic on global trade. Nevertheless, in a statement, CEO Søren Skou said Maersk is “strongly positioned to weather the storm”. Indeed, the firm posted a profit of US$197 million for the first quarter of 2020. 

Maersk announced that in the first quarter of 2020, it had cancelled more than 90 sailings, equivalent to 3.5% of total shipping capacity, to deal with the slowdown in trade and keep freight rates from falling. Moreover, the company expects to cancel around 140 sailings in the second quarter of the year.

 

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Global shipping stricken by coronavirus outbreak

Global shipping stricken by coronavirus outbreak, © Anthony Kwan, Getty Images

© Anthony Kwan, Getty Images

 

The coronavirus outbreak has taken a heavy toll on China’s shipping industry as a result of the lower output and trade. A report published by Danish maritime research group Sea-Intelligence highlighted the greatly reduced cargo flows between China and the rest of the world, with 50 sailings cancelled since January and 30 last week alone across the Pacific and to Europe. The Wall Street Journal reports that five European and Asian container ship operators are preparing profit warnings for the first half or the full year. This news comes as a great disappointment, especially as it had been hoped that the improved trading relationship between the US and China would result in an upsurge in business. The WSJ reports that at least one container ship with a capacity to carry over 20,000 containers left Shanghai for Northern Europe with only 2,000 full containers. “It will pick up more at ports on its way, but loading data show it will reach Europe around 35% full,” this broker said. “That’s unprecedented, and a lot of money is being lost because it doesn’t even cover the fuel cost.”

According to the report published by Sea-Intelligence, over 350,000 containers have been removed from global trade since the Chinese New Year. These woes are estimated to be costing the shipping sector around US$350 million a week.

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New port call in Pecem for fruit en route to Europe

Fruit shippers will benefit from a new port call in Brazil this year, thanks to an additional call announced by MSC Mediterranean Shipping Company.

MSC Mediterranean Shipping Company has announced a new port call in Brazil which it says will benefit fruit shippers.

From the start of this August to the end of January next year, its South America East Coast/North Europe service (NWC-SAEC I) will include a last port call at Pecem, in the state of Ceará, before sailing to Europe.

“The period coincides with the peak fruit season, and will be of particular interest for exporters of melons. Main destinations for this commodity, and other fruits exported on this route are Rotterdam and other ports in North Europe.

“Transit times from Pecem with direct calls: Antwerp 10 days / Rotterdam 12 days / Hamburg 14 days / Bremrehaven 16 days / Le Havre 18 days,” it said.

source: https://www.msc.com/

 

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Record freight volume for port of Antwerp

For the first time, the Port of Antwerp’s shipping container volume has risen above 10 million TEU

The port of Antwerp is set to end 2016 having handled a record volume of more than 214 million tons of freight.

And for the first time in its history, the shipping container volume has risen above 10 million TEU (twenty-foot equivalent units, i.e. standard containers), the port said in a press release.

“Liquid bulk is also showing year-on-year expansion and with an estimated volume of just under 70 million tons it’s the second main foundation on which freight growth in Antwerp is based.

“There are positive figures also in the conventional breakbulk and dry bulk sectors, although overall the totals for both segments are negative. The continuing trend towards containerisation has depressed the volumes of, among other things, fruit and paper.

“Meanwhile the volumes of coal and ore have fallen drastically in all North-West European ports,” it said.

Containers and breakbulk

The container volume rose 4.1% over the past 12 months and is expected to end the year at just under 118 million tons. In terms of the number of containers, this represents more than 10 million TEU (twenty-foot equivalent units), a 4.2% increase.

“With these excellent growth figures Antwerp has further expanded its market share in the Hamburg – Le Havre range. Antwerp has also managed to considerably improve its position in the Far East trade over the past few years, at the expense of its direct competitors Rotterdam and Hamburg.

“The situation among international container shipping companies has altered dramatically in the past few years, with companies entering into collaboration and forming alliances in order to achieve cost savings and efficiencies of scale.

“In 2017 the shipping scene will be dominated by 2M, Ocean Alliance and THE Alliance, making it more important than ever for ports to secure their place in the respective sailing schedules. So far Antwerp has managed very well in this respect.

“In the meantime the ro/ro volume has declined by 1.9%, totalling 4.56 million tons at the end of the 12-month period. This negative result is due to the performance on the export side, as ro/ro exports to Africa and the Near East are down 15% and 18% respectively. In fact exports to all countries around the Persian Gulf have dipped.

On the import side, however, the ro/ro volume is up by 9.5%.

“The conventional breakbulk volume for its part contracted by 2.4%, ending the year at 9.76 million tons. Steel on the other hand experienced strong growth of 12%, but the lower volumes of non-ferrous metals, paper & cellulose and fruit meant that the amount of conventional breakbulk was down overall,” it said.

Seagoing ships

The number of seagoing ships calling at Antwerp rose by 0.7% in 2016: by 31 December a total of 14,523 ships are expected to have visited Antwerp. Apart from the increased number of ships, the growth in gross tonnage is up 9.5% to 402.6 million GT.

“This figure illustrates well how ships visiting Antwerp are getting bigger and bigger: in 2016 Antwerp welcomed 458 container carriers of 13,000 TEU or more, whereas last year the number in this category was only 320,” the port said.

It said the above freight figures are provisional, with definitive ones expected in the second half of January.

Source of images and information: Port of Antwerp

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Produce speeds to Europe via sea-air transshipment in Miami

Crowley vice president Nelly Yunta is reported as saying the new service will be able to move perishable shipments to Europe in 4-5 days, allowing consumers to enjoy the fruit and vegetables at optimal freshness. There are hopes to later expand to more commodities and countries.

Fresh fruit and vegetables from Central America will reach Europe and Asia faster under a pioneer programme using Florida as an ocean-to-air transhipment hub.

The new alternative to sea-air transshipment through Dubai is being launched by Crowley Maritime Corp.and its customs brokerage subsidiary Customized Brokers.

According to American Shipper, the intermodal program – said to be the first known sea-air transshipment service in the US – aims to save shippers time and money and got a US government green light last month.

The pilot programme will see Customized Brokers coordinate the ocean shipment of fruit and vegetables from Guatemala and Honduras on Crowley vessels to Port Everglades, from where it will be trucked to Miami International Airport (MIA) for loading on KLM or Centurion Cargo freighters to Europe.

Crowley vice president Nelly Yunta is reported as saying the new service will be able to move perishable shipments to Europe in 4-5 days, allowing consumers to enjoy the fruit and vegetables at optimal freshness. There are hopes to later expand to more commodities and countries.

American Shipper reports Yunta said it took Florida-based Customized Brokers, in partnership with MIA officials, two years to get US Department of Agriculture (USDA) and Customs and Border Protection (CBP) approval because of concerns about potential pest infestation during the highway leg.

Measures introduced to address those concerns include packing pallets with insect-proof mesh and monitoring shipments from the farm until take-off in Miami, it said.

The process is said to be similar to one Customized Brokers uses for its air-land intermodal service for shipping asparagus from Peru through Miami and onto Canada by truck.


Peruvian asparagus service image above: www.crowley.com
Image of ship at top: facebook.com/Crowley/photos

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Port of Antwerp handling more freight this year

Increased containerisation has led to a lower conventional volume of fruit (down 26.5% to 377,418 tons) at the Port of Antwerp.

The volume of freight handled by the Port of Antwerp for the first 9 months of this year totalled 161.67 million tons – a figure up 3.3% on the same period last year.

In a press release, the port said its container volume for January-September saw growth of 4%, exceeding 7.5 million TEU and further expanding Antwerp’s market share for containers in the Hamburg-Le Havre range.

The container volume rose 3.7% to nearly 88.64 million tons. Ro/ro was down 1.9% at just under 3.4 million, while the volume of conventional breakbulk remained practically the same at 7.26 million tons.

“On the down side, increasing containerisation led to a lower conventional volume of paper (down 44.4% to 436,444 tons) and fruit (down 26.5% to 377,418 tons),” the port said.

Seagoing ships

The number of seagoing ships was up 1%, with the number of calls totalling 10,894 as at October 1.

“Not only was there an increase in the number of ships, there was continuing strong growth in gross tonnage. This rose by 11.3% to 301.66 million GT, demonstrating the trend towards ever larger vessels,” it said.

Photo: Antwerp Port Authority
 

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Barcelona: a port of reference for international logistics

Due to its excellent service, several international shipping companies have made a firm commitment to the Catalan port, designating it as the last stopover to load their ships, especially those destined for long-distance fruit export.

Until recently, Spanish fruit companies saw Europe as the main market focus, but the economic crisis and blockade on deliveries to Russia and other factors have created a new scenario forcing many companies to reassess and diversify their markets.

In this vein, the Port of Barcelona facilitates external trade for companies in the region, as shown by its traffic. Until 2007, the main volume of fresh produce traffic via the Catalan port was in imports, above all from the Southern Hemisphere with citrus at the forefront.

Since then, its fruit traffic in exports has seen great growth, almost reaching the same level as imports. “Exports continue to grow and the Port of Barcelona facilitates this process,” said the head of promotion at the Port Community, Manuel Galán.

With nearly 100 regular lines connecting the Catalan capital directly to over 200 ports on the five continents, Barcelona is the top port in the country for international traffic.

“The quality of Spanish fruit is appreciated in areas such as the Middle East. This is why we have a high frequency of voyages available, whether direct or with stopovers, with a transit time of 12 to 14 days,” Galán said. 

Furthermore, the close collaboration between the Port of Barcelona and the Italian shipping company Grimaldi is reflected in a wide range of short sea shipping services. An example of this is the increased connection between Barcelona and Porto Torres, which Galán said has made Mercabarna one of the main suppliers for Sardinia. 

“Our aim is to position ourselves as the main distribution hub in southern Europe. To do so, in the sphere of fresh produce we have a strategic partner in Mercabarna, the main wholesale market in Catalonia, which enables us to provide a competitive service tailored to our clients,” he said.

Common interests and aims have led to this solid alliance between Mercabarna and the Port of Barcelona, which in turn has led them to participate together in the major fairs in the sector such as Fruit Attraction in Madrid and Fruit Logisitica in Berlin, where they exhibit in a trio along with the Italian shipping company Grimaldi. 

In addition, the Port of Barcelona is working in collaboration with Mercabarna, Barcelona City Council and the company Ecoenergies on a project using the residual cooling generated by the regasification of Liquefied Natural Gas (LNG) to provide industrial cooling for Mercabarna’s refrigeration installations.

“This centralised cold network will enable CO2 emissions to be reduced as well as savings in energy and costs,” Galán said. GNL’s commitment to the Port of Barcelona also includes supplying this fuel to ships, trucks and port machinery in order to offer a competitive, sustainable alternative to their clients, as well as a more environmentally friendly energy solution. 

This article was originally published on page 37 of edition 145 (Sep-Oct 2016) of Eurofresh Distribution magazine. Read more from that issue online here: www.eurofresh-distribution.com/magazine/145-2016-sepoct 

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Maersk buys 14,800 ‘smart’ reefer containers

Boasting the world’s largest reefer fleet, with more than 270,000 containers, Maersk Line said the expansion of its reefer fleet aims to cater to its future growth in the reefer segment.

Maersk Line has ordered 14,800 new reefer containers this year, all of which feature built-in Remote Container Management (RCM) technology – a key component of its plan to offer enhanced supply chain visibility next year.

In a press release, Maersk Line said combined with the 30,000 reefers acquired in 2015, this will drive the average age of its reefer container fleet down to 7.9 years – well below the industry average of 12 years.

Boasting the world’s largest reefer fleet, with more than 270,000 containers, Maersk Line said the expansion of its reefer fleet aims to cater to its future growth in the reefer segment.

It is also part of the line’s investment in the latest technology in supply chain visibility and cargo care in order to enhance transparency and care for its customers’ perishable products, said Maersk Line’s head of reefer management Shereen Zarkani.

RCM technology turns each reefer into a digitally connected device. Speaking to the industry at Cool Logistics in Bremen, Germany, Zarkani said Maersk went live with the technology last year and plans to give customers access to this technology in 2017.

“Reefer visibility only makes sense if applied to the entire fleet…so with more than 270.000 reefers in operation it has been a massive undertaking to get to where we are today.

“Since we launched RCM in 2015 we matured our internal processes and gained operational experience in handling the data. We have now entered the next stage and will be ready to offer this enhanced data visibility to our customers in the coming year,” she said.

Maersk said key milestones it plans to reach before next year’s launch include a customer facing IT-platform and customer pilots.

Source: http://www.maerskline.com/da-dk/countries/int/news/news-articles/2016/09/maerskline-orders-14800-new-reefer-containers
Image:  https://twitter.com/MaerskLine/status/781031380893466624

 

 

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Reefer business explores opportunities

Thomas Eskesen, founder of the Eskesen advisory group, sees more opportunities than threats for the global reefer shipping business, he told the audience during the 19th European Cold Chain Conference, held in Amsterdam March 6-8.

Today’s global reefer shipping business is influenced by many different macro drivers. To name but a few, global population growth, climatological changes, currency exchange rates and food safety issues can all affect the global flow of goods and therefore the global shipping business. Among all these drivers, Thomas Eskesen, founder of the Eskesen advisory group, sees more opportunities than threats, he told the audience during the 19th European Cold Chain Conference, held in Amsterdam March 6-8. However a dose of realism for the current situation is not misplaced. While over 2001-2007, growth figures in the global container shipping industry were significant – an annual growth rate of over 10% was not uncommon – a decline started leading to negative figures in 2009. Back when expectations were high, a lot of new ships were built, now leading to overcapacity. The overcapacity calls for more realistic growth expectations. Growth is slowing down and thus changing the dynamics of the sector. Eskesen warned that experts are advising that we get used to a much lower growth path than in the past.

Back to “normal growth”

“Growth percentages of around 2-3% will be the new normal,” he said. However in the short term things look less solid. “The second half of 2015 has not been okay and 2016 will be the worst in history,” Eskesen said. In order to control the situation, shipping lines need to cut costs. The forming of alliances is one way to control costs. “For the first time there is a correlation between size and profitability,” Eskesen said. As a result, “in 2015 pretty much everyone is cooperating to increase scale.” He said mergers are happening now and will be happening more often in order to increase scale and reduce costs. The future will bring larger ships and fewer carriers. The increased scale and cost reduction do have implications. There will be less carrier differentiation and shipping lines are expected to further simplify their services. It may imply a different accessibility since the alliances will likely not call at all the same ports as the individual carriers did. Also an increase in food miles and longer journeys should be expected due to slow steaming, which costs less but take longer.

Thomas Eskesen, founder of the Eskesen advisory group

Intra-Asia trade will be huge

Yet one of the bright spots is the expected average growth of trade in containerised perishables. For the period between 2014 and 2019, annual growth of 3.3% for the perishable trade is forecast. This is more or less in line with the estimated growth in GDP. Although growth certainly is expected in reefer business, the demand knows geographic differences. Europe is definitely not the place where growth will take place in terms of imports. The trade into Europe from Latin America shows a decline. Also, due to increased demand from emerging markets, producers have more choice in where to sell their produce, giving them the possibility to choose less demanding markets. In that scenario, Europe, which is known for its more exacting quality and food safety requirements, could be left behind.

In terms of imports the Middle East and South Asia show the brightest figures – a CAGR of 5.9% between 2014 and 2019. Although growth is expected to slow down for Asia Pacific, it will remain the largest import region. In terms of perishable exports, a slowdown in growth is expected for all regions while Europe is the only region to see its market share rise. Brazil and Russia – once the promising B and R of the BRIC countries – seem not to be able to live up to previous economic expectations. Eskesen signals that currency issues – such as the strong dollar against the weak euro- can change the flow of goods, but in the long run currency impact is small. Of much more impact are trade barriers, like the ones affecting Russian trade. Eskesen identifies trade barriers as one of the lasting geographical key trends that will affect the shipping business. It is also why he is positive about the transatlantic trade openings the TTIP (Transatlantic Trade and Investment Partnership) could offer . Asia, on the other hand, is doing well, with India and specifically China as the success story. It is where the population growth – and increasing middle class – will be. It is also where retail is developing rapidly and it is –although to a lesser extent – where the economy is still growing. Significant growth into China is expected. It will be predominantly trading partners south east Asia and Latin America who will be responsible for the trade growth into China. “The intra-Asia trade will be huge and overall much more will be traded into Asia,” Eskesen said.

Emerging markets, traceability and transparency

Besides offering many opportunities, emerging markets can also pose challenges and bring about uncertainties. The cold chain in those markets is not yet very sophisticated and is therefore very expensive. Also surrounding food safety and the cold chain there is no global legislation in place. It remains to be seen how this will be shaped in countries like India and China and how enforcement will be arranged. Eskesen observes that investments in the cold chain in emerging markets are much needed but also very much dependent on legislation. “It will not stand a chance if the competition can work cheaper on lesser standards,” he said.

Traceability is another factor to be taken into account. “It is big and will even be bigger. We need to know what happens inside the box.” He said transparency is needed to change the industry. With regards to the cargo, carriers do have a big responsibility and more transparency would also offer more possibilities for analysis of a given situation. Definitely an uncertainty is the weather and the much discussed climatological changes are felt by the shipping industry. They signal that indeed the weather is getting more and more extreme, making business forecasting even more complicated.

All in all, the current state of the reefer business seems to show a mixed landscape but one where uncertainties, new developments and cost cutting measures can transition the sector towards growth.

MW

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New partnership between ports of Antwerp and Guangzhou

The Port of Antwerp said the twinning agreement also dovetails perfectly with the ‘One Belt One Road’ philosophy announced by China in 2013 which aims to improve connections between the main Chinese industrial cities and trade centres elsewhere in Asia, the Middle East and Europe.

Antwerp, the second-largest port in Europe, and Guangzhou, number 8 in the world, are to collaborate more closely under a twinning agreement signed on December 10 in the Chinese port city.

The two cities had already had a close relationship as under an agreement signed in 2010 between Guangzhou and the Port of Antwerp training centre APEC, various groups of shipping professionals from the Guangzhou port  have attended tailor-made courses at APEC. The twinning agreement will take the relationship between the ports to a new level and, among other things, include commercial collaboration.

For instance, there are currently two shipping services between North-West Europe and China calling at Guangzhou and Antwerp. “By developing a joint marketing approach the respective port authorities aim to get both ports included in several more loops,” the Port of Antwerp said in a press release.

Also, in collaboration with APEC and three other partners, a joint training institute under the name of Guangzhou-Antwerp Port Training & Consultancy Co. Ltd will be set up to offer courses in port operations for professionals from Asia, Africa and Latin America.

Other action points in the twinning agreement include the exchange of information on port development and best practices for sustainable enterprise in a port environment.

The Port of Antwerp said the twinning agreement also dovetails perfectly with the ‘One Belt One Road’ philosophy announced by China in 2013 which aims to improve connections between the main Chinese industrial cities and trade centres elsewhere in Asia, the Middle East and Europe.

It also said there are strong similarities between the ports of Antwerp and Guangzhou, both of which are located quite a long distance inland and multifunctional ports with excellent trimodal connections with a rich hinterland.

With an annual freight volume of 510 million tons including 16.63 million TEU, Guangzhou is one of the main container ports in China, acting mainly for transshipment of fuel stuffs, raw materials and commercial goods.

Image of Guangzhou skyline by jo.sau (Flickr) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons