in Freight News 30/11/2022

India’s finished steel imports from Russia during April-October rose to their highest in at least four years, government data compiled by Reuters showed, underscoring Moscow’s bid to divert shipments in the wake of Western sanctions.

Russia’s steel exports to India reached 149,000 tonnes in the first seven months of the current fiscal year that began in April, up from around 34,000 tonnes shipped a year earlier.

Russia accounted for just about 5% of India’s total steel imports but was among the top five exporters.

India’s total steel imports between April and October stood at 3.2 million tonnes, up 14.5% from a year earlier. South Korea exported 1.3 million tonnes to India, accounting for a 41% share of the country’s total purchase.

Between April and October, India emerged as a net exporter of steel, even as overall shipments more than halved due to an export tax and a slowdown in global demand.

Earlier this month, India scrapped the export tax levied on some steel intermediates, reviving expectations of a turnaround in exports.

JSW Steel Ltd, India’s largest steelmaker by capacity, said six to seven distressed Russian steel shipments arrived during the current fiscal year. Other than buying large quantities of steel from Russia, Indian firms have also been importing coking coal from Moscow.

Indian steelmakers have so far imported record 5-6 million tonnes of Russian coking coal in 2022/23, compared with less than 2 million tonnes last year.
Source: Reuters (Reporting by Neha Arora; Editing by Mayank Bhardwaj and Subhranshu Sahu)

 Sam Chambers November 29, 2022 Splash 247.com

Mediterranean Shipping Co (MSC) has taken delivery of its first MSC-branded aircraft, built by Boeing and operated by Atlas Air. The B777-200 freighter will fly on routes between China, the US, Mexico and Europe.

Jannie Davel, senior vice president air cargo at MSC, said: “Our customers need the option of air solutions, which is why we’re integrating this transportation mode to complement our extensive maritime and land cargo operations. The delivery of this first aircraft marks the start of our long-term investment in air cargo.”

Davel brings extensive air cargo experience, having worked in the sector for many years, most recently heading Delta’s commercial cargo operations, before joining MSC in 2022.

He said: “Flying adds options, speed, flexibility and reliability to supply chain management, and there are particular benefits for moving perishables, such as fruit and vegetables, pharmaceutical and other healthcare products and high-value goods.”

Atlas Air is supporting MSC on an aircraft, crew, maintenance and insurance (ACMI) basis. This aircraft is the first of four B777-200Fs in the pipeline, which are being placed on a long-term basis with MSC.

Other top lines such as CMA CGM and Maersk have created air cargo divisions during container shipping’s recent record earnings period.

 Sam Chambers November 29, 2022 Splash 247.com

The stock markets in Hong Kong, Shenzhen and Shanghai closed up today as Beijing cracked down on nationwide protests and gave an indication that it was going to up its vaccination programme among the elderly, seen as a key hurdle in the opening up of the country post-pandemic.

The country had experienced anti-zero covid protests in many major cities in recent days, rallies on a scale not seen since the Tiananmen Square massacre of 1989.

However, a very heavy police presence at hotspots over the past 24 hours has quelled the protests.
China’s health authorities released a plan to boost elderly vaccination today, according to a notice on the National Health Commission’s website. At a press briefing this afternoon, health officials stressed excessive covid restrictions should be avoided.

The shipping industry – whether in tankers, dry bulk or containers – is anxiously watching news of an easing of covid restrictions to boost the economy, which is on track to grow at just 3% this year, its slowest growth for decades. The nation is by some considerable distance the most important country in the world for the fortunes of the shipping industry.

“The mood among investors has improved in today’s trading environment as protests in China have eased and suggestions that the country is looking at ways to ease the current strict Covid rules,” the latest daily markets update from chartering platform Shipfix suggested.

Goldman Sachs said yesterday that the nation may have a messy, but earlier-than-expected exit from its zero covid policy.

November 25, 2022 Container News

Martina Li, Asia Correspondent

Further slides in the Shanghai Containerized Freight Index (SCFI) are continuing, and it is expected that in December, freight levels will be at pre-pandemic levels.

On 18 November, SCFI stood at 1,307 points, plunging 74% from an all-time high of 5,110 points on 7 January, and bringing the index near the 1,000 points seen in January 2020, just before the Covid-19 crisis erupted.

Shanghai-North Europe freight rates, having peaked at US$15,600/TEU on 14 January, dived to US$2,350/TEU on 18 November. On the same date, Shanghai-US West Coast rates fell to U$1,550/FEU, from a high of US$8,100/FEU in February. Shanghai-US East Coast routes lost 67%, from a high of US$11,800/FEU in January to US$3,900/FEU on 18 November.

Declines were also registered for shipments from Shanghai to the Persian Gulf, South America and Australia.

The all-time high rates are not reflective of what shippers actually paid, as tight container availability compelled them to pay premiums to be assured of slots.

The chief cause of the weakening rates is a drastic fall in headhaul cargo demand, a trend going back to August.

Global inflation, spawned by rising energy prices following Russia’s invasion of Ukraine in February, has discouraged consumer spending. In turn, retail sales have been sluggish, resulting in warehouses in Europe and the United States becoming full.

Container Trades Statistics show a massive drop in the Far East – North America volumes of 25% in September. Volumes shipped from Asia to Europe are also estimated to have plunged 20% in the same month. The usual Q3 peak effect of extra shipments at the end of September before the Golden Week holidays in China in the first week of October did not materialise this year.

 Sam Chambers November 23, 2022 Splash 247.com

Much has been written about the fleet expansion at Gianluigi Aponte’s Mediterranean Shipping Co (MSC) during container shipping’s boom era. Since August 2020 the Geneva-headquartered liner has bought more than 250 secondhand ships, as well as building a 1.7m teu orderbook, a period of expansion on a scale never seen before in any commercial shipping sector. This period of expansion also saw MSC surpass alliance partner Maersk at the top of the liner rankings at the start of the year.

Putting some perspective on MSC’s expansion, its orderbook today is roughly the same as the entire extant fleet of Hapag-Lloyd, the world’s fifth largest liner. Putting its extreme sale and purchase activity in context, Alphaliner data shows that the number of MSC purchases since August 2020 are greater than the next seven largest buyers combined.

While historically MSC, whose roots date back to 1970, has had a strong focus on chartering in ships, this has changed during liner shipping’s record earnings period of the last couple of years. Since the start of 2020, MSC’s share of owned ships increased to 69% from 51%, according to Linerlytica.

Last month MSC agreed to acquire 100% of the share capital of towage operator Rimorchiatori Mediterranei. In September the carrier debuted MSC Air Cargo, something that will take to the skies from early next year. The cash-rich line has also bought many other assets including Bolloré  Africa Logistics and Log-In Logistica.

Originally hailing from Naples, the secretive Gianluigi Aponte has amassed a personal fortune of as much as $100bn, Swiss media reported last month, firmly putting the family as the richest in Switzerland, three times as wealthy as the second-placed family.

If the $100bn wealth was confirmed that would place the Apontes in sixth place on Forbes rich list, nestled between Bill Gates and Warren Buffett.

in International Shipping News 21/11/2022

While there was a shortage of containers at the height of the pandemic, the global economy is now facing the opposite problem: too many containers. On top of falling freight rates, data shows container depots — used to house containers after they are unloaded — are now filling up or full. It points to more signs of falling global demand and an impending economic slowdown.

Traders and shippers say the decline in global consumer demand is not a sign the global economy is normalizing after a frantic post-lockdown consumption rush but a downwards shift in consumption appetites.

“There is just not enough depot space to accommodate all the containers,” online container logistics platform Container xChange chief executive Christian Roeloffs said in an industry update this week.

“With the further release of container inventory into the market, for example from the disposal of leasing fleets, there will be added pressure on depots in the coming months.”

Turning away new clients
Italian container depot owner Sogese chief executive Andrea Monti told Container xChange his depots are full.

“Whatever was coming in and out of, for instance, our Milan depot is quite stuck. And the container volume at the depots is increasing to an extent that we are returning some requests for depot service agreements.”

“We are in a situation where we are not able to accept new clients for some locations.”

Monti told Container xChange that the peak season of goods shipments — as Christmas looms — “technically did not happen this year.” Retailers are cautious about the high level of inventory they have on hand, Monti said.

“There is enough inventory with retailers,” Monti said.

“What has happened now is that the cargo is ‘on time’ again and hence you’ll see a slowdown in new ordering as companies adjust to more efficient turnaround times in ocean freight delivery.”

To combat full and overflowing depots, ports such as the Port of Houston have started levying fees for empty containers sitting in terminals for more than seven days, according to global claims management provider Sedgwick’s national marine manager Darin Miller.

“What many don’t realize is a lot of the time, the containers within the depots are empty,” he told CNBC.

“Often left sitting for weeks on end, the sheer number of containers on ships or at ports, leaves us with insufficient depot space which only exacerbates our ongoing supply chain crisis as it impacts container repositioning and movement.”

Consumers can expect retailers to offer discounts in order to clear inventory, Miller added.

The latest Drewry composite World Container Index — a key benchmark for container prices — has fallen again to $2,773 per 40-foot container. That’s 73% lower than the peak rate in September last year.

Sailings canceled
Blank or canceled sailings are also on the rise in what is usually the opposite, as the year’s biggest spending period approaches.

A blank sailing happens when a shipping company decides to skip a port or an entire leg of its schedule to manage changes in demand and capacity.

In its latest canceled sailings analysis, Drewry said between late November and early December, 14% of sailings have been canceled across major container shipping routes.

Last week, major shipping group Maersk warned during its third quarter results that freight rates have peaked amid easing supply chain congestion and falling demand. The company told investors to expect lower ocean shipping profits.

Nearly 60% of the 200 freight forwarders, traders and shippers that Container xChange spoke to in a survey last month said they were grappling with geopolitical, economic and political risks which have imposed downward pressures on consumption and therefore demand for containers.

“We know already that the market is bearish on consumer demand because of multiple factors like recessionary fears and inflationary risks,” a Container xChange spokeswoman told CNBC.

“So of course, there is a significant dent in consumer demand which then leads to less demand for freight and cargo, and therefore, a proportionate dent in container demand globally.”

Shippers are giving containers away to reduce crowding at depots while many have resorted to blank sailings, Container xChange added.
Source: CNBC

Yara Marine Technologies

While many see scrubbers as a minimal investment to comply with emission regulations, Aleksander Askeland, Chief Sales Officer (CSO) of Yara Marine Technologies (YMT) suggests that they may be a mainstay within the industry as fuel uncertainty continues to loom.

Aleksander Askeland | Nov 17, 2022 – Seatrade Maritime News

It is clear that emission reduction is a priority for ship owners and operators. We can see evidence of this in the fact that the market has been significantly impacted over the last few years by a global pandemic, a great deal of geopolitical instability, and the rising price of fuel, and yet the industry has continued to make significant investments in emission reduction measures and technologies.

Scrubbers have formed a vital part of this process, with Bimco indicating that the number of scrubber-fitted vessels doubled between January 2020 and March 2021. In certain sectors, this number is likely to rise even more sharply, such as the containership sector where Bimco estimated that 71% of newbuilds would come with scrubbers already installed onboard.

Forewarned is forearmed

It’s easy to assume this sort of investment is simply a response to the International Maritime Organization’s (IMO) Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII) regulations – which will come into effect in only three months – or the EU’s regional emission trading scheme (ETS) which also comes into effect at the start of 2023. But we need to keep in mind that ship owners and operators are used to evaluating the landscape of shipping, including incoming regulations, and ascertaining the best ways in which to balance that with efficient operations. And that’s true of this moment as well – scrubbers grant ship owners and operators the flexibility they need to use cost-effective, existing fuels without compromising on greener operations.

I emphasize this because we need to think realistically about the coming eight years to our 2030 targets for emissions. Alternative fuels will require time to assess availability and construct infrastructure, particularly as a lot of discussions around this fact by global leaders is mostly considering production to be used for land-based enterprises; we cannot be sure how much of the production of future fuels is allocated to maritime simply from current global commitments to greening at venues like COP26 or COP27. With this in mind, shipping needs to have its own assessment of what a viable timeline looks like, and a plan for how we make our targets workable in the interim until that point.

Looking to the future

This is where having flexibility and scrubbers is simply essential, allowing compliance with regulations to also meet market need and environmental goals until we can transition all vessels to Net Zero. Existing infrastructure, such as fuel spread and bunkering availability across ports, can currently be addressed by SOx scrubbers until future fuels are more readily available (though this may also depend on whether these future fuels themselves require scrubbing). We believe many operators will continue to use heavy fuel oil (HFO), low sulphur fuel oil (VLSFO) together with alternative fuels. Until bunkering availability is extended, it is most likely that we will see enhanced hybrid fuel use during this transitional period.

Energy providers are steadily advancing and investing in what they feel are viable solutions, even as overall global discussions remain in early to intermediate stages. Some countries are investing in infrastructure for particular fuels, and this may have effects both regionally and globally that have yet to play out for the supply chain.

This necessitates that shipping prioritizes technology offerings that remain compatible with a wide range of existing and emerging fuels so ship owners and operator have the flexibility they need for global operations. These technologies may meet existing emission targets without being limited by the mix of existing and future fuels by either working to reduce overall fuel consumption, cleaning gas emissions, or by other means.

There is great value in practically assessing our current market conditions and goals with what we hope to achieve in the future – and not compromising on either but achieving a workable balance. As maritime becomes more public-facing and end users and stakeholders are seeking companies that can satisfy green commitments, we need to ensure that our industry can continue to ensure public confidence – particularly if we want buy in from governments and end users.

As a result, it is essential – not optional – that we find good, workable solutions to our current market and labor conditions that keep us on track with global greening plans. And I believe that scrubbers are currently an important part of this process.

Planning for the long term

We also need to consider that a scrubber project is more than financial commitment and requires careful planning and co-ordination for best outcomes. Between production and commissioning itself involves multiple stakeholders: production, delivery to shipyard, installation, commissioning, MARPOL tests etc. In the current market and faced with long queues at shipyards – resulting from high demand and ongoing shortages of labor and resource – acting early can often make a valuable difference to a ship owner’s timeline. This is unlikely to let up any time soon, and so it is important to act early and to factor in a reasonable timeline that accounts for the months between placing an order to installation.

It is vital with these short timelines that customers are able to access a scrubber that is suitable for their vessel in terms of both installation space as well as voyage pattern, because these are important factors to consider in the process. Customers concerned with space or with specific installation requirements may need a customized design which will factor into the overall timeline of a project. Regardless of the alternative fuels vying for global interest, our goal remains unchanged – we intend to continue innovating and providing the market with high quality green technologies and solutions that comply with regulations and foreground long term efficiency.

Copyright © 2022. All rights reserved.  Seatrade, a trading name of Informa Markets (UK) Limited.

Port of LA

The decline in inbound US container volumes accelerated in October, falling by 9.4% across the 10 largest US box ports.

Gary Howard | Nov 18, 2022 – Seatrade Maritime News

Inbound volumes of 1.9m teu were the lowest since February 2021, according to analysis from the McCown Report. Highlighting a difference in fortune between coasts, East coast imports were up 9.5% on the 28-month average, while West coast ports were 22.7% down, giving an overall 6.8% deficit on the 28-month average.

West Coast ports led the decline with a 23.3% drop on-year in October inbound volumes, the biggest decline seen in over seven years, according to analysis from the McCown Report.

“Concern regarding possible labor unrest on the West Coast continued to play a role in additional volumes shifting eastward,” said John D McCown.

Despite the steep drop over the pandemic inflated inbound volumes of the pandemic, McCown said the figure represents a 2.4% compound annual growth rate over the past three years, suggesting a return to more normal growth.

The report forecast further large drops in volumes on-year for November and December as the market recovers from pandemic impacts.

The continued shift eastward of volumes comes despite congestion easing dramatically at the port of LA/Long Beach. For October, there was an average of 6.1 ships waiting for berth compared to 103.5 at the start of this year.

Some of the congestion has shifted eastward, with queues of 32 and 17 at Savannah and Houston, respectively, but McCown’s estimates puts the number of vessels awaiting a berth at 70 across the entire US, down from 99 a month ago.

McCown again stressed what he called the “perilous impact of container rates on inflation”, with his estimate that the US economy has absorbed around $113.2bn in annual inflation based on the difference in container freight pricing between the fourth quarter 2019 and third quarter 2022.

Copyright © 2022. All rights reserved.  Seatrade, a trading name of Informa Markets (UK) Limited.

 Sam Chambers Splash November 18, 2022

Fast growing AD Ports Group has bought Spanish ports firm Noatum for $660m.

This will be AD Ports Group’s third major international acquisition in 2022, following the acquisition of a 70% equity stake in Transmar and TCI in September, and the announcement in November of its acquisition of an 80% equity stake in Dubai-based Global Feeder Shipping (GFS).

Noatum, whose origins date back to 1963, operates in three business areas – logistics, maritime, and port terminals – with market-leading positions in Spain and Turkey and a significant presence in the US, UK, China, and Southeast Asia.

Noatum’s global logistics business is best known for its heavylift expertise while its terminal operations include 15 roro, dry bulk, general cargo, and container terminals in Spain. Its maritime division provides shipping agency services, including outsourcing and ancillary services, and cargo services, such as liquid bulk, breakbulk cargo, reefer and dry cargo.

Subject to regulatory approvals, the transaction is expected to close in the first half of next year. As part of the transaction, Noatum’s management is locked in for a period of three years.

Falah Mohammed Al Ahbabi, chairman of AD Ports Group, said: “This ambitious acquisition brings a major global logistics platform into the AD Ports Group family, significantly enhancing our global connectivity and extending the range of maritime, logistics, and ports solutions we can offer as we continue to pursue a determined strategy for growth. This acquisition makes AD Ports Group one of the most significant global players in finished vehicle logistics, which we intend to expand in our home and core markets.”

 Sam Chambers November 3, 2022

AD Ports Group has made its largest ship investment to date, spending $800m to take an 80% stake in Dubai-based Global Feeder Shipping (GFS), creating a feeder giant in the process.

GFS has 26 owned and operated vessels with a total capacity of 72,500 teu, covering the Middle East, Indian Subcontinent and Southeast Asia with services connecting the UAE to India, Pakistan, Sri Lanka, Egypt, Sudan, Djibouti, Yemen, Saudi Arabia, Bahrain, China, South Korea, and Vietnam, among others.

Our ambition is to become one of the world’s leading shipping companies

AD Ports Group will look to integrate GFS with other group companies SAFEEN Feeders and Transmar, bringing the group’s fleet to 35 owned ships with a total container capacity of 100,000 teu. As a combined entity, the 100,000 teu capacity would place AD Ports 20th in Alphaliner’s global liner rankings.

Subject to regulatory approvals, the transaction is expected to close in Q1 2023. GFS’s existing management will remain in place with the founders retaining a 20% stake in the company.

Falah Mohammed Al Ahbabi, chairman of AD Ports Group, said: “Our acquisition of a majority stake in GFS, which is the largest external investment in our company’s history, will deliver a step-change in the range of services we can offer and significantly enhance our global connectivity. Our ambition is to become one of the world’s leading shipping companies, offering the most comprehensive range of maritime services, and this investment moves us significantly closer to achieving that goal.”

The top two port operators in the United Arab Emirates, AD Ports and Dubai-based DP World, have led much of the consolidation seen in the feeder sector in recent years with the latter assuming control of brands such as Unifeeder, Transworld Feeders and Feedertech among others.