Did You Know That…

 

…The latest Drewry World Container Index (WCI) Index surged 12% to $2,553 per 40ft container, due to higher freight rates on Transpacific and Asia–Europe trade routes. 

 

…Hormuz crisis side effect: a sharp rise in container shipping rates.

• SCFI global composite index has doubled since the war with Iran began and is at its highest point since September 2024, during the Red Sea crisis

• Bunker fuel costs have jumped by almost 70% and container lines are successfully passing incremental costs along to shippers

• Shanghai-Los Angeles spot rates are up 59% vs late February, with Shanghai-New York rates up 66%, according to Drewry assessments.

• Spot container freight rates continue their ascent as ocean carriers pass along much higher fuel costs resulting from the effective closure of the Strait of Hormuz. If the strait doesn’t reopen soon, the impact on container market could intensify.

…We received a report again from our friend Steven Yuan of FS China regarding the China to Europe trade: The market rates have seen a notable increase starting in June, driven by aggressive rate hikes from shipping lines. These hikes are primarily supported by positive external market sentiment and stable cargo volumes on Europe-bound routes.

Looking at global container shipping, freight rates on most routes are trending upward. A closer analysis of the US routes reveals that the sharp increase in cargo volumes is largely due to front-loading by importers. This behavior stems from expectations of a tariff policy vacuum period, particularly the potential implementation of new Section 301 tariffs scheduled for July. This preemptive shipment activity, combined with high fuel costs and extended blank sailings and capacity cuts, has disrupted the previously fragile supply-demand balance.

 

On the Middle East–Red Sea routes, rate increases are largely attributable to capacity diversion caused by geopolitical tensions. Persistent access restrictions in the Persian Gulf have forced substantial cargo volumes to be rerouted via specific transshipment ports. In addition, scheduled adjustments have reduced capacity in the Red Sea, leading to a severe supply-demand imbalance.

 

On the South America routes, the rate hike is partly driven by the upcoming increase in import tariffs on EV vehicles in Brazil, effective July 1. This has prompted Chinese automakers to accelerate shipments in the near term.

This positive sentiment has also spilled over into the Europe-bound routes, encouraging shipping lines to pursue more aggressive rate increases than previously observed. Moreover, booking data on the Europe routes indicates a large volume of rolling cargo—accumulated from low-priced bookings at the end of May—which has further bolstered shipping lines' confidence in implementing substantial price jumps during the first week of the announced rate hikes.

The following rates are for your reference.

 

 

…An additional note from your editor: Major shipping lines are trying to raise freight rates, especially on busy routes such as Asia–Europe. The world's largest container carrier, Mediterranean Shipping Company (MSC), is leading the increases. In some cases MSC has announced rates that are close to double current market prices, either through higher base rates, surcharges, or premium "guaranteed space" products. Similar attempts were seen during previous periods of market disruption and capacity shortages.

…Hapag-Lloyd (HL) has launched its ‘Shefarer’ program to increase the proportion of women in maritime shipping in the long term. Together with partners Jebsen PTC, Anglo-Eastern Ship Management and Marlow Navigation, the shipping line aims to attract more women to onboard maritime professions and promote their development in the maritime environment.

…UAE confirms second pipeline to bypass Strait of Hormuz.

• UAE is fast tracking a second pipeline to Fujairah by 2027, doubling its ability to export oil without using the Strait of Hormuz

• Move follows the country’s exit from Opec and supports plans to boost production while adding flexibility to export routes

• Saudi Arabia is also exploring expanded Red Sea export capacity, although its East-West Pipeline is running below its 7m barrels per day limit.

• Adnoc has confirmed it will double its capacity to export crude oil via a second pipeline bypassing the Strait of Hormuz by next year, as it seeks to reduce reliance on the shipping chokepoint.

 

…China’s world-beating solar industry is in turmoil. The Gulf War won’t save it. As America’s war on Iran roils energy markets, China’s clean-energy companies would be expected to be cashing in. The country makes over 80% of the world’s solar panels, churning them out in vast quantities. Thanks to such efforts, renewable sources generated more electricity than coal last year around the world. Yet China’s solar industry, though world-beating, is in trouble. And the boost from the war has not been enough to steady it.…China’s solar exports have enjoyed a surge since the bombing began. But that will be small cheer to its companies, as they face three daunting problems. Domestic demand for their products is falling for the first time in decades because the country’s power grids—far and away the biggest market for solar panels—have become overloaded with the things. Solar-panel supply, meanwhile, is overabundant because of years of splashy investment in factories. And even while the war is helping solar sales in South-East Asia and Africa, protectionism has been on the rise in the bigger Western markets.

…Trump has set a 4th of July deadline for the European Union (EU) to ratify the Turnberry trade agreement between the two trading partners. Failure to do so will see him immediately increase levies to much higher levels. Representatives from the EU have stated that they remain fully committed to implementing the pact, which would cap tariffs on EU imports at 15% while removing levies for certain U.S industrial products, among other provisions.

…Britain is quietly de-Brexiting. But any Labour government will have to soften its red lines to get meaningfully closer to the EU. ANY LABOUR leadership race will renew debate over Europe. Andy Burnham, a favorite to succeed Sir Keir Starmer as Britain’s prime minister if he wins a by-election in Makerfield on June 18th, has talked of rejoining the EU, though his prospective constituents’ past support for Brexit has made him argue recently that reopening the issue may put Britain in a “permanent rut”. Wes Streeting, another candidate, is more explicit about wanting to reverse Brexit. Even Sir Keir says Britain should be at the heart of Europe again.

…Where expat escapees from Dubai end up. Will they ever return? Life in Dubai used to be about as blissful as white-collar expatriate existence gets. The private schools are good, beaches pretty, flight connections plentiful and booze legal (so long as you are not Emirati or Muslim). Expats face no income tax; it barely rains; Russian oligarchs can mingle with Western bankers, Arab property moguls and Israeli entrepreneurs. All that remains true nearly three months after America and Israel attacked Iran across the Gulf. But Dubai’s advantages must now be weighed against the risk of Iranian missiles and drones raining down. On May 18th one hit an electricity generator at the sole Emirati nuclear power plant. Although most strikes have been intercepted before they could do real damage to Dubai and other parts of the United Arab Emirates (UAE), many footloose foreign residents have already scattered. A few nabbed seats on the last flights out to America or Europe. Others drove to Muscat, in neighboring Oman, in search of alternative escape routes. Many hoped to return once the hostilities ceased. As these drag on, however, plenty are looking for a new, more peaceful bolt hole. Where are they headed? And will they ever return?

…APM Terminals and Vietnam's Hateco Group have entered into a $1.7 billion agreement to develop a new container terminal in Da Nang, representing a significant investment in Vietnam's port infrastructure and regional trade capacity. 

…Saudi Arabia has launched a new freight service called the Red Sea Express, between the Red Sea and the Mediterranean, as reported recently by the news agency ‚Africa Business Insider‘ (ABI). The connection aims to strengthen trade routes between the Middle East, Africa and Europe and circumnavigating the Strait of Hormuz. The service connects the port of Yanbu in Saudi Arabia with Ain Sokhna in Egypt and Aqaba in Jordan. Partners in the project include the shipping line Folk Maritime and the petrochemical company Sabic. The route is part of the planned ‚Red-to-Med‘ corridor, which also includes a new railway line. According to the Saudi port authority Mawani, transport times are expected to be reduced, costs lowered and supply chains stabilized. The ships deployed have capacities of approximately 1,100 teu. At the same time, Saudi Arabia aims to strengthen its non-oil exports and promote economic diversification as part of the national ‚Vision 2030‘.

…US indicts China’s container makers for global price-fixing conspiracy

• Washington indicts CIMC, Singamas, Dong Fang and CXIC along with seven executives for conspiring to fix prices and restrict output of standard dry containers from late 2019 to early 2024

• Singamas executive Vick Ma arrested in France in April and awaiting extradition; six other executives remain outside US jurisdiction

• Alleged conspiracy coincided with acute container shortage as pandemic-driven port labour crunches and inland transport disruptions created severe equipment deficits and drove up demand for new boxes.

• US prosecutors allege four Chinese container makers exploited pandemic supply chain chaos by secretly capping production and doubling prices, boosting profits nearly 100-fold.

…The Mediterranean Shipping Company (MSC) has expanded its intermodal operations in Cameroon by integrating the port of Kribi into its door-to-door logistics solutions, enhancing cargo connectivity between Cameroon and inland markets in the region. especially to the landlocked countries of Chad and the Central Africa Republic.

…War has not deterred Asian Muslims from the hajj. Yet they are finding the costs ever harder to bear. You “need a lifetime to prepare” for a “once-in-a-lifetime opportunity”, says Zahir Junid, a 57-year-old from Selangor, a state in western Malaysia. He has been saving money for decades. Recently he has been getting physically fitter, by running and playing pickleball, and keeping mentally sharp by attending talks at mosques. So, when, a few months ago, he at last secured a spot on the hajj, he knew nothing would stop him from undertaking the Islamic pilgrimage to Mecca. Not even a war. In recent months Iran has fired missiles and drones towards countries in the Gulf, including Saudi Arabia. Travel to the region has been disrupted. It has also become more expensive, as jet-fuel prices have soared. Yet around 1.7m pilgrims are nonetheless expected to take part in this year’s hajj, of which the majority will travel from Asia. On May 25th they begin five days of rituals that have changed little for centuries. These include the tawaf—walking seven times anticlockwise around the Kaaba, a building at the center of Mecca’s Grand Mosque—and the sa’i, walking or running seven times between two hills. Demand for the hajj remains high because it is one of the five “pillars” of Islam. The Koran instructs all Muslims to complete it once if they are financially and physically able. Some countries, such as Malaysia and Indonesia, always easily use up an annual quota of visas that Saudi Arabia grants them. Around 5.7m Indonesians are on a waiting-list, but the world’s biggest Muslim-majority country gets only 220,000 places. Some wait 40 years to be selected. If they are still alive when their turn comes, they are unlikely to decline it. Saudi Arabia is reported to have asked Donald Trump to delay any new strikes on Iran until after the hajj. 

…Why China is so bad at football. Xi Jinping’s masterplan was derailed by corruption and a top-down philosophy. When Football’s World Cup expanded from 32 to 48 teams for the 2026 edition, one of the biggest beneficiaries was Asia. The continent received eight direct qualifying slots, plus the possibility of a ninth team via the play-offs—up from the previous arrangement of four direct plus another possible play-off team. With close to double the number of berths on offer for Asian teams in 2026, surely China—with its massive population, lavish football spending and a president long obsessed with the sport—could qualify for only its second ever World Cup? Not even close. Finishing below regional powerhouses Oman, Indonesia and, yes, Palestine, China didn’t even make it through to the fourth round, where the final two spots were up for grabs, limping out of qualifying with barely a whimper. The men’s team can only dream of being as passably successful as the country’s women, who have qualified for the past three tournaments and reached the final in 1999.

…FS International shared a 10-minute conversation on the future of logistics, global cooperation, and long-term growth in our industry with EAA Network’s board member Mr. Aaron Lam of JNC Line in Singapore. You can open below link to watch and listen the feature.

https://www.linkedin.com/posts/fschina-mccqianhai-globalsupplychain-ugcPost-7466046334479847424-vELU/?utm_source=share&utm_medium=member_ios&rcm=ACoAAAFijlABeEMmG_QLysWD3j-Fz_6bvqrL_mg

 

 

…This year has seen the US, UK and Japan retain their positions as the top 3 champagne markets across the globe. 

 

…We received an article from our esteemed member Mr. Felipe Bermudez of TITO Smart Modal Logistics in Brazil:

Abu Dhabi Ports pays US$835 million for terminals in Santos and Itaqui.

Abu Dhabi Ports is acquiring CLI—the owner of an agricultural terminal at the Port of Santos and another terminal at the Port of Itaqui—for US$835 million (...).

Read more at: https://braziljournal.com/breaking-abu-dhabi-ports-paga-us-835-milhoes-por-terminais-em-santos-e-itaqui.

 

…SpaceX officially launched its blockbuster IPO. The space rocket firm, led by Elon Musk, hopes to raise around $75bn when it floats on the NASDAQ stock market, smashing the record for an IPO held by Saudi Aramco, which went public in 2019.

 

…The Mexican government said that Iran’s football team would be allowed to stay in Tijuana and cross the border into America to play in the World Cup, which starts on June11th.

 

…People who sleep less than six hours per night are about four times more likely to catch a cold.

 

…There are around three million shipwrecks lying on the seabed.

 

Wishing you all a very good rest of the week and weekend ahead !

 

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