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DP World adds new trade routes to open global markets, ease supply chain congestion

DP World adds new trade routes to open global markets, ease supply chain congestion

10 Oct
global 0

UAE-based global logistics major DP World said it added more than 23,000 nautical miles of new trade routes across the globe, including connections between India, Middle East and Africa, and new connections between Latin America, Europe and Asia during January-September this year.

The new routes, which also included multiple new routes connecting smaller ports with Rotterdam in Europe, have enabled opening new trading opportunities for cargo owners, better access to goods and services for underserved populations, besides providing alternatives to globally congested routes and ports across the globe, the company said.

Tiemen Meester, chief operating officer of ports & terminals at DP World, said the new routes provided Central American fruit suppliers access to Asia, the UK and Western Europe, and African citrus growers access to new markets in the Middle East and South Asia.

“We use cutting-edge innovations that create new ways to take goods to market where none exist or add alternatives where supply chains are subpar,” Meester said.

DP World’s route expansions this year also include a new route connecting Ecuador’s fruit and cocoa producers to Asia for the first time.

French shipping line CMA CGM launched a new service in August from DP World Posorja at Guayaquil port, connecting the country to Asia. This new direct connection route uses 11 vessels on rotation, improving transit times to Asia.

After three years of uninterrupted operations at Posorja, the new service will help position Guayaquil and Ecuador as a key hub, not just for the west coast of South America, but also the South Pacific.

The route expansions are part of DP World’s efforts to provide end-to-end logistics solutions, enabling seamless movement of goods from the point of production to the end user through innovative technology and global intermodal transportation services across shipping, rail and road, the company said.

Golden Week in China: How logistics comes to a standstill

5 Oct
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Golden Week is a national holiday in China that lasts for seven days. It is typically celebrated from October 1-7 and is a time for Chinese citizens to travel and visit family. This holiday can have a significant impact on logistics due to the increased demand for travel both within China and internationally.

What is the Chinese Golden Week?

As one of the world’s biggest and most important markets, China faces huge pressure on its logistical infrastructures to maintain a certain level of productivity and efficiency to keep the global supply chain oiled, running, and stable.

From factories and warehouses to ports, terminals, and more, Chinese workers across all logistical sectors clock long hours all year round to ensure the upkeep of the supply network worldwide.

But twice a year, the world’s largest exporter permits itself a break.

Known as the Golden Week in China, there are two such week-long respites in the country — one in each half of the year.

The first, known as the Chinese Lunar New Year Golden Week, is at the start of the year in January/February to give people time off to celebrate the Chinese New Year.

The second, the National Day Golden Week, is part of the country’s national day celebrations and happens in October — right in the middle of the shipping peak season.

Given China’s influence on the global market and world trade, a week-long —albeit anticipated— lull has the potential to cause chaos on supply chain operations and rippling effects and logistical delays around the world.

In this article, we’ll be focusing on the National Day Golden Week in October. But to understand how the National Day Golden Week in China affects logistics, we must first dive into some basic facts about the holiday.

When is the Golden Week in China?

The National Golden Week in China takes place in the first week of October every year to celebrate the founding of the People’s Republic of China.

The Chinese Golden Week runs every year from the 1 October (Tuesday) to the 7 October (Monday).

What happens during the Golden Week in China?

During the Golden Week in China, workers take a break from the hustles and bustles of life. Throngs of travellers crowd trains, buses, airports, to either get home to visit their families or travel.

And while China deals with the travel logistics of its Golden Week, the rest of the world grapples with the impact this has on their supply chain logistics.

Over the course of the Golden Week, factories across the country close and production comes to a standstill. Likewise, at ports and terminals, work and personnel are reduced to the bare minimum.

With operations running at a tiny fraction of full speed, productivity and efficiency levels shrink and it becomes logistically impossible for exporters and importers to get their goods moving into and out of China.

That means that all the action has to take place before the festivities begin.

How China Golden Week affects logistics

In the weeks leading up to the China Golden Week, demand for Chinese exports skyrockets as businesses attempt to get their exports out before operations in China completely shut down.

In response to the activity deficit, shipping carriers often announce service cuts.

At the time of writing, two of the main shipping alliances have announced cuts of 15 weekly sailings from Asia to North America:

  • Nine to the West Coast
  • Four to the East Coast
  • Two to the Gulf Coast

Even post-Golden Week, capacity and personnel often remain limited and production can be slow to pick up. Carriers may also continue to cancel sailings in the weeks that follow.

That said, failure to get your merchandise into or out of China before the festivities may result in dire consequences, as delays from the Golden Week can sometimes last for months.

For businesses, this may translate to potential breaches in contracts, accruing delay fees, low sales figures, and so on.

The Golden Week Effect on Sea Freight, Air Freight, and Rail Freight

The effect of Golden Week on China’s transportation infrastructure is significant.

During Golden Week, China’s seaports and airports are often congested with travelers and freight. For example, the number of containers handled at the Port of Shanghai typically surges during Golden Week. This can lead to delays in loading and unloading ships and in the movement of containers to and from inland destinations.

The increased demand for transportation services during Golden Week can also lead to higher air and rail freight prices. This is due to the limited capacity of these transportation networks and the fact that many freight companies schedule their shipments around the holiday to avoid delays.

Golden Week can also have an impact on global supply chains. Many factories in China shut down for the holiday, which can lead to disruptions in the production of goods exported worldwide. This is particularly true for products that require parts or components from China. For example, the Golden Week shutdown of a factory that produces smartphone cases could lead to delays in shipments of those cases to other countries.

The Golden Week effect is not limited to China. It can also be seen in other countries with large numbers of Chinese tourists, such as Thailand and Japan. These countries often see an increase in tourism during Golden Week and a corresponding increase in the demand for goods and services. This can lead to higher prices for hotel rooms, restaurants, and other tourist attractions.

The Golden Week effect on rates and availability

It is no coincidence that the Golden Week in China takes place during the shipping peak season. In fact, it is considered to be the trigger to the first wave of soaring rates, high demand, low space and equipment availability, roll-overs, and congestions.

“Technically, China’s Golden Week is what kick-starts the shipping peak season. We see the first rate increases as early as July or August as shippers fight for space.

As operations slowly resume after the Golden Week, there’s a second wave of price increases as shipping preparations for Christmas and Chinese New Year get underway.”

— Aliona Yurlova, International Business Development Expert at iContainers

High demand, low space and equipment availability, roll-overs, and congestions are synonymous with both the China Golden Week and the shipping peak season.

But how are they a direct factor of the fluctuating and soaring shipping costs?

High demand and low availability

In the weeks prior to the start of the Golden Week, demand for exports out of China surge.

This is in anticipation of the shutdown as businesses importing from China try to secure a spot on outgoing vessels to ensure their goods are out of the country before production in the world’s largest exporter comes to a halt.

In response to this rising demand, shipping carriers increase spot rates. As of the beginning of September, spot rates from China to the North American West Coast is at its highest level in two months.

Amid this rush, the industry also faces scarcity of containers, slots, truckers, and everything in between. Shippers should be prepared to fork out more to secure not only a slot on a container vessel, but also for the equipment required for their shipments.

The standard General Rate Increases (GRIs) aside, there are also other surcharges to consider.

Given the higher demand for Chinese exports in comparison with Chinese imports, there’s often an urgent need containers to be returned to the terminal to manage the demand at Chinese ports.

This is when carriers begin implementing surcharges such as the Equipment Imbalance Surcharge (EIS) to compensate for the cost of ferrying empty containers back to Chinese ports to meet export demand.

Differing Golden Week strategies by carriers

The import-export imbalance caused by China’s National Day Golden Week also prompts vastly differing rate strategies by shipping carriers.

Despite the falling demand for Chinese imports, larger and more influential carriers, which have the benefit of a superior service (direct routes and shorter transit times) and reputation, tend to maintain their rates instead of lowering them to encourage sales.

In the event that there’s insufficient cargo to warrant a sailing, blank sailings and service cuts are normally announced. This is also to prevent FAK spot rates from falling below market level. As a result, ports often become more congested with rolled containers.

Smaller and Asian carriers, on the other hand, manage the softening import demand by lowering their rates. This is done even at a loss as they expect to be able to recover from the significantly higher rates for Chinese exports.

“Given this scenario, more cargo headed for China end up being booked with smaller carriers offering lower import rates. But given their limited capacity, this often results in the failure to match demand and cargo ends up getting rolled.

It’s this and the larger carriers’ blank sailings that contribute to the congestion we see before the Golden Week in China.”

— Aliona Yurlova

Is the Golden Week relevant only if you ship goods from or to China?

Golden Week is a national holiday in China, and many businesses close for the week. This can lead to disruptions in the supply chain, especially if your business relies on goods from or to China. If you’re shipping goods from or to China during Golden Week, it’s important to plan and allow extra time for delays.

Opportunity for some businesses

For there to be a loser, there must be a winner.

Despite the potential chaos the China Golden Week may cause to businesses, if managed properly, some companies can actually benefit from the operational shutdown in China.

Travel and consumption —both domestic and abroad— soar during the week-long holiday.

In 2021, nearly 700 million Chinese traveled domestically and abroad during the October Golden Week. Most visited neighboring Asian territories including Japan, Thailand, Hong Kong, and South Korea.

Domestically, the Golden Week consumption in 2020 reached $68.8 billion.

As an exporter, getting your merchandise into China and the popular holiday destinations of Chinese tourists in time for Golden Week could help to lift sales.

The boost to these neighboring territories doesn’t only come from the holidaying Chinese.

As Chinese production shuts down, overseas SMEs may begin looking at neighboring countries as an alternative source for their imports.

These are great opportunities for alternative markets and providers. Vietnam, for example, recently signed a free trade agreement with the EU. This may result in a European push towards Vietnamese imports instead of China.

Going by the same logic, SMEs may also turn to their local distributors, given that importing from China during the Golden Week isn’t an option.

Golden Week in China: How logistics comes to a standstill
Evergreen’s 2nd 24,000 TEU behemoth delivered

Evergreen’s 2nd 24,000 TEU behemoth delivered

22 Sep
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Taiwanese shipping firm Evergreen Marine has taken delivery of the second 24,000 TEU containership from Hudong–Zhonghua Shipbuilding, a subsidiary of China State Shipbuilding Corporation.

The ultra-large boxship, named Ever Aria, is a sister ship to Ever Alot, which was delivered to the container shipping company in June this year. Both boxships have been flagged in Panama. The duo has claimed the title of the world’s largest containerships.

The delivery was announced on September 13, twelve days ahead of schedule, the shipbuilder said.

Ever Aria is part of nine vessels being built by Hudong-Zhonghua Shipbuilding in China to ABS class.

The 24,000 TEU containerships have been independently designed by Hudong Zhonghua, and they are fitted with a myriad of green features including high efficiency, energy-saving, and safety solutions in line with Tier III emission requirements.

As disclosed, the ships have a bulbous bow design, large-diameter propellers, and energy-saving ducts to ensure low energy consumption. They are also fitted with hybrid scrubbers.

The 400-meter megamax-24 type ship will serve ports between Asia and Europe. It can load more than 24,000 standard containers at a time, and the maximum stacking layer can reach 25 layers, which is equivalent to the height of a 22-story building. According to its builder, it can carry 10% more weight than a 23,000 TEU containership.

One more vessel from the series is expected to be delivered by the end of this year, while another five ships are at different stages of construction.

World’s largest container line is rerouting its fleet to avoid collisions with endangered blue whales, the largest animals on earth

12 Sep
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The largest container line in the world has rerouted its ships passing near the coast of Sri Lanka in order to avoid potential collisions with endangered blue whales.

“MSC Mediterranean Shipping Company has taken a major step to help protect blue whales and other cetaceans living and feeding in the waters off the coast of Sri Lanka by modifying navigation guidance in line with the advice of scientists and other key actors in the maritime sector,” MSC said in a statement provided to Insider.

MSC said the action was taken in response to research conducted by the International Fund for Animal Welfare (IFAW) along with other groups and universities. The vessels passing through Sri Lanka’s coastal waters will now travel about 15 nautical miles to the south from the previous route.

Blue whales can be found year-round off the southern tip of Sri Lanka in the Indian Ocean, resulting in a high risk of collisions as the usual international shipping lanes pass right through the area where most of the whales congregate, the IFAW said in a statementpraising MSC’s rerouting.

 

“By ensuring these small changes, MSC is making a significant difference for these endangered whales. Whales often die as a result of collisions and this population is at risk. Ship strikes are both a conservation and a welfare problem, and even one whale death is one too many,” Sharon Livermore, the director of marine conservation at IFAW, said.

MSC’s voluntary rerouting does not impact other shipping carriers, but advocates hope their decision could help lead to permanent changes to the official shipping lane that would impact all vessels. Research conducted on the area’s blue whale population found that adjusting the shipping lane would reduce the risk of a ship striking a whale by 95%, according to IFWA.

 

“Re-routeing is the key hope to turn the tide for blue whales off Sri Lanka. It also demonstrates to the Sri Lankan government that now is the time to take appropriate action and move the shipping lane out of blue whale habitat for all merchant vessels,” Nicolas Entrup, the director of International Relations at OceanCare, said.

Blue whales are the largest living animals on earth. They can reach 80 to 100 feet in length and live for 70 to 80 years. The International Union for Conservation of Nature lists blue whales as endangered, noting the species was hunted to the brink of extinction by the 1960s, at which time it was given international protections.

 

While hunting blue whales is prohibited, the species continues to be threatened, primarily due to declines in its primary food source, krill. The decline in krill has been linked to the climate crisis, ocean acidification, and other factors.

MSC became the largest container line in the world earlier this year, with a fleet capable of carrying 4.3 million standard 20-foot containers.

World’s largest container line is rerouting its fleet to avoid collisions with endangered blue whales, the largest animals on earth
TotalEnergies Marine Fuels Completes COSCO SHIPPING Lines’ First Bunkering of Marine Biofuel

TotalEnergies Marine Fuels Completes COSCO SHIPPING Lines’ First Bunkering of Marine Biofuel

1 Sep
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TotalEnergies Marine Fuels has successfully completed the first refuelling of a COSCO Shipping Lines containership with sustainable marine biofuel. This operation marks TotalEnergies’ first biofuel bunkering operation for a containership in Singapore.

On 11th July 2022, the 4,250 TEU COSCO HOUSTON container vessel was bunkered with TotalEnergies-supplied biofuel in Singapore waters, via ship-to-ship transfer. VLSFO (Very Low Sulfur Fuel Oil) blended with 20% second-generation, waste-based and ISCC-certified UCOME (Used Cooking Oil Methyl Ester), was bunkered via an operation that was made possible with support from the Maritime and Port Authority of Singapore (MPA) and the involvement of local partners such as tank storage company, Vopak Terminals Singapore at Penjuru.

From a well-to-wake assessment, the biofuel will reduce approximately 17% of Greenhouse Gas (GHG) emissions compared with conventional fuel oil. The biofuel has been consumed during the container vessel’s voyage to Jakarta, Indonesia.

Laura Ong, General Manager of Trading and Operations for Asia Pacific, TotalEnergies Marine Fuels, based in Singapore, said: “We are honoured to partner COSCO Shipping Lines, one of the world’s largest container shipping companies, in their decarbonization journey with the provision of their first biofuel bunker stem. This successful collaboration lays a foundation for both companies to explore new joint initiatives that promote the introduction of clean, low-carbon alternative fuels.”

Laura added: “This milestone bio-bunkering operation also further validates the important role of biofuels in decarbonizing conventional marine fuels, and the potential greenhouse gas reduction gains it can bring to existing vessels. In line with TotalEnergies’ climate ambition to reach net-zero emissions by 2050 together with society, we will continue to scale up our biofuel capabilities and to support the growing interest for sustainable marine biofuels in this region.”

 

This operation follows successful biofuel bunkering trials that TotalEnergies Marine Fuels performed in Singapore with a vehicle carrier operated by Mitsui O.S.K. Lines, Ltd. (MOL) and a bulk carrier chartered by NYK Line this year.

Biofuels as a Marine Fuel
Biofuels provide an immediate and sustainable solution to decarbonize shipping today, as they can be blended or dropped into existing conventional fuels with little or no technological developments required on vessels.

As part of TotalEnergies’ strategy to produce a new generation of biofuels for use in transport, TotalEnergies is investing in advanced biofuels projects based on sustainable feedstock , thereby sourcing from the circular economy and limiting the competition for and impact on arable land.

These initiatives reinforce TotalEnergies’ climate ambition to reach net-zero emissions by 2050 together with society. In parallel, TotalEnergies Marine Fuels is committed to drive the decarbonization of shipping through the provision of clean and low-carbon marine fuel solutions across the short and long-term.

Panama Canal Calls on Ships to Protect Marine Life as Nearby Annual Migration Begins

23 Aug
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By promoting seasonal traffic lanes and speed limits, the waterway hopes to considerably decrease the risk of vessels striking migrating whales and other large aquatic mammals.
Starting August 1, 2022, through November 30, 2022, the Panama Canal is calling on vessels to follow annual speed and navigational measures to prevent collisions with whales, dolphins, and other large aquatic mammals beginning their seasonal migration nearby the waterway.

Vessels sailing to and from the Canal during this period are asked to stay within designated navigation areas known as Traffic Separation Schemes (TSS), which minimize areas of overlap between vessels and migrating marine life. The annual measures set by the International Maritime Organization (IMO) also require that vessels entering or exiting the Canal via the Pacific Ocean keep their speed at or below 10 knots, a practice known as Vessel Speed Reduction (VSR).

“As facilitators of global maritime trade, it is our responsibility to minimize the environmental impacts of our operations,” said Panama Canal Administrator Ricaurte Vásquez Morales. “These measures represent some of the simple, yet critical ways the Panama Canal and shipping lines must work together to ensure a more sustainable future for world commerce.”

Since the TSS measures were introduced in 2014, the likelihood of serious incidents has decreased considerably for vessels and marine life, including for humpback whales, which migrate from northern and southern latitudes during their winter season to Panama’s warm waters to give birth and to raise their calves. According to the Smithsonian Tropical Research Institute (STRI), ship strikes are among the most concerning human threats to whale populations, though lowering vessel speed can give the mammals sufficient time to respond and avoid collisions with vessels, while also allowing vessels to stop or maneuver accordingly. A STRI study confirmed that fatal accidents between whales and vessels were 38 percent lower between 2017 and 2019 when compared between 2009 and 2011, before the TSS measures were implemented.

The TSS policies have also been found to bolster maritime safety and reductions of greenhouse gas (GHG) emissions. Data obtained by the Panama Canal from vessels’ automatic identification systems (AIS) individual automatic ship identification systems found that those who followed these measures between 2017 and 2021 saved more than 30,000 tons of CO2 in total, though results vary by vessel type, size, and fuel.

The annual TSS program shows how making a few small changes can lead to outsized benefits when it comes to sustainability,” said Maxim Rebolledo, Environmental Specialist at the Panama Canal. “We appreciate our customers for their partnership on this issue and the Panama Canal’s broader efforts to safeguard the environment.”

As the only major waterway that relies on freshwater, and a leader in global trade and the maritime industry, the Panama Canal implements initiatives to maximize environmental and operations efficiencies with a positive impact on the reduction of GHG. Since its inception, the Panama Canal has reduced over 850 million tons of CO2. Today, the Panama Canal continues being a strong supporter of, and an active participant in, the creation of the IMO’s industry-wide regulations.
Source: The Panama Canal Authority (ACP)

Panama Canal Calls on Ships to Protect Marine Life as Nearby Annual Migration Begins
As East Coast ports take more share of China trade, expect more bottlenecks for supply chain

As East Coast ports take more share of China trade, expect more bottlenecks for supply chain

22 Aug
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  • One in five container ships currently arrive on time on the East Coast, according to Sea-Intelligence.
  • East Coast vessel volumes are up because of fears of a West Coast labor strike, and transit time is increasing on the East Coast as more vessels are anchored offshore.
  • As more vessels pressure East Coast ports, West Coast vessel schedule reliability reached its highest level in over a year.

Port productivity remains a huge hurdle for the U.S. supply chain as billions of dollars of products are at anchor or landlocked, and a shift to use of East Coast ports over West Coast ports creates new pressures.

In the past three months, vessel capacity between the Far East and the U.S. East Coast has risen by 18.9% year on year, according to ocean and air freight research firm Xeneta. While the West Coast continues to have the lead in market share of Far East containers at 59.8%, it is continuing to lose more capacity to the East Coast as logistic managers move away from the West Coast out of fear of a labor strike.

In the last three months, container capacity also has dropped on the West Coast, by 1.7%. This has an impact on trucking and rail companies that serve the West Coast because there is less container volume to move. Rail company BNSF, owned by Berkshire Hathaway, and Union Pacific, specifically serve the West Coast ports. On the flip side, it is a boom in rail and truck service on the East Coast with the increase in volume. Norfolk Southern and CSX are the rail companies that serve the East coast ports. Unlike rail, trucking companies have the ability to serve both coasts.

“As more vessels and cargo heads east, there’s been an 11.9% increase in volumes so far this year, with a 7.3% year-on-year increase in May alone,” said Peter Sand, chief shipping for Xeneta. “This pressurizes capacity, and there’s a price to pay in terms of reliability. So, in a way, the East Coast becomes a victim of its own success and the West has the breathing space to recover somewhat.”

The lack of breathing space, and delay in container delivery, can be tracked through a vessel’s total transit time — the time it takes a vessel to travel from its port of origin to its docking at the destination port.

Time is money, and a vessel or container at rest takes both out of the supply chain for faster use. It is also one of the drivers of rising container prices.

According to Project44, the average transit time from China to the West Coast pre-pandemic was under 20 days to 25 days on the West Coast; and 38 days on the East Coast.

“For the West Coast, travel time now has dropped back down to 24 days,” said Josh Brazil, vice president of supply chain insights for Project44. “So we’re in a good spot right now on the West Coast, but again, switching to the East Coast, those transit times have risen. The increased transit time tells us there are more delays at the port because of congestion. Unfortunately, with more vessels calling the East Coast in the coming months, we expect bottlenecks to continue.”

The CNBC Supply Chain Heat Map has been tracking the increased flow of trade away from the West Coast to the East Coast and the congestion it is creating.

Waiting times in Savannah have increased for 10 consecutive weeks, according to Alex Charvalias, supply chain in-transit visibility lead at MarineTraffic. That’s up from a single waiting day in May 2022 to over 13 days currently. “With no signs of ease in the following weeks,″ Charvalias said.

Sea-Intelligence is reporting that East Coast congestion has now deteriorated to the point where less than one in five container ships currently arrive on time (18.7%).

“The ports in Europe and in China are larger and automated so they are able to deal with disruptions better,” said Brazil. “Those ports have driverless, chassis trucks to pick up those boxes, and it really does speed up the process to get vessels unloaded and loaded,” he said.

In China, a vessel may get processed in less than a day, according to Brazil. In Europe, it may take two days. But in the U.S., for the Port of Los Angeles and other ports, it may take four to six days.

Automation is one of the issues in the ongoing contract negotiations between West Coast ports and the labor union for dock workers.

“So there really is kind of a big difference there in terms of what automation can do. Automation is a contentious subject because there are jobs associated with it. This will be a subject of contention for a long time to come,” Brazil said.

The CNBC Supply Chain Heat Map data providers are artificial intelligence and predictive analytics company Everstream Analytics; global freight booking platform Freightos, creator of the Freightos Baltic Dry Index; logistics provider OL USA; supply chain intelligence platform FreightWaves; supply chain platform Blume Global; third-party logistics provider Orient Star Group; marine analytics firm MarineTraffic; maritime visibility data company Project44; maritime transport data company MDS Transmodal UK; ocean and air freight rate benchmarking and market analytics platform Xeneta; leading provider of research and analysis Sea-Intelligence ApS; Crane Worldwide Logistics; and air, DHL Global Forwarding; freight logistics provider Seko Logistics; and Planet,  provider of global, daily satellite imagery and geospatial solutions.

Maersk North America about the port congestion

18 Aug
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For the past several months, East Coast congestion has been driven by both Transpacific market activity as well as a robust Transatlantic trade. Looking ahead to September, we are still seeing strong East Coast demand relative to the West Coast. As a result, port congestion remains and there have been delays on Transatlantic Services between North America and Northern Europe.

Vessel wait times are running 1-3 weeks in Newark PNCT, 1-3 days at APM Terminals Elizabeth, 2-18 days for Houston down in the Gulf, and 10-17 days in Savannah where 35 ships are at anchorage, five of which are Maersk vessels. To ease this congestion, we are arranging for extra gap loader ships in September where feasible for the East Coast.

The disruptions experienced on the North American and Northern European networks have required adjustments to our Transatlantic services, including resetting schedules. Currently, we are adding extra vessels to help reduce the time between departures. The extra vessels will avoid heavily congested terminals, such as Newark PNCT, and enable booking diversions to alternative locations such as Norfolk or Baltimore when possible. You can read our complete Transatlantic Services FAQ online for full details.

For all gateways, customers are asked to please provide their continued support in prioritizing the pickup of aging cargo as we work together with our terminal and rail partners to restore fluidity in operations for a more reliable supply chain.

Maersk North America about the port congestion
Maersk – Dean Rodin new General Manager West Coast of South America

Maersk – Dean Rodin new General Manager West Coast of South America

10 Aug
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Maersk announced that Dean Rodin will take over as General Manager West Coast South America, based in Santiago, Chile, replacing Francisco Ulloa from August 15, 2022.

Rodin has been with Maersk for 22 years and has held various positions in Europe and Africa. He was head of the Ivory Coast cluster in 2008, and then moved to Latin America in 2011 as Maersk Line’s Cluster leader for the Caribbean. He then moved on to Europe to become head of maritime trade for Maersk in Latin America in Copenhagen, eventually returning to the region leading the Regional Ocean Management team in Panama.

“The last two years as part of the Regional Ocean Management team have been very rewarding, both professionally and personally. The team achieved excellent results in the Maritime Transportation business line, while transforming and growing the Latin American client list. I am taking on this new challenge of working with the South American West Coast team while reinforcing our role as a logistics integrator for our customers in the region,” said Rodin.

Francisco Ulloa will take the position of network and market director for East-West trade routes, also from August 15, 2022, from Denmark. The executive has more than 27 years of experience. He joined Maersk in 2010 in Trade Management and was then responsible for the launch of Sealand on the west coast of South America in 2015, later serving as general manager of the west coast of South America, in Chile, during the last six years, during which time the area has grown from 250 to more than 2,000 employees.

“A core element of our integration strategy is offering reliable shipping products, which are the foundation of our logistics integrator strategy. For this, it is essential to understand the needs of our clients in the main east-west maritime routes, with a view to the digitalization and decarbonization of the industry,” said Ulloa.

Top 5 Most Expensive Ports in the World Located in the U.S.

1 Aug
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Demurrage and Detention (D&D) charges imposed on the US shippers by container lines continue to be the most expensive in the world and have increased this year even as global average fees have fallen from the record highs of 2021, according to Container xChange, the world’s leading online platform for the leasing and trading of shipping containers.

Container xChange’s Demurrage & Detention Benchmark 2022 report, published today, ranks the most expensive global ports for D&D charges (see definitions below) levied by container lines on customers two weeks after a cargo arrives at the port or is discharged from the vessel.

Even as U.S. regulators have taken a keen interest in container line behavior amid soaring U.S. inflation and historically high shipping costs, U.S. ports occupy the top five spots in Container xChange’s rank list of “60 ports ranked by highest to lowest D&D charges across shipping lines”.

New York leads the way in 1st place followed by the ports of Long Beach, Los Angeles, Oakland and Savannah. All five ports are more than 2-3 times more expensive than Hong Kong in 7th spot and at least 20 times more expensive than leading Asian container hubs such as Dalian in China and Busan in Korea.

Political spotlight on D&D 

Under heavy pressure from shipper lobbyists, President Biden signed the Ocean Shipping Reform Act into law on June 16, 2022. OSRA gives the Federal Maritime Commission the power to act more assertively on D&D charges and shifts the burden of proof for the reasonableness of fees to ocean carriers instead of shippers.

“Throughout this pandemic as shipping costs have soared and inflation has become a threat to the U.S. economy, the focus on container line behavior by politicians and regulators has magnified,” said Christian Roeloffs, co-founder of Container xChange.

“U.S. agricultural shippers have been particularly outspoken about their inability to find affordable empty containers for exports. But importers have been equally outraged by what many believe has been profiteering on D&D charges by container lines. Some have started legal actions against carriers.

“This really came into the cross hairs of President Joe Biden this year when he has been highly critical of container lines. His administration addressed D&D in the Ocean Shipping Reform Act and we’re now waiting to see how this will be implemented and whether it will change shipper or carrier behavior significantly.”

Global average D&Ds fall; US hubs see rises 

Container xChange’s Demurrage & Detention Benchmark 2022 report notes that global average D&D charges levied by container lines on customers two weeks after a cargo was discharged from the vessel increased by 38% for standard-sized containers from $586 in 2020 to $868 in 2021.

So far in 2022, average D&D charges by major ports have declined to an average of $664 per container by 26%, although fees remain far higher than pre-pandemic at around 12%.

Even so,​ the U.S. shippers are not benefitting from these global declines in D&D charges. For example, in May 2022 the average charges levied by container lines on customers two weeks after a box was discharged from the vessel at the port of Long Beach was $2730 per container, up from $2638 a year earlier. At the port of Los Angeles in May 2022, the average D&D fees increased from $2594 per container in 2021 to $2672 per container.

Fees vary by port and carrier 

Container xChange’s Demurrage & Detention Benchmark 2022 report also notes that D&D charges vary widely by port and by the carrier.

Of the leading container lines across ports, COSCO currently has the lowest D&D charges while HMM’s D&D fees are the highest.

By region, D&D charges in May in the US were the highest at £2,692 per container. This compared to $549 in Europe, $482 in India, $453 in China and $366 in the ‘Rest of Asia’.

Container xChange’s Demurrage & Detention Benchmark 2022 report also outlines how choosing the right carrier for a specific port can significantly impact D&D costs.

For example, notes the report, at Rotterdam in mid-year, average D&D charges at the end of the two-week period were $564 per container. However, shipping with ONE cost $809 container “which, when compared to the port’s average D&D charges, will escalate your container shipping costs by 43%”.

Methodology 

To compile the report, Container xChange collected more than 20,000 data points from publicly available sources. These were used to compare D&D rates imposed on customers by the world’s eighth-largest shipping lines across 60 container ports in the world. The data was then compared against data collected by Container xChange mid-year 2021 and 2020.

Commenting on Container xChange’s Demurrage & Detention Benchmark 2022 report, David Lademan, Associate Editor of the Container Markets division at S&P Global Commodity Insights, said, “The issue of demurrage and detention as a part of the overall cost of freight has been brought to the fore because of the market imbalances that we have seen over the past two years.

Many shippers have reported that demurrage charges have been levied against them despite cargo being buried under stacks of containers at logjammed ports, which leaves them functionally unable to retrieve their containers. ​

On the other hand, cargo owners have altered their behavior with inland moves, as detention fees have grown in value and frequency, with many ocean carriers stripping free time in a bid to keep container velocity elevated. Many shippers are now in the practice of cross-docking cargos, to return containers quickly and avoid elevated fees.​ This comes amid an already protracted period of turbulent market conditions.​”

Cutting D&D costs 

Dr Johannes Schlingmeier, CEO & Founder of Container xChange, said using shipper-owned containers (SOCs) instead of shipping line/carrier-owned containers (COCs) could help reduce shipper supply chain costs.

“Taking the SOC options means you’re not leasing a container from the shipping line,” he said. “So, if your container gets held up inside or outside of the terminal, you won’t have to pay late fees to them. ​

 “More generally, I think we need common sense to prevail on D&D fees rather than regulatory intervention. Better planning by all supply chain partners and better communication between logistics partners and stakeholders can help reduce liability and exposure.”

Top 5 Most Expensive Ports in the World Located in the U.S.