Carrier Industry News

The beleaguered carrier industry took another major hit in June, with the latest data from Xeneta’s Shipping Index (XSI) showing a decline of 9.4% in global long-term shipping rates. Following on the heels of a 27.5% collapse in May, and a 10.3% fall in April, contracted rates have now shed 47.2% of their value in the last three months alone, and 51.7% over the course of 2023.Xeneta’s data shows falls in the prices of valid long-term contracts across all key trading corridors…

With the peak ocean freight cargo season approaching, the latest data from Oslo-based Xeneta shows mixed fortunes, and outlooks, for the two main Far East to Europe trade corridors.Xeneta’s analysis reveals that shippers opting for the Far East – Mediterranean route are currently paying a spot rate premium compared to those choosing a North European option. There are also clear implications for long-term contracts, explains Peter Sand, Chief Analyst at Xeneta, across two very similar routes…

Xeneta has taken the first step in a campaign to identify the carrier industry’s best and worst environmental performers across the world’s 13 leading shipping trades. With the help of the Carbon Emissions Index (CEI), a tool from Xeneta and Marine Benchmark, carriers have been assessed on the main Far East to South America East Coast container corridor. With first results out, Hamburg Süd is likely celebrating; Evergreen, likely not.According to the latest analysis, the CO2 emitted…

The Biden administration recently issued a sweeping Executive Order [1] aimed at protecting and enhancing competition, and the transportation sector—including air, ocean, and rail—is among the industries specifically identified and likely to see heightened antitrust scrutiny under the new directives. This executive action was soon followed by the long-awaited announcement of Biden’s pick to lead the U.S. Department of Justice’s Antitrust Division (Division), Jonathan Kanter, who…

Norwegian shipping company Wallenius Wilhelmsen Ocean AS pleaded guilty to charges of criminal cartel conduct in Australia’s Federal Court on Thursday, following an investigation by the country’s competition regulator.The charges relate to the transportation of vehicles, including cars, trucks and buses, to Australia between June 2011 and July 2012, the Australian Competition and Consumer Commission (ACCC) said in a statement.Wallenius Wilhelmsen was charged with cartel conduct…

Fr. Meyer's Sohn (FMS), a global forwarding company for sea freight, announced that Trond Prestroenning will strengthen the management team as from September 1st, 2019.He will take on the position as ‘Regional CEO Americas’ and ‘President of Fr. Meyer’s Sohn North America, LLC’, said a press release.Tomas Jonson, previous ‘CEO of North America’ for Fr. Meyer’s Sohn, will be leaving the forwarder to pursue a new challenge in a different industry.Trond Prestroenning has been in freight forwarding for 25 years. Born and educated in Norway where he started his career in the ocean carrier industry.The last 14 years he lived in the United States where he has been working in senior leadership roles in companies such as Kühne+Nagel, Hellmann and DB Schenker.

South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME) and DNV GL have signed a framework agreement which will see them cooperate on joint development projects (JDPs) for future technologies in the shipbuilding and offshore plant industries.The Norway-headquartered classification society said in a release that the agreement was signed by DSME President & CEO Sung-Geun Lee and DNV GL Group President & CEO Remi Eriksen at the DNV GL headquarters in Høvik.“Through the JDPs with DNV GL, we aim to develop new technologies to meet the needs of our clients and further provide the direction in the shipbuilding and offshore industries,” said Sung-Geun Lee.

Hongkong International Terminals Limited, Modern Terminals Limited, COSCO-HIT Terminals (Hong Kong) Limited, and Asia Container Terminals Limited jointly announced the formation of the Hong Kong Seaport Alliance (The Seaport Alliance).The joint operating agreement designed to deliver more efficient service offerings to carriers that call Hong Kong, while enhancing the overall competitiveness of the Port of Hong Kong across the region.The Seaport Alliance will offer a total of 23 berths and the planning for which is conducted by an Operations Coordination Team using a common terminal operating system.“The formation of the Seaport Alliance will further enhance efficiencies…

A Final Rule published today by the U.S. Federal Maritime Commission (FMC) offering deregulatory flexibilities for non-vessel-operating common carrier (NVOCC) negotiated rate arrangements (NRAs) and NVOCC service arrangements (NSAs) will go into force on August 22, 2018.The key changes to NRAs allow them to be amended at any time; allow the inclusion of non-rate economic terms; and, allow an NVOCC to provide for shipper’s acceptance of the NRA by booking a shipment. NSAs will…

The service provided by container shipping lines is rated as poor to average and has deteriorated in the past year, according to a survey of exporters, importers and freight forwarders conducted jointly by Drewry and the European Shippers’ Council (ESC). The ESC and Drewry contacted several hundred shippers and forwarders from all over the world in March 2017 and asked them how satisfied they were with 16 price and non-price related attributes of the services provided by ocean carriers. The survey also looked into areas most in need of improvement and how quality varies by type of carrier. On a scale of 1 (very dissatisfied) to 5 (very satisfied), customers on average did not rate carriers higher than 3.3 for any of the 16 service attributes, the survey showed (see chart).

ICTSI Oregon, Inc. and the Port of Portland have mutually agreed to terminate a 25-year lease agreement to operate the container facility at the Port’s Terminal 6. The agreement allows ICTSI Oregon to be relieved of its long-term lease obligations effective March 31, 2017, pending approval by the Port Commission. In exchange, the Port will receive $11.45 million in compensation to rebuild business, as well as additional container handling equipment, spare parts and tools at the terminal. “Small businesses, farmers, agricultural producers, shippers and communities throughout the Columbia River region deserve and need a fully-functioning container terminal,” said ICTSI Oregon CEO Elvis Ganda.

Ocean freight rates for cargo moving under contracts on the major East-West trade routes saw a reversal of trend in 4Q 2016, according to Drewry’s Benchmarking Club, a closed user group of 50 multinational retailers and manufacturers who closely monitor their contract freight rates. The Drewry Benchmarking Club Contract Rate Index, based on average Transpacific and Asia-Europe contract freight rate data provided confidentially by shippers, increased by 3% in the latest quarter, after having fallen for more than 6 consecutive quarters. “2017 will be the first year of increasing contract rates since 2010 and this could come as a shock to some logistics managers who had got used to deflationary international transportation costs year after year…

Drewry’s Global Freight Rate Index, a weighted average of spot container freight rates across all major routes except intra-Asia, swung back in July by 13% to reach $1,403 per 40ft box. The global spot rate index had dropped to an all-time low of $1,113 per 40ft container in April. Drewry is in a unique position to track these trends through its Container Freight Rate Insight online platform, via which a constant panel of over 30 forwarders and NVOCCs report rates on a continuous basis. Among the North-South trades, dismally low rates on the Asia-West Africa and Asia-South Africa routes are registering signs of reversal, with the start of the peak season. Rates from Shanghai to Lagos increased by 11% between May and July.

Container industry revenues are contracting faster than carriers can cut costs. First-half results so far suggest sales are down by around 18%, increasing the pressure to reduce costs. The container shipping industry is currently enduring a severe revenue contraction that is placing carriers under enormous pressure to squeeze more savings wherever they can and is driving the latest round of M&A activity. The first-half 2016 financial results that have been published so far from a handful of major carriers paint a very depressing picture for the industry. First-half revenue from the sample companies listed in Table 1 was down by 18% on average, which if it holds true for the industry across the full year would mean that carrier income will shrink by approximately $29 billion against 2015.

The GT Nexus Shipper Council, a community group of supply chain executives representing large global enterprises, has recognized Hapag-Lloyd, one of the world's leading container liner shipping companies, as the winner of the 2016 Ocean Performance Award. The award was granted at Bridges 2016, the leading cloud supply chain industry event held July 10-13 in New York as part of Inforum. Hapag-Lloyd operates a fleet of 175 modern container ships and a total capacity of 955,000 twenty-foot equivalent units (TEU). The company has approximately 9,400 employees at 361 sites in 118 countries. Hapag-Lloyd has a container fleet of 1.6 million TEU including one of the world's largest and most state-of-the-art reefer fleets.

Westwood Shipping’s final call to Oregon’s Port of Portland will be May 21, signaling the exit of the last remaining container shipper making regular calls to the port’s Terminal 6. The shipping company stated in a letter to customers that economics of a single call per month do not justify continued service at the port. The Puyallup, Wash.-based Westwood Shipping called Terminal 6 with container service since July 2010, but suspended regular calls in April 2015 following  the exit of Hanjin and Hapag-Lloyd in March 2015. Westwood then returned with monthly export calls in July 2015, taking about 150 containers of hay, grass seed, dried fruits, other mixed agricultural goods and paperboard for export to Japan.

Off the coast of a nearly deserted island below the southern tip of Hong Kong, at least 10 massive ships that normally carry hundreds of thousands of tons of coal or iron ore lie idle near one of the world's busiest sea routes. These empty vessels paint a grim picture for the dry bulk shipping business that veterans of the industry say is grappling with an unprecedented crisis of too many ships and not enough cargoes. The hollow boats underscore the global economic doldrums that policymakers are struggling to overcome. "This is the worst we have seen in recent times. We have been hit by a perfect storm - huge order books, China slowdown…

All signs point to a continuation of struggling theme for containerized-ocean-freight industry  into 2016 and beyond, warns a study by AlixPartners. The containerized-ocean-freight industry suffered in 2015. Its continuing financial woes accelerated because nearly all key financial indicators declined from 2014. At the heart of the industry’s problems, a persistent global supply-and-demand imbalance is to blame. All signs point to a continuation of that theme into 2016 and beyond. The most-recent forecasts expect global container fleet capacity to grow by 4.6% in 2016, and another 4.7% in 2017, though spot prices for major routes have dropped 21 to 44% from a year ago because of plunging demand, now about half the current growth forecast.

So, Maersk, MSC and CMA CGM will not be allowed to form what would have been the largest mega-alliance in the shipping industry. But what are the implications, and what is likely to happen next? Drewry Martime Research consider these questions in their latest Container Insight Weekly. China’s regulators have blocked the P3 mega-alliance between Maersk, MSC and CMA CGM on the grounds that it infringes the country’s competition laws between Asia and Europe, particularly with respect to the lines’ combined market share of 46.7%. The law enforcers appear to believe that the cost reductions gained by the P3 carriers would either have been offset by this unacceptably high risk of market concentration, or would not have been passed back to shippers satisfactorily.

With Maersk, MSC and CMA CGM now in damage limitation mode following their failure to get P3 agreed in China, what else can they do to cut costs? Following China’s rejection of P3 last month, Maersk, MSC and CMA CGM are under pressure to find alternative ways to cut costs. In Drewry’s view, one of these must be by reducing fuel consumption through increased slow steaming, as bunker costs account for well over half of all vessel running costs. It is not the only way, as clarified in ‘Life without P3’. Cash strapped competitors could easily follow suit on slow steaming as the carrier industry is still struggling with over-capacity, and shareholders are clamouring for remedial action.

A number of reporting and operational errors caused the list and grounding of Höegh Osaka on January 3, 2015 according to an investigation by the Marine Accident Investigation Branch, UK. The report into MAIB’s investigation of the listing, flooding and grounding of pure car and truck carrier Hoegh Osaka on the Bramble Bank, The Solent on 3 January 2015 is now published. In his statement to the media, Steve Clinch, The Chief Inspector of Marine Accidents stated, "The MAIB’s investigation found that Hoegh Osaka’s stability did not meet the minimum international requirements for ships proceeding to sea. The cargo loading plan had not been…

Today the US Army Corps of Engineers released the Draft Integrated Feasibility Report and Environmental Impact Statement for the Post-45 Harbor Deepening project, recommending that the Charleston Harbor be deepened to 52 feet. "The Port of Charleston's ability to handle post-Panamax vessels 24 hours a day without tidal restriction is critical to the future competitiveness of our state port system," said Jim Newsome, SCPA president and CEO. "Completion of our harbor deepening project to 52 feet ensures that SCPA will continue to grow above the market average and remain a top ten port, facilitating trade and economic development for our entire state, region and nation.

The South Carolina Ports Authority, Lowcountry Open Land Trust, Coastal Conservation League and the Southern Environmental Law Center announced a milestone agreement for the Post-45 Harbor Deepening Project that includes a port contribution to land conservation efforts along the Cooper River Corridor. SC Ports Authority (SCPA) is partnering with Lowcountry Open Land Trust (LOLT), Coastal Conservation League (CCL) and the Southern Environmental Law Center (SELC) to form a new collaboration that invests in the conservation of the Cooper River Corridor and ensures the timely progress forward of harbor deepening. Pending final approval by the Joint Bond Review Committee later this month…