/ By tjchinafreight ivy / Shipping

Asian owners have larger fleets than Europe

Clarksons Research Services, in its latest weekly report, highlights how Asian shipowners are finally reinventing their European counterparts to become the dominant force in global shipping.

European owners have historically had the largest share of the global fleet, with 44% of gt at the turn of the century, and Asian owners 32%.
Led by rapid growth in China, Asian shipowners overtook Europe last year, and looking at global orders, the gap will widen in the coming years. According to a recent report by Clarksons Research, by the end of 2021, Asian shipowners currently have a market share of 43% (48,472 ships, 637 million gt) of world fleet capacity in terms of gross tonnage, surpassing that of European shipowners. 42% market share of fleet capacity (30,610 vessels, 630 million gt).

Over the past decade, Chinese shipowners have increased their fleet gross tonnage from 111 million to 226 million and are now the second largest shipowner of all countries with a 15% global share. shipping goods in China

Asian shipowners now account for 43% of global tonnage, with 48,472 vessels totalling 637 million tons, according to Clarkson. This exceeds the 42% share of European shipowners, comprising 30,610 vessels with a gross tonnage of 630 million.

“The tonnage shift from Europe to Asia looks set to continue for some time, with almost half of the global order book (79m GT, 49%) going to Asia Pacific owners compared to 33% (53m GT) for European owners,” Clarksons pointed out.

Asia dominates many other aspects of maritime, including ports, shipbuilding and crew supply.

In addition, Asia's growing market share in global trade is driving a large number of newbuilding investments in many Asian countries, which will eventually lead to a significant increase in fleet capacity share.

It is worth noting that despite the fact that countries in the region have experienced some of the strictest epidemic prevention and control restrictions in the past two years, with borders effectively closed for two years, the growth of the Asian fleet has remained very strong during the pandemic. s level.

Take the shipping industry as an example. After the outbreak, the container shipping market rebounded rapidly from the second half of 2020 after a brief downturn. Due to the supply chain congestion caused by the epidemic, there is an urgent need for a large number of container ships in the market. During this period, Asian container shipping companies ordered 236 ships, with a total capacity of 1.81 million TEU. And the pace of newbuilding orders is still showing no signs of slowing down.

With the exception of Greece, fleet growth in other European countries has been relatively sluggish, or even reversed. Taking Germany as an example, the combined capacity of German shipowners fell by 34% to 62 million gt during the same period.

Clarkson also said that this trend will continue to develop. Because the current market share of newbuildings owned by Asian shipowners also accounts for nearly half - 49% (79 million gt), it is worth mentioning that the total capacity of Chinese shipowners' newbuilding orders has reached 29 million gt, 18% of the world share.

However, the newbuilding order capacity of European shipowners is currently only 53 million gt, and the share is only 33%.

/ By tjchinafreight ivy / Shipping

22,000 dockworkers may go on strike

In the Port of Oakland, California. The last time dockworkers' contracts expired, ports on the U.S. West Coast suffered months of disruption. Learn more about shipping services.

The International Longshore and Warehouse Union's contract expires at the end of June. For those whose livelihoods depend on the port—truck drivers, logistics companies, retailers—July 1 marks the beginning of a period of serious uncertainty.
The labor standoff could exacerbate floating traffic jams, leaving dozens of ships waiting in the Pacific Ocean before they can dock. That could exacerbate shortages and send already high consumer prices soaring.
Some port workers have accused dockworkers of fueling chaos at the port ahead of contract negotiations, increasing their leverage over terminal operators while hindering the flow of goods for everyone else.
"Every time a contract is signed, things slow down," said Anthony Chilton, 55, who drives a truck to move containers between ports and warehouses in Southern California. "We always blame the terminals. Workers. They slack off, take breaks, call in sick.”
Among those who work at the docks, such descriptions have provoked strong dissatisfaction. Dockworkers say they have no intention of slowing down or stopping the economically vital, physically draining and dangerous jobs they do without interruption during the worst pandemic in a century.

“Both sides are getting ready,” Mario Cordero, executive director of the Port of Long Beach, said in a recent interview from his office overlooking towering cranes and stacks of shipping containers , "It's an incentive because the whole country is watching.

As far as the negotiating situation is concerned, both sides appear to have sufficient advantages. For dockworkers, on the one hand, the long fleet of container ships outside the port has become their most powerful weapon. On the other hand, the full-time work of dock workers is very important to maintain the operation of the terminal and stabilize the ultra-high profits of the terminal company. At the opening of the new Pier (Pier 5) in Seattle on Jan. 7, Rich Austin, President of ILWV 19, said, "We've been working hard to improve our productivity over the past 5 to 6 years because we recognize that This is a very competitive industry and the number of containers handled per hour is important.” He also noted that the port employs a lot of temporary workers to support port operations.

For terminal companies, most of which are subsidiaries of the world's largest liner companies, the docker strike will have an impact on their supply chain operations. But recent pressure from the Biden administration to keep supply chains stable makes it likely that there will be government intervention in the negotiations, and the administration under US President Joe Biden has made it clear that it is ready to pass Regulation to optimize supply chains.
For terminal companies, most of which are subsidiaries of the world's largest liner companies, the docker strike will have an impact on their supply chain operations. But recent pressure from the Biden administration to keep supply chains stable makes it likely that there will be government intervention in the negotiations, and the administration under US President Joe Biden has made it clear that it is ready to pass Regulation to optimize supply chains.

Beyond that, if the strike takes a toll on the U.S. economy, it won't do the dockworkers themselves any favors.

Dockworkers are among the highest-paid blue-collar workers in U.S. industry, but they argue that this is what they get at risk of their lives. The so-called Class A dockworkers, who have pensions and benefits, as well as regular hours, typically earn more than $100,000 a year. Even "temps" -- those guaranteed no shifts -- start at more than $32 an hour.

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/ By tjchinafreight ivy / Shipping

New tolls for the Panama Canal will affect these ships

The Panama Canal Authority (PCA) is proposing a new containership charging scheme that would, for the first time, charge for empty containers returning to Asia. The plan will also increase tolls for other types of laden and empty container ships. Get a sea freight quote

In addition to the empty vessel charges, the proposal calls for a fixed fee for each passage of the vessel, based on the locks used and the size of the vessel, which would run until 2025.
The proposal also proposes to levy a capacity fee based on the type and size of the vessel. Under the proposal, the loyalty program created in 2016, which originally encouraged ship operators to use the canal's Neo-Panamax locks, will now be reduced from Category 6 to Category 1 eligible vessels. It is reported that the loyalty program will be phased out by 2025. According to data from the Canal Authority, 55% of the tonnage of ships passing through uses the new locks.

Marotta said the current fee scheme was "a very complex system". "The goal is to make it simple and transparent."

Marotta said the toll will help fund a $2 billion project where authorities plan to build additional reservoirs to supply fresh water to the canal, which has been dealing with traffic restrictions due to low water levels. In 2020, authorities imposed a surcharge on ships related to the water level of the canal, which many believe has been affected by climate change.

The current container ship charging system has been in place since 2017 and charges are assessed based on vessel capacity and the actual number of containers loaded.

Changes in toll charges could significantly affect those on long-term charter contracts on the US Gulf-East Asia route, as the canal is the most convenient link between the two markets in the US and East Asia.

In December, the Canal Authority said it wanted the charges to reflect changing market conditions, including increased global demand for LNG. The Canal Authority also said it would communicate more directly with market participants on how to ease congestion. Congestion caused some LNG carriers in line to be diverted to the Cape of Good Hope last fall. The Canal Authority said the maximum wait times for unscheduled LNG carriers to pass through the canal were 5 days (northbound) and 3 days (southbound). In the future, ships that do not meet IMO emission standards may face additional costs during peak winter energy demand periods.

/ By tjchinafreight ivy / Shipping

Maersk and GCT settle NY dock berthing deal

Maersk and terminal operator GCT New York have settled a two-year lawsuit involving the transfer of three Maersk vessel services from GCT to APM Terminals in Elizabeth, NJ.

Learn more about sea freight.

On Monday, lawyers for both sides filed a letter to the judge hearing the lawsuit, saying they plan to file a joint motion to dismiss the case. About a month later, lawyers for GCT New York filed a motion for summary judgment against Maersk, alleging the ocean carrier had "willfully breached" its terminal service contract and issued a settlement notice.

Terms of the settlement were not disclosed.

GCT New York, operated by Global Container Terminals, filed a lawsuit against Maersk in New York federal court in April 2020 over Maersk's decision to transfer the service of three vessels that have docked at Staten Island since 2015 to Maersk-owned APM Terminals . near Elizabeth, New Jersey.

GCT New York filed a lawsuit against Maersk on April 20, 2020, over the termination agreement, arguing that the agreement was announced 20 months before the agreement termination date.
In a statement to our publication, the port operator explained that it sought special remedies from the court in the form of an expedited preliminary injunction to avoid termination of disruption to labor, operations and other consequences.
GCT has been fighting Maersk's decision, fearing it would plunge it into a loss and cost the port operator more than 100 jobs.
The deal between the two was first established in 2015 and has since been extended several times.
Maersk announced the move in early April, explaining that the shift was aimed at achieving greater operational efficiency following a recent $200 million upgrade and expansion at APM Terminals Elizabeth.
A company spokesperson confirmed to Offshore Energy that the court rejected the restraining order on Friday, April 24, 2020, allowing Maersk to terminate the agreement from May 1.

Maersk offers termination fee
Maersk argued that it could exit the GCT deal through a clause in the contract that allowed for a termination fee based on expected volume. Maersk said in an April 2020 letter to GCT that it would pay $5.4 million to resolve the dispute.

Despite the loss of those services, GCT New York, like other terminals, has seen its fate amid a surge in U.S. imports over the past 18 months. According to the Port Authority of New York and New Jersey, rents and container throughput at GCT New York are up 53% in 2021.

The available berth space at GCT New York is one reason the port was able to handle more ships and cargo last year. Independent airline Wan Hai Lines launched its Asia-US East Coast route earlier this year and added a second Asia route called GCT New York. MSC has also switched the Asia-West Coast route to GCT New York.

/ By tjchinafreight ivy / Shipping

Freight rates on the US Eastbound routes have risen!

In order to avoid the uncertainty brought about by the labor negotiations at ports on the west coast of the United States, many American importers continued to choose the route calling on the east coast of the United States, which pushed up the container freight rate of the east coast of the United States and further strengthened.
Congestion at East Coast ports is increasing, and the situation is likely to increase further in the short term as more ships arrive.

"The high-end market is starting to pick up again, especially given the diversification of the U.S. West Coast at this time," said a U.S. logistics provider. "Queues at U.S. East Coast ports are starting to build up, so it's getting pretty tricky to ship from the U.S."

Heard that the US West Coast has premium booking rates as high as $16,000/FEU, while the US East Coast remains premium. Spot bookings are said to be as high as $17,500/FEU, not far from the peak at the end of 2021, when prices were in the $20,000/FEU range.

As in other regions, the real problem in the market is not sea freight, but inland logistics shortages. A lack of chassis and railcars is preventing importers from moving cargo from ports to inland distribution networks.

However, premium rates are not only seen in the trans-Pacific region. Conditions at European ports have deteriorated, with cargo delays prompting some premiums on transatlantic routes to continue or even grow.

"There are serious delays in Europe right now, so we're starting to see some premiums in the transpacific start to pick up," said a U.S. freight forwarder. "The level isn't high, but people pay a price for fast shipping or they end up at the bottom of a growing stack."
These premiums were heard in the $8,500/FEU region for North European to North American East Coast cargo.

In the week ended March 25, the average freight rate for the Southeast Asia-US East route was 17,000-18,000 US dollars/FEU, and the Southeast Asia-US West route was 15,000-16,000 US dollars/FEU, the same as a week ago, but there are some quotations grow rapidly.

On March 25, the freight rate of PCR 25 (Platts Container Freight 25 Index, Southeast Asia-North America East Coast Route) was estimated at US$10,500/FEU, and the freight rate of PCR 23 (Southeast Asia-North America West Coast) was estimated at US$9,500/FEU , which was basically the same as the previous week.

The index of freight rates on the India-Middle East short-haul route rose due to higher bunker fuel costs and increased supply chain uncertainty. On March 25, the freight rate of PCR 33 representing the India West Coast-Middle East route was estimated at US$2,300, up US$200 from the previous month.

/ By tjchinafreight ivy / Shipping

Russian ships under sanctions change flags in large numbers

In March, an unusually high number of ships abandoned their Russian flags and re-registered with countries such as the Marshall Islands and St. Kitts, according to data provided by maritime risk consultancy Windward AI.

Russian ships in trouble

A total of 18 ships were re-flagged last month, according to Windward, more than three times the normal rate of 5.8. Five of the ships were linked to Russian ownership. Among them are 11 ships from the same fleet, all of which have been changed to the Marshall Islands flag, and three tankers have been changed to the flag of St. Kitts and Nevis.

Five of the 18 ships that changed flags had direct links to Russian owners. The level of Russian re-flagging in March was more than three times the average, the first time since January 2020 that the monthly number of re-flagging reached double digits.

The U.S., U.K. and other allies have stepped up sanctions on Russia due to the Russian-Ukrainian war that began in late February. U.S. President Joe Biden issued an executive order on March 8 banning imports of Russian oil and gas, and Britain also said it would phase out oil imports by the end of the year. In addition, several countries have banned Russian ships from entering their ports.

From yachts as small as multi-million dollar yachts to oil tankers, Russian ships are already in trouble. The identification and position transmission system AIS, which was supposed to be on all the time at sea, has also been turned off because it avoids detection but poses a risk to maritime safety.

But not all flag changes are necessarily sanctions evasion. The trend could also include "honest businessmen trying to continue business as usual without the potential obstacles that the Russian flag could pose for them," the report said.

Gur Sender, product manager at Windward, said foreign companies have different motivations for changing the flag of Russia, some want their ships to be able to operate around the world without restrictions, and that sea freight is an important method of transporting goods, but others are for ethical reasons.

Changes to flags are not necessarily abnormal, and are sometimes due to changes in ownership or area of ​​operation, Sender said. Singapore will have an average of 17 flag changes per month in 2021, while Japan will have an average of 5 flag changes per month this year. But their levels are all stable without big fluctuations.

A large number of Russian flag switches have appeared in other unusual activities, such as Russian tankers shutting down their tracking systems. Both tactics were included in a May 2020 U.S. Treasury Department bulletin that listed seven categories of fraudulent shipping practices.

"Bad actors may forge the flags of their vessels to conceal illegal trade. They may also repeatedly register ('jump the flag') with a new flag state to avoid detection," the advisory warned.

/ By tjchinafreight ivy / Shipping

Seaspan plans to expand investment in container ships.

 

In the past two years, the container shipping market has been hot. Although Seaspan, as the world's largest independent container ship owner, could have sat down and reveled in the high income, sufficient customers and long-term leases, due to the rapid development of the shipping industry, the The company still plans to expand its investment in container ships.

The Vancouver-based, Hong Kong-registered, Atlas Corporation-owned company has been growing at a record pace over the past year and a half. Its latest financial statements for 2021 confirmed that the company's cash flow was very solid, with a profit of $400 million in 2021, double the previous year. The leasing business added 70 newbuildings, or about 0.9 million TEU, and new contracts generated total cash flow of up to $12.9 billion.

Like the big liner companies, Seaspan is building a very strong capital pool. There is no doubt that investing in new projects is very easy for Seaspan. If a bank needs it to guarantee a loan, Seaspan can easily find a recent lease with a major liner company, which can last up to 18 years.

That said, Seaspan will still have an exceptionally strong funding position until 2040, even if the hot container market cools one day.

Seaspan and its shareholders want uninterrupted returns through continuous investment like a shipping company. Many large liner companies use their profits to invest in logistics assets. For example, Maersk bought LF, MSC bought Bolloré's African business, and CMA CGM bought Ceva.

But considering that the customers of these profiteers are now helpless to pay sky-high freight costs and endure long delays, in this case, shipping companies rely on their special tax incentives and use their high profits to acquire Another industry has exacerbated the negative sentiment in some parts of the supply chain market to a certain extent. Seaspan needs to study how to play a long-term "ship owner and operator" in the container shipping industry. business to best serve customers.

The issue has been discussed within the company for some time, but according to COO Torsten Pedersen, there is no final conclusion yet. But in general, the company aims to further strengthen its position in global value chains, including beyond 2025.

Ensuring a role in decarbonisation may be an option, but it may also be other activities, and opportunities abound in the chaotic container market.

“The industry is currently undergoing major changes, and the competitive environment is very different from a few years ago. Some links may be squeezed in the new structure, and there will be many strategic moves and counter-attacks in the industry. Huge market changes can provide many creative opportunities, we Think it's an exciting challenge."

"It's a good thing that Seaspan has a strong financial position" amid the boom in the container market, Pedersen said. Seaspan is currently achieving its stated goals. The company has struck deals with operators to build around 70 new ships over the next two or three years.

Concluding comments on the shipping industry, he said: "We have strong partners and long-term contracts, and our partner yards have a long history of shipbuilding. This is an industry that will be heavily funded in the next few years and the landscape is changing."

/ By tjchinafreight ivy / Shipping

Subtle changes in supply and demand, freight rates drop one after another

Supply and demand conditions improved, and freight rates continued to fall. There are many uncertain factors, and the future trend is still unclear.
Recently, the freight rates of major routes in the container shipping market have changed the pace of rising and have continued to decline in the past month. Even so, since the high freight rate in the fourth quarter of last year continued to the first quarter of this year, the current freight rate is still much higher than the same period last year.

Multi-route freight rates drop

According to Drewry data, as of March 17, the World Containerized Freight Index (WCI) was US$8,832.23/FEU, down 3.8% month-on-month and still up 79% compared with the same period in 2021.

In terms of routes, the Shanghai-Rotterdam spot freight rate was US$12,221/FEU, down 4% month-on-month; the Shanghai-Genoa spot freight rate was US$12,619/FEU, up 1% month-on-month; the Shanghai-Los Angeles spot freight rate was US$10,154 /FEU, down 7% month-on-month; Shanghai-New York spot freight rate was US$12,276/FEU, down 5% month-on-month.

On March 18, the China Export Container Freight Index (CCFI) released by the Shanghai Shipping Exchange was 3301.10 points, down 1.9% from the previous month. Among them, the freight index of European routes decreased by 1.9% month-on-month, the freight index of Mediterranean routes decreased by 0.5% month-on-month, the freight index of US-West routes decreased by 3.8% month-on-month, and the freight index of US-East routes increased by 2.1% month-on-month.

According to the Ningbo Export Container Freight Index (NCFI) released by the Ningbo Shipping Exchange, as of March 18, the composite index closed at 3,613.9 points, a month-on-month decline for 11 consecutive weeks, down 15.3% from the high level at the end of December 2021, and from the end of February. It fell 8.4%.

Judging from the situation of different routes since the end of February, the freight index of the South America east route decreased by 19.3%, the freight index of the South American west route decreased by 16.7%, the freight index of the Middle East route decreased by 17.6%, the India-Pakistan route decreased by 13.7%, and the freight index of the European route decreased by 13.7%. The price index fell 11.7%, the most significant decline. The average market price of the 40-foot TEU after the price increase in the Europe, South America East, South America West and America West routes fell by more than US$1,500/FEU, and the freight rate fell the most. It can be seen that, in the past month, although the freight rates of some routes remained flat or increased slightly month-on-month, in general, they showed a downward trend.

As far as the single-day freight rate is concerned, in early March, the freight rate trend showed a clear inflection point.

According to Xeneta data, recently, freight rates from China to Europe suffered the largest one-day drop since February 2020. On March 1, the average spot rate on the route fell by nearly $500/FEU to $13,340/FEU. This is the first time since September 2021 that freight rates on this route are below $13,500/FEU.

However, the agency also pointed out that the current freight rates on the Asia-Europe route are still at a very high level compared to before the COVID-19 outbreak. In 2018-2020, the average spot freight rate on this route was only US$1,500/FEU.

Based on this, Zheng Jingwen, a senior analyst at the International Shipping Research Institute of the Shanghai International Shipping Research Center, said in an interview with a reporter from China Shipping Weekly that according to the trend of previous years, the freight rate will indeed drop slightly and briefly in the first quarter.

Qian Hanglu, an industry analyst at Ningbo Shipping Exchange, also said: "This is mainly due to the traditional off-season, which makes the overall freight rate of the container shipping market continue to decline from mid-January to late March. For example, in 2019 In 2021 and 2021, the NCFI composite index has experienced a 10-week decline, with a cumulative decline of 25.7% and 19.4%, respectively."

/ By tjchinafreight ivy / Shipping

Huiyang Shipping’s first-quarter profit tripled year-on-year

The crisis in Russia and Ukraine pushed up the freight rate of bulk carriers, and the performance of Huiyang Shipping in March and the first quarter both hit record highs.

On April 6, Huiyang Shipping announced its financial report. The revenue in March was NT$2.203 billion (approximately RMB 486 million), and the self-settled operating profit was NT$1.139 billion (approximately RMB 251 million). The monthly pre-tax profit was NT$1.175 billion (approximately RMB 259 million).

The financial report shows that in the first quarter, Huiyang Shipping’s revenue was NT$5.754 billion (approximately RMB 1.269 billion), and its pre-tax profit was NT$2.777 billion (approximately RMB 612 million), three times that of the same period last year. , a record high for the same period of the previous year, with an average operating profit rate of 48%.

Huiyang Shipping said that the global dry bulk shipping market is still affected by the crisis in Russia and Ukraine. At present, due to the surge in oil prices and the transfer of raw material importing countries to other countries for procurement, the voyage has increased. These factors may increase the freight rate. However, whether the demand for raw materials is It can be fully supplemented by other regions, and the impact of subsequent economic sanctions by various countries still needs to be continuously observed.

On the other hand, the epidemic in mainland China heated up again in late March, and the first-tier cities along the coast were shut down due to epidemic prevention, resulting in a slight decline in the market volume. However, Huiyang Shipping believes that this is a short-term impact, and there is a possibility of demand recovery sex.

In terms of fleet planning, Huiyang Shipping received the 37,800-dwt handy-sized high-specification energy-saving and environmentally friendly bulk carrier "Bunun Treasure" delivered by Imabari Shipbuilding in Japan at the end of March, and has signed a stable charter. Up to now, the company's fleet operates 139 ships, with an average age of 7 years. The fleet size and the proportion of energy-saving ships are in a leading position in the industry.

Looking forward to 2022, Huiyang Shipping still maintains an optimistic attitude. Due to the rising freight market and raw material prices in recent years, the construction cost of bulk carriers has increased by about 30%-40% on average compared with the same period last year. The number of orders on hand for cargo ships is still low, and after the new environmental protection regulations hit the road in 2023, it is expected that the elimination of old ships will make the supply of capacity even tighter, and Huiyang Shipping maintains a consistent and stable ship purchase policy, which will give it a more competitive advantage.

/ By tjchinafreight ivy / Shipping

German retail giant Lidl sets up its own shipping company

Lidl, part of the Schwarz Group and one of the world's largest retailers, launched its own container shipping company to tackle supply chain challenges, reduce delays in product deliveries and avoid high shipping costs.
Wolf Tiedemann, CEO of Lidl Stiftung & Co. KG, confirmed the establishment of the new shipping line to German media outlet VerkehrsRundschau, commenting: "The goal is to be able to manage the increase in different production facilities more flexibly in the long term."

According to local media reports, Lidl has submitted an application to the European Trademark Office to register a shipping company named Tailwind Shipping Line, whose business scope is cargo transportation, including sea, air and import and export cargo handling.
If the plan goes well, Lidl said it would be able to operate its own supply chain and address high freight rates and congestion in port and landside transport.
However, Lidl has not disclosed which routes Tailwind Shipping Line plans to open and which types of ships it will use, which does not rule out the company buying ships to build its own fleet.

Notably, news of Lidl's foray into the shipping industry was first reported by German media on April 1. An industry insider said at the time that the report was an "April Fool's joke". However, the move has been confirmed by local shipbrokers - Lidl's plans are real.

In fact, as early as 2021, Lidl planned to invest in a container shipping business to better control the supply chain, but it has not been able to materialize.
A fast-growing German retailer, Lidl currently operates more than 11,000 stores worldwide and employs more than 310,000 people.

In fact, big shippers have been trying to build their own supply chains to move goods more quickly.
In the second half of 2021, due to the continued shortage of space and containers in the container shipping market, major European and American cargo owners, including IKEA, Wal-Mart, Home Depot, and Amazon, have begun to charter their own ships to transport goods, and more and more cargo owners have followed suit.

For this approach, some industry insiders have analyzed that for those large cargo owners who urgently need to transport goods, although chartering their own cargoes looks very attractive, they are also faced with uncertain risks in the market, and thus resulting losses.
However, these shippers often choose to work with freight forwarders. So far, no shipper has developed its own shipping brand.