Did You Know That..

…Maersk justifies more rate hikes amid analyst doubt on Asia-Europe capacity loss. Danish giant’s warning of spiralling costs for Asia-Europe box shipping as it justifies more freight hikes, but analyst challenges carrier’s claims that 15%-20% of capacity is lost to Middle East. While tensions in the Middle East remain unresolved, carriers are pushing for a new round of freight rate increases. CMA CGM announced that the European basic port freight for FAK starting from June 1, is as high as USD 6,000. From other sources we learned that Maersk rate is USD5600/40HQ from 27-May to 31-May, USD6100/40HQ from 1-Jun to 2-Jun. Rumour has it that rates may hike to USD 10K level again in the summer.

…Significant capacity issues are expected to hit the market with over 100,000 TEU removed from the Asia-Europe trade lane in the first two weeks of May. The Red Sea crisis continues to play havoc on freight rates as the latest round of planned rate hikes by carriers is here to stay.

…Houthis’ east Mediterranean threat should be taken with pinch of salt. Iran-backed militant group hailed a new phase in Red Sea aggression on Friday, which includes the targeting of vessels in the Mediterranean Sea. Attacks have so far been concentrated in the southern Red Sea and Gulf of Aden. Accurately targeting vessels far away from Houthi-controlled territory would be difficult, but the underlying warning should not be dismissed.

…Shipping’s crystal ball: The low-demand, low-rate, high-cost 2050 scenario. Transient geopolitical upside masking deteriorating long-term fundamentals, says Danish Ship Finance. Danish Ship Finance believes structurally declining demand and continued high newbuilding costs will force shipping to embrace more long-term contracts and tap more institutional money in the decades ahead.

…Here's the market review by our friend Steven Yan from FS China. Shipping costs have surged again, Even if it's not the traditional peak season

1. European routes have been significantly affected by the crisis in the Red Sea. Forcing ships to detour around Africa. The African route originally had limited capacity, but this year has seen an influx of vessels. Longer voyages and increased transshipment ports have led to more vessels needing to operate. Extended journeys coupled with port congestion have resulted in many containers not returning. This is also the main reason for the recent container

shortage.

2. The price increase in South America is mainly due to Brazil's and Mexico ' s plans to impose additional tariffs on Chinese electric vehicles in July and beyond. Many automakers are desperately shipping to these regions without actual orders. Electric vehicles companies have seized majority of shipping resources. Many shipping companies withdrew vessels from running to West Africa for these large orders, leading to a general increase in rates in West Africa.

These EV makers not only compete for shipping resources but also reportedly fill up destination ports' yard quickly with automobiles.

3. The US election has been claiming future tariffs of 50%-60% on Chinese goods.

Nearing the election day, which has led some Chinese companies to increase their investment in South America. Additionally, many importers are stocking up in advance, causing the peak season to arrive early.

Shipping giants are taking advantage of the above reasons and actively intacidly raising prices together. Exporting companies need to plan their shipping schedules in advance, as everyone is scrambling for containers.

…As also reported by our friend Neal Rosenberg, CEO of Rose Containerline Inc. in New York, President Joe Biden is hiking tariffs on $18 billion in Chinese goods including electric vehicles, batteries, semiconductors, steel, aluminum, critical minerals, solar cells, ship-to-shore cranes, and medical products, while retaining Trump-era tariffs on over $300 billion in goods.

 
…Alliance carriers currently deploy 340 container ships on Asia-Europe, but need another 36 to guarantee weekly sailings.

…Rising US imports add more fuel to resurgent Red Sea-driven rate rally. National Retail Federation: May-August imports to top 2m teu per month. Spot rates are spiking again on the Asia-US west coast route, a trade that is not directly affected by canal restrictions. Strong US demand — possibly including front-loading — is coinciding with indirect capacity effects from Red Sea disruptions.

…CMA CGM is looking to consolidate its footing in the intra-Asia trades, as the market’s potential grows in response to diversifying supply chains in Asia. The French liner will deploy three vessels to a consortium of six Asian regional lines to operate a butterfly string, designed with two strings. The vessel-sharing agreement also includes three ships from Emirates Shipping Line and one each from Pacific International Lines, RCL Feeder, KMTC, CU Lines and Global Feeder Shipping, with capacities ranging between 4,000 and 6,000 teu.

…Brazil’s Porto Alegre port underwater. The port in south Brazil is expected to be closed for around 30 days. Floods and landslides have killed at least 100 people in the state of Rio Grande do Sul, Brazil, as well as closing the port in the state capital Porto Alegre, in the worst flooding to hit the Brazilian state of Rio Grande do Sul in 80 years.

…The E-commerce sector continues to dominate the Air Freight industry with Chinese companies such as Shein and Temu seen as the major contributing factor dictating capacity or rate fluctuations from the Far East.

…Namibia’s Walvis Bay could become key green bunkering hub. Port of Antwerp-Bruges will co-finance development at the site with Namibian Ports Authority. The project will export ammonia to Europe alongside acting as a green bunkering hub, which Port of Antwerp-Bruges International chief executive said is key to securing confidence.

…DP World makes moves in Laos. At Laos’s first special economic zone, DP World is completing an acquisition and thus gaining access to the Savannakhet dry port. Savan Logistics, a logistics provider in Southeast Asia, has been taken over by DP World.

…Baltimore channel reopening remains on track as salvors detonate bridge truss. Salvors made precision cuts using explosive charges in the portion of bridge resting on top of Dali on Monday. Salvors successfully used explosive charges to remove parts of the bridge’s wreckage from the 9,900 teu Dali, a significant step in the efforts to refloat the vessel and reopen the channel. Baltimore’s federal channel remains on track to reopen by month’s end, Maryland Governor Wes Moore told reporters on Monday ahead of the controlled detonations.

…Australia bans live sheep exports from 2028. Trade can continue until May 1, 2028, when the ban comes into force. The Australian government planned to ban live sheep exports by sea in 2022. Debate has raged for years between animal rights groups and farmers about animal welfare, while livestock carriers have a chequered safety record.
 
…Save the Date 1. Regional Europe Meeting on 17 and 18 October in Vienna, hosted by Columbus-Cargo, our esteemed partner in Austria. In addition to the "DYKT" of last week, the article mentioned by Mariam/Transsolve is showing Vienna on Place 2 of the Most Chilled-Out Cities. Another ranking is showing Vienna under category "Quality of Living"  at No 1.  https://www.mercer.com/insights/total-rewards/talent-mobility-insights/quality-of-living-city-ranking. So you know, Vienna is the place to be !

We already received a number of early bird registrations for the regional meeting, from inside and outside Europe.

…Save the Date 2. the next AGM will take place in the Philippines (Boracay), hosted by CBPI and the provisional date for this event is set at 10-14 March, 2025. Please save the dates for both events in your calendar.
 

…EAA Network website renewal project is making fine progress. We are busy collecting all the content, footage etc. from our members and we expect to go life with the new website before the end of this month. If not done already, please submit the necessary information to complete this project in a timely manner.

…AstraZeneca withdrew its covid-19 vaccine, one of the first to be rolled out during the pandemic, because it would be no longer commercially viable as updated jabs hit the market.
 

Wishing you all a great rest of the week ahead!