Did You Know That…

…Duration of US-China trade war is key to container shipping demand.

·         The market has already suffered three weeks of lost China-US cargo, and given transportation times, an immediate resolution would still equate to at least two months of impact

·         If US-China trade fully normalises two months from now — a scenario some might consider very optimistic — it could translate into over 1.3m teu in US cargo losses from China

·         Some analysts fear US-China trade could face extended disruptions, and that even if US tariffs on China are reduced, they could still top 50%.

The damage from the US-China trade war has already been done, even though it’s not yet apparent in the US economy. The negative effect on shipping demand in the near term and the scale of the eventual rebound when the trade war ends, hinges on the duration of the disruption.

…DSV completes Schenker acquisition. Danish logistics major expects to double in size after deal. The takeover of Germany’s DB Schenker by Denmark’s DSV will create the world’s largest logistics provider in terms of revenue.

…The great Iberian power cut need not spell disaster for renewables. But there are lessons to be learned.Shortly after noon on Monday April 28th, Spain’s electricity grid suddenly and unexpectedly lost 15 gigawatts of power—equivalent to 60% of its national demand. The massive drop caused most of the country’s electricity system to shut down, followed by much of neighbouring Portugal’s. Trains and metros ground to a halt and 35,000 passengers across Spain had to be evacuated. Traffic lights stopped working; hospitals cancelled all non-essential operations; mobile-phone networks and the internet went dark. The chaos lasted for hours. Though Portugal recovered by the end of the day, most of Spain’s electricity was not restored until 7am the next day. Red Eléctrica de España (REE), Spain’s state-controlled national electricity operator, called the blackout “exceptional and totally extraordinary”. Pedro Sánchez, Spain’s prime minister, promised to “get to the bottom” of what happened.

…Calm before the storm? European port congestion could be about to get a whole lot worse.

·         Nationwide strikes brought Antwerp to a standstill this week with more than 100 ships either awaiting clearance or departure at the height of disruption

·         Port officials expect Antwerp backlog to be cleared by the weekend, but situation remains fluid

·         Neighbouring ports including Rotterdam and Bremerhaven still to see significant knock-on effect.

Delays in Antwerp may just be the beginning, with analysts warning that Chinese cargo originally bound for the US may flood already squeezed ports in northern Europe, sparking significant congestion by mid-June.

…Chinese flows to US falling but transpacific rates holding steady.

·         SCFI Shanghai-US west coast rates are up 3% from the week tariffs took effect; Shanghai-US east coast rates are up 2%

·         Carriers have heavily blanked sailings, just as they did during the early days of Covid, to keep rates stable

·         Decline in Chinese cargo heading to the US is being offset by increases from other Asian countries as importers frontload ahead of the next reciprocal tariff deadline.

There is an anomaly amid the doom and gloom over tariffs and the plunge in Chinese cargoes to America: spot rates on the transpacific are slightly up from where they were when US President Donald Trump first hammered China with 145% levies. Carriers have been holding the line.

…Our friend Neal Rosenberg, ceo of ROSE Containerline, shared attached article about imports into the US based on insights from high-frequency shipping data. with us.

…President Donald Trump said that Houthi militants operating from yemen have agreed to stop their 18-month-long series of attacks on commercial shipping in the Red Sea. If true, this could raise container shipping overcapacity risk. Houthis tell Trump they will end attacks on Red Sea shipping. Speaking from the Oval Office, alongside new Canadian prime minister Mark Carney, Mr Trump said the news had “just filtered through this morning” in the wake of a wave of attacks by Israel and the US on Yemen’s Hodeidah Port.

…Logistics provider PSA BDP said on Tuesday that it would take a majority stake in a Mexico-based forwarder, said to be ED International, strengthening its US cross-border capabilities levereaged with parent PSA international’s global marine terminal network.

…Asia-Europe rates under strain amid shifting capacity from China-US trade.

·         Asia-Europe spot rates continued to fall amid excess capacity from new ship deliveries and vessels shifted from China-US trade

·         At least 117,000 teu has moved from China-US routes to Asia-Europe since April, worsening oversupply and limiting rate recovery despite stable demand

·         Red Sea disruptions and trade tensions persist; some capacity may return to US routes if trade talks between Beijing and Washington progress, but oversupply will likely linger.

Asia-Europe container shipping rates are under mounting pressure from overcapacity driven by new vessel deliveries as well as ships redirected from the China-US trade outpacing demand and limiting rate recovery, despite stable cargo volumes and continued Rea Sea rerouting.

…CMA CGM acquires Belgian airline. Carrier expands airfreight services with former partner. CMA CGM has been expanding its airfreight services since it launched in 2021. Acquisition of Air Belgium will add four more aircraft to its fleet.

…AD Ports to build logistics hub at East Port Said. The AD Ports Group and Egypt’s SC Zone have signed a 50-year agreement to develop the Kezad East Port Said Industrial and Logistics Zone. The 20 km² site near the Suez Canal will serve as a regional trade hub connecting Asia, Europe and Africa.

…China’s secret weapon in the trade war. Its miraculous gig economy is propping up jobs. As China’s export machine sputters under the weight of 145% tariffs, jobs are at risk. Some 16m workers are involved in the production of goods bound for America, says Goldman Sachs, a bank. Nomura, another bank, projects a possible 5.7m job losses in the near term and 15.8m in the long run as the shock ripples through the economy. China’s leaders are already yanking levers to soften the blow. At a Politburo meeting on April 25th, they vowed to increase rebates of unemployment-insurance payments for firms hit by tariffs. But there is another labour market saviour: the vast gig economy. Indeed, Donald Trump’s trade war could complete that sector’s metamorphosis from a freewheeling industry viewed with suspicion by the Communist Party, into the world’s largest state-approved e-market for labour, with a stronger safety net attached.

…Milestone for electric shipping straight from Australia. Incat has launched the world’s largest battery-electric ship, 'Hull 096', at its shipyard in Hobart. Built for Buquebus, the 130 m vessel will transport 2,100 passengers and 225 vehicles across the River Plate using only battery power

…This DYKT news bulletin will be published on the website as well, go to www.eaanetwork.com.

 Have a good rest of the week !