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Currently fewer containers are transported than before the pandemic

Currently fewer containers are transported than before the pandemic

After two years of absolutely limited capacity, the scenario is changing abruptly

The shipping industry on the verge of a turnaround with freight rates falling and container movement to the US down nearly 20% last month. Ryan Petersen, founder and CEO of Flexport, a company that focuses on supply chain management and logistics; including order management, commercial financing, insurance, cargo transportation and customs brokerage- analyzed the current situation of the maritime-port industry in the US in an interview with Bloomberg. In the current context where the collapse of spot rates in maritime transport can be seen, after a boom period driven by the impact of the Covid-19 pandemic, Petersen referred to the real importance of this value for trade.

In this regard, he explained that in maritime container transport around 60% or 70% of containerized cargo movements are agreed upon in annual contracts and 30% or 4% in the spot market. However, as was the case during the pandemic, the incredible increase in spot rates simply overwhelmed contract rates. “Sometimes people don’t respect the contract. And a lot of people, you know, see these contracts as a kind of gentleman’s agreement, handshakes…” he said.

From limited capacity to recession

As for how excess or shortage of capacity can affect the relationship between shipping lines and shippers/cargo owners, he explained that when capacity is limited, what matters most is the existing relationship: if it is a profitable client, for how long it has been and its consistency. At that point, “the act of committing the cargo and not canceling starts to become more important,” Petersen said.

He pointed out, however, that the picture changes when the space is wide open, since “if there is excess capacity, you do not need a relationship [from the point of view of the shipper]”, something that according to his appreciation should start to change.

He added that “we went through a really long period from 2015 to 2019, 2020, at the beginning of the pandemic, when there was excess capacity in shipping. And then we had two years of extremely limited capacity and it feels like we are right in the middle of a major recession, meaning there is less container shipping than before the pandemic.”

Shanghai port remains world’s busiest container port

Shanghai Port remained the world’s busiest container port for the 13th straight year in 2022, despite the COVID-19 epidemic, port data showed Monday.

The port’s container throughput exceeded 47.3 million 20-foot equivalent units (TEUs) in 2022, according to the Shanghai International Port (Group) Co., Ltd., the port operator.

Braving the epidemic, as well as waves of heat and cold last year, the port guaranteed the stable operation of the Shanghai International Shipping Center and safeguarded the stability of global industrial and supply chains.

Following the epidemic in the second quarter, the port managed to quickly make a V-shaped recovery in container throughput in July, when it handled a monthly record high of 4.3 million TEUs.

Shanghai port remains world’s busiest container port
Early Chinese New Year further complicates shipping lines’ performance in early 2023

Early Chinese New Year further complicates shipping lines’ performance in early 2023

Capacity exceeds cargo volume

Meanwhile, a more optimistic outlook was put forward by Hapag-Lloyd, anticipating a short-term recovery in demand towards the end of the year and through Chinese New Year. Further into the future, the German shipping line predicted a 1% increase in global container volumes in 2022, rising to just 2% in 2023.

Next year’s growth will be offset by the increase in container transport capacity, which Hapag-Lloyd forecasts at 4%. Port congestion also decreased more than 9% in November compared to its peak in June, according to the shipping line.

Port of Los Angeles affected has been affected by the cancellation of itineraries (blank sailings), thus underlining the drop in demand. Volumes were down to 639.344 TEUs in November, a 21% drop from the same month in 2021, as the port was affected by both labor negotiations and falling demand. The port registered 13 blank sailing in November and expects another 11 in December, CEO Gene Seroka confirmed.

The Port of Long Beach also saw a 21% year-over-year drop in November volumes to 588.742 TEUs. Imports plummeted 28%, while exports rose 14%.

“Our goals are to develop blueberries that require fewer chemical inputs to fight disease, which can be better for both the environment and grower bottom line,” Luby said.


After signing a collaboration contract with the Spanish Government, the Danish marine transport giant Maersk will invest over 10,000 million euros to start a green hydrogen “megaproject.”

The goal is to stimulate the production of green hydrogen and biofuels in the Spanish maritime industry and to transform the nation into a global hub. Since they would be able to accommodate two plants for the production of green fuels and are promoted as strategic locations for the development of a global network to promote the production of sustainable fuels for maritime transport, the development of this project would specifically take place in two port areas of Andalusia and Galicia, which are still to be determined.

The Danish business will like to produce two million tons of green methanol for maritime transportation by 2030. Three stages would be involved in the development; the first would see 200,000 tons of green methanol produced up until 2025; the second would see a million tons produced by 2027; and the third would see two million tons of green methanol produced by 2030.

The initiative would include every step of the value chain, from the creation of renewable energy to “bunkering.” A complete green hydrogen ecosystem will also be developed by the shipping firm in collaboration with academic institutions, regional businesses, and other partners.

The project is anticipated to create about 85,000 employment, both direct and indirect, during the construction phase, and the government does not exclude out participating as a strategic investor in it.

The project will aim to use current European monies to promote green hydrogen in addition to the potential government investment. The parties have completed a preliminary analysis of the project’s competitiveness and are currently working on a final assessment with the goal of promoting its development by the middle of next year.

PortMiami welcomes largest containership ever

PortMiami welcomes largest containership ever

With a capacity of 15,536 TEU, the Osiris is a Neo-Panamax vessel currently on the Manhattan Bridge shipping route connecting China to US East Coast Ports.

“I am so proud of PortMiami, and what it has accomplished following years of infrastructure investments made by Miami-Dade County”, said Miami-Dade County Mayor Daniella Levine Cava.

“As an alternative to West Coast traffic, PortMiami offers shippers the advantage of open express access to deep-water docks, super post-Panamax electric cranes, a port tunnel with direct highway access, and a national freight rail connection reaching most of the US within four days, in addition to its daily link to Latin America and the Caribbean.”

Since the beginning of the year, PortMiami has serviced three of the largest CMA CGM ships, each with a capacity of more than 13,000 TEU – the CMA CGM Argentina followed by the CMA CGM Magellan, and CMA CGM Christophe Colomb.

The Osiris is expected to move over 1,000 containers through the South Florida Container Terminal (SFCT), one of PortMiami’s cargo operating terminals.

In October, PortMiami Crane Management, Inc., (PMCM) appointed PACECO MOMENTUM to install the digitalisation tool PACECO SPYDER on three additional Ship-to-Shore (STS) cranes.

In the future, installation will be implemented on a further two for a total of 11 transformed cranes.

Optimising digitalization for tangible sustainable logistics

The prioritization assigned to sustainability by businesses is becoming emphatically more focused and strategic. With the shift in preference for environment-friendly products, green-aware customers are demanding more information to gauge the sustainability of the overall supply chain of the products they purchase. Such as the raw materials used, the conditions under which it was manufactured and produced and the logistics operations of the movement of this product throughout its supply chain. Additionally, businesses are also under pressure from regulators and investors to divulge their sustainability strategy, initiatives and results.

At present, intelligent supplier management, i.e., considering carbon emissions alongside price and delivery time as a selection criterion for suppliers, is becoming a decisive competitive advantage for businesses. Furthermore, increasing their scope of monitoring the working conditions and impact within their own supply chain and their direct suppliers, companies have also taken into consideration their downstream suppliers as well. Thus, transparency is key as businesses are trying to implement sustainability strategies that encompass the entire value chain of their products.

As an enabler of global trade, logistics plays an important role in the growth of businesses across any industry. However, it also generates an unsustainable footprint. In 2020, the logistics sector contributed up to 21% of the total carbon dioxide emissions around the world. With the rise in demand from customers, pressure from regulators and investors and the new green supply chain laws, sustainable logistics is a must for companies.

Sustainable Logistics

The supply chain consists of two facets – the physical and the digital supply chain. The physical supply chain involves the storage and movement of cargo through various transportation mediums and facilities until it reaches the final destination. Whereas the digital supply chain deals with storage and movement of relevant documentation through various platforms and tools for booking, permits, re-scheduling, tracking and monitoring etc until the arrival of the cargo at the final destination.

When considered in this manner, there are a plethora of initiatives that can be undertaken by businesses for both aspects. On the physical supply chain side lies the use of alternative greener fuels like bio-fuel, electric vehicles or alternative energy sources like solar power to name a few. When it comes to the digital front, there are already a great number of innovations being explored to make trade paperless through the use of automation, machine learning and blockchain technology. Digital tools also helps businesses keep track of their sustainability metrics and measure of impact and supports more accurate reporting.

Although there is an increased awareness and willingness from businesses to undertake necessary sustainable actions, there are still some challenges in the use of as well as in scaling up green offerings.

Challenges in Going Green

  • Limited infrastructure to support green offerings globally, i.e., Limited availability of facilities for green fuels, energy, vehicles and equipment etc at landing or transit hubs like airports and ports
  • Higher cost of sustainable solutions. For instance, the price of biofuels is still higher than that of conventional fuels
  • Lack of an industry-wide global standard for green supply chains

But digitization can also be leveraged by businesses from the outset in order to undertake the requisite sustainability initiatives, based on accurate data analysis, that can have a larger positive impact while also optimising their costs, time and efforts.

How can digitization support the sustainability agenda of a business?

The implications of digital tools and innovations on sustainability is enormously advantageous for businesses. In general, sustainability initiatives or improvements requires a certain level of investment by businesses. And even if some businesses are ready to pay a premium for sustainable practices, the rising costs of energy, assets and employee wages have made them be more cautious of their expenditure.

As a result, businesses seek an accurate analysis of their carbon footprint in order to help them optimise their investment and ensure that their chosen sustainability strategy has the most meaningful impact. Most supply chains are fragmented and thus highly complex due to the larger number of stakeholders and logistics nodes involved. The resulting multitude of data points translates to a higher complexity in gauging the impact of a business’s operations in terms of sustainability.

Maersk’s Emissions Dashboard is an interactive sustainability tool that provides businesses with an overview of their carbon footprint across their entire value chain and trade channels. It is a neutral single window that consolidates the emissions data across all carriers and transportation modes, be it Maersk or a third party. What’s more, it follows an industry leading calculation method that is GLEC-compliant, so that businesses can set science-based targets for the future as well.

Sustainability tools like Maersk’s Emissions Dashboard gives businesses better control over their supply chain, and it can also be utilized to gain a more in-depth view of where the sustainability gaps lie. With this higher level of transparency, businesses can implement intelligent sustainability strategies to help them achieve science-based targets while also reducing their costs and improving their bottom lines.

Optimising digitalization for tangible sustainable logistics
Maersk sees container demand slowing as recession looms

Maersk sees container demand slowing as recession looms

Shipping group Maersk (MAERSKb.CO) warned on Wednesday of slowing demand for transport and logistics as a global recession looms and cut its forecast for container demand this year, even as it beat third-quarter earnings expectations.

“It is clear that freight rates have peaked and started to normalize during the quarter, driven by both decreasing demand and easing of supply chain congestion,” Chief Executive Soeren Skou said in a statement.

The company’s shares were down 4.4% at 0839 GMT, and have now fallen 38% since hitting a record high of 24,920 Danish crowns on Jan. 13.

The Copenhagen-based company, one of the world’s biggest container shippers with a market share of around 17%, is often seen as a barometer of global trade.

“With the war in Ukraine, an energy crisis in Europe, high inflation, and a looming global recession there are plenty of dark clouds on the horizon,” Skou said.

Maersk now sees global container demand falling by 2% to 4% this year, citing an unfolding economic slowdown expected to continue into 2023. Its previous guidance was for an outcome towards the lower end of a range of minus 1% to plus 1%.

Freight rates surged in step with higher consumer demand during the pandemic, resulting in congested ports and delays, and while those rates have since come down, containers still cost more to ship than before the pandemic.

Climate change will impact port infrastructure in the coming decades

A scientific publication led by the academic from the University of Valparaíso and researcher from the ANID CIGIDEN Center, Patricio Winckler, addressed the impact of climate on the operating conditions of seven large state ports in Chile, a system that plays a strategic role for our integration with the world, since it transfers approximately 90% of international trade.

As a whole, the Chilean port system is made up of 28 major ports, 19 of which are exposed to the Pacific Ocean. During tidal waves, port operations at these ports are suspended to ensure the safety of ships, cargo and workers. This phenomenon, however, has been little studied to date, even though the costs associated with port closures amounted to 345 million dollars for the national economy in 2020 alone.

The recent study “Impacts in ports on a tectonically active coast for climate-driven projections under the RCP 8.5 scenario: 7 Chilean ports under scrutiny”, published in the scientific journal Coastal Engineering Journal, aims precisely at understanding how climate change would affect the system port.

Specifically, Winckler, together with the UV ocean civil engineers, Javiera Mora and César Esparza, the UV Ocean Civil Engineering professor Manuel Contreras-López, and academics from the UC and the University of Davis, calculated the impact on port operations due to eventual port closures and the effects that swells and sea levels can generate on port infrastructure under a pessimistic climate change scenario (RCP 8.5).

· Historical evidence The study begins by showing that port closures amounted to 17,153 hours in the ports analyzed between 2008 and 2018, which implied annual losses of 18 million dollars only for dockage and cargo transfer services in the cases analyzed. These values ​​do not consider the costs associated with the entire logistics chain of merchandise transport and, in short, translates into an increase in prices. “In just one decade, port closures increased from 17 hours in 2008 to 3,022 hours in 2018 in all the sites analyzed, which could be associated with an increase in the frequency of storm surges and greater demands to guarantee the safety of the ports. maneuvers of the large container ships that arrive in Chile”, explains Patricio Winckler. The analysis also shows that, although the northern ports are quite far from the wave generation areas in the South Pacific Ocean, they were the most affected, with 310, 100 and 1,088 hours per year for Arica, Iquique and Antofagasta, respectively. . Ports located in the central and southern regions of Chile, in contrast, had comparatively less downtime.

· Port operational conditionsTo assess the effects associated with climate change on port operations, the team calculated the wave climate for a historical period (1985-2004), mid-century (2026-2045) and end of the century (2081-2100), with a generation model for the entire Pacific. According to the Valparaíso University expert, this statistic was then transferred to each port using spectral models that rescue coastal propagation processes, where downtime was calculated by comparing wave heights with minimum criteria that allow access maneuvers. , mooring and permanence of ships in the mooring sites. The results show that some ports would reduce and others would increase downtime for mid-century projections due to local effects. Thus, operating conditions would deteriorate in the ports of Iquique and Antofagasta, would improve slightly in Valparaíso and San Antonio, and would improve significantly in San Vicente. Arica and Coquimbo would not experience relevant changes. “By the end of the century, however, all ports would experience an improvement in operational conditions, since, with climate change, the average waves will be generated further south, reaching the coasts of central and northern Chile, with less Energy. That translates into a reduction in the expected number of port closures and an associated economic benefit,” explains Winckler. The CIGIDEN expert complements that in the next 30 or 40 years, the climate system will be displaced to the south and the waves, on average, will reach the central zone with a little less energy. “That could be probabilistically beneficial, because the amount of swell could eventually decrease, which could lead to an improvement in the operational conditions of some ports.”

· Structural damageFrom the point of view of port infrastructure, Winckler warns, we are going to experience a rise in sea level which, combined with tidal waves, will result in a greater overpass and therefore greater structural damage to shelter works, which meet the function of reducing the action of the waves and, eventually, the wind of the port works. “This generates economic losses associated with the repair and lost profits. In addition, the overcoming of the waves would reduce the safety of pedestrians on seafront promenades and of workers in port areas”, he warns. The CIGIDEN expert indicates that the preventive maintenance and repair of existing works should be a priority for State agencies and concessionaires: “We must review those structures that are very old and have been hit by large earthquakes, tsunamis and tidal waves in Chile and Based on this, define adaptation measures”. The engineer concludes by exhorting the world of academia and consultancy to abandon the traditional design procedures for port infrastructure and incorporate climate change in the definition of the design conditions for future works.

Climate change will impact port infrastructure in the coming decades
Panama Canal reports drop in container cargo transiting through its Neopanamax locks

Panama Canal reports drop in container cargo transiting through its Neopanamax locks

The Panama Canal reported a surprising drop in container cargo transiting its Neopanamax locks during fiscal year 2022 (which runs from October to September), falling from 51.2 million to 50.2 million. By contrast, the amount of containerized cargo transported through the traditional locks increased from 10.0 million to 12.1 million tons, Alphaliner reported.

The number of transits is similar: the number of container ship trips registered in the “old” locks increased from 1,003 to 1,175 in the year 2022, which represents an increase of 17%. Transits also increase at the neo-Panamax locks, but by a much smaller percentage, from 1,599 to 1,647, or a 3% increase.

Overall, the Canal missed a modest increase in the number of container ships using the waterway (both locks) during the year, despite the frenetic nature of the pandemic trade. Total transits decreased 8% year-on-year to 2,822 as many ships abandoned their regular sailing schedule for more lucrative operations on the trans-Pacific route.

Ballast traffic increased slightly on the Canal, especially northbound, but most of the year’s growth came from northbound cargo traffic, which was up 10% versus 5% southbound.

After two years of shipping snarls, things are starting to turn around

After two years of port congestions and container shortages, disruptions are now easing as Chinese exports slow in light of waning demand from Western economies and softer global economic conditions, logistics data shows.

Container freight rates, which soared to record prices at the height of the pandemic, have been falling rapidly and container shipments on routes between Asia and the U.S. have also plunged, data shows.

“The retailers and the bigger buyers or shippers are more cautious about the outlook on demand and are ordering less,” logistics platform Container xChange CEO Christian Roeloffs said in an update on Wednesday.

“On the other hand, the congestion is easing with vessel waiting times reducing, ports operating at less capacity, and the container turnaround times decreasing which ultimately, frees up the capacity in the market.”

The latest Drewry composite World Container Index — a key benchmark for container prices — is $3,689 per 40-foot container. That’s 64% lower than the same time last September after falling 32 weeks in a row, Drewry said in a recent update.The current index is much lower than record-high prices of over $10,000 during the height of the pandemic but still remains 160% higher than pre-pandemic rates of $1,420.

According to Drewry, freight rates on major routes have also fallen. Costs for routes like Shanghai-Rotterdam and Shanghai-New York have fallen by up to 13%.

The falling freight rates tie in with a “sharp drop” in container shipments that Nomura Bank has observed.

Nomura, quoting data from U.S.-based Descartes Datamyne, said container shipments from Asia to the U.S. for all products except rubber products in September are down year on year.

“We assume that the sharp drop in container shipments largely reflects US retailers stopping orders and reducing inventories due to the risk of an economic slowdown,” Nomura analyst Masaharu Hirokane said in a note on Wednesday, adding that the bank has yet to see signs of a sharp fall in U.S. retail sales.

Port throughput around the world has also dropped. When Shanghai reopened after its recent lockdowns, port traffic volumes lifted but weren’t enough to offset the “wider downturn in port handling levels,” Drewry said.

What’s different now

In Europe, sliding container prices and rates reflect declining consumer confidence, Container xChange said.

“The European market is finding itself flooded with 40-foot high-cube containers. As a result, the region is experiencing a fall in the prices of these boxes,” Container xChange said.

The trends in logistics and supply chains from the past two years have reversed, logistics companies said. During that period, container shortages were constant as a result of delays at ports affected by lockdowns and soaring demand.

After two years of shipping snarls, things are starting to turn around