Tuesday, October 26, 2021
The company has already launched its first self-operated charter flight, between Shenzhen and Bangkok, to serve into South-east Asia's cross-border e-commerce demand.Soon after, a second charter flight was added, between Nanjing and Los Angeles, operated by China Eastern, carrying apparel and fast-moving consumer goods from its Shanghai and Shenzhen warehouses."Covid has heavily impacted the global supply chain industry," CEO Yui Yu told Bloomberg. "Many companies have encountered different challenges and difficulties and we've seen a shortage of resources in shipping and air freight."JD was quick to control its own container shipping capacity, launching EShipping Gateways, a joint-venture with OOCL Logistics, which offers several sailings from Asia to North Europe.Although Mr Yu believes the supply chain disruptions are short term, he says JD is preparing to set up its "own air freight company, which was recently approved by authorities".@FAXTEXT "In the future, we might also own air freight companies in other countries. By 2030, I would say there won't be fewer than 100 planes in JD's fleet," he said.Mr Yu said the company would also "invest massively" in warehouses in North America and Europe over the next two years, building hi-tech automated logistics centres, explaining: "We can provide more support to Chinese sellers who want to do business abroad."Plus, China is the world's largest consumer and has a great demand for overseas products."JD rival Alibaba's logistics-arm Cainiao is also expanding rapidly to overseas markets and is, perhaps, further ahead in terms of air freight, having launched partnerships and charter agreements with several cargo airlines. Earlier this year, for example, it teamed up with Hong Kong Air Cargo for South-east Asian e-commerce shipments and this month bought a 20 per cent stake in Air China Cargo.
Cathay sent notices to customers informing them that a general rate increase of HK$18/ kg (US$2.31) would be added to the base rate for all transpacific routes from midnight on November 15 for all flights departing Hong Kong, "until the end of the contractual period".The carrier also issued a notice for Hong Kong to Indian routes, where it added a GRI of HK$7/kg for the same period. Cathay told customers the changes were made "to reflect the latest air cargo market situation".The market has been expecting some reneging on contracts. One air freight buyer told The Loadstar he had lost out on a booking when another company offered US$500,000 more for the capacity, commenting: "I can't blame the airline, to be honest. An extra half million is quite a lot."
Hong Kong Air Cargo Terminals, (Hactl) staff will be reduced 25 per cent until the end of October, according to an update by Everstream Analytics. A quarter of the Hactl terminal's staff being sent home for quarantine will further stress the ground handling situation at China's airports, DB Schenker said in a customer advisory."In addition, major air cargo flights are either arriving or departing empty due to stringent Covid regulations which are impacting the turnaround times of the flights," it said."Both import and export cargo are likely to be significantly delayed and congestion issues are likely to occur," the update said.Hactl said that a fully vaccinated employee "tested positive" for Covid. The terminal added it is working to identify close contacts and that only employees who have tested negative will be allowed to return to work.
RCL bought six ships, joining the rush for tonnage in a soaring market. Currently RCL owns 41 ships with capacities ranging from 628 - 6,350 TEU.The neo-panamax ships costing US$115 million each, are understood to have been ordered by Imabari's ship-owning affiliate, Shoei Kisen Kaisha.Vessel databases indicate that the ships will be delivered in September 2022 and January 2023, and will be named Santi Bhum and Thitti Bhum.They are sister ships to newbuildings Shoei Kisen Kaisha ordered for long-term charter to carriers Yang Ming and Evergreen.RCL announced the acquisitions in August, but did not disclose additional information, other than the seller was a Panama-incorporated entity, Giant Line, and when the ships were to be delivered.This month, RCL, primarily an intra-Asia carrier, informed the Stock Exchange of Thailand that it had incorporated individual vessel-owning special purpose vehicles in the country to own the ships.For the first half, RCL's net profit rose 27-fold to $190.5 million, citing surging demand for durable goods and medical supplies due to the ongoing Covid scare.
Kerry and Hengan worked together last year supplying Covid-related medical, healthcare and hygiene products including masks, gloves and toiletries.By combining Kerry's strengths in domestic logistics and distribution and Jinjiang-based Hengan's sourcing of hygiene products, the joint venture company will meet the new demands of medical institutions and public facilities, said the announcement.While it is looking to expand its business into other Asian countries and territories going forward, the joint venture will also have full support of Hengan's "Banitore" brand of products in the Hong Kong market.Said Kerry managing director William Ma: "This joint venture will not only enable the two companies to explore more growth opportunities in the medical, healthcare and hygiene products market, but also create a unique competitive edge for us to support our customers in meeting new challenges through the pandemic."Said Hengan executive director Tommy Hui: "This partnership marks the coming together of the best in two industries. Our collaboration has been fruitful and we have high hopes for this new venture."
New research from Swedish technology company I-Tech highlights the increasing problems for ship operators caused by biofouling occurring during growing idling periods. The percentage of ships subject to "fouling idling" has increased since 2009 from a starting point of 25.4 per cent to a peak of 35.0 per cent in May 2020. researchers said.In February 2020, 61.8 per cent of idling bulker vessels were located in warm waters with high exposure to marine growth.The absolute number of vessels idling in the global fleet has doubled between 2009 to 2020.The research also found that vessels are increasingly idling in biofouling hotspot∩, with water temperatures above 25 degrees C."External factors such as the economic collapse of 2008, the offshore crisis in 2015, and most recently the COVID pandemic and consequent port congestion will always have some disruptive effect on operations and make predictions difficult," said I-Tech CEO Philip Chaabane."Ship operators must, however, take action to minimize their impact. Most importantly, they must ensure that, after any idling, the vessel is in good condition to perform optimally. Familiarisation with the individual vessel's risks of biofouling based on its operating footprint is a good starting point," said Mr Chaabane."This future-proofing approach to antifouling coating selection, without any certainty of future trade, is exerting great pressure on the coating suppliers, fostering innovation and new approaches towards fouling prevention technology using the active substance Selektope. This is supported by increasing demand from ship owners and operators for antifouling coatings that contain the anti-barnacle active agent." said Mr Chaabane.
Loaded imports were the main factor of this volume uptrend, completing 152,197 TEU and an increase of 26 per cent compared to last September, the month when the port began seeing a considerable rebound in its volumes from the Covid period. In the meantime, exports also grew by almost seven per cent, surpassing 80,690 TEU."Last September is when volumes began coming back and since then we have posted growth each month" highlighted the CEO and executive director of the Virginia Port Authority, Stephen Edwards, who went on to note that "the growth is not artificial and the movement of loaded and empty containers is up for both exports and imports."Furthermore, Mr Edwards attributed this container traffic growth to smooth port operations. "There is no congestion here and ocean carriers and cargo owners are taking notice of our track record and what we are doing to ensure consistency in our operation," he said.Additionally, the port in the US east coast moved 53,405 rail containers, 110,452 boxes via trucks, and 7,141 boxes through barges, representing a year on year increase of 21.6 per cent, 25.2 per cent and 9.4 per cent, respectively.From January until September, the seventh-busiest port in the country has handled 2.58 million TEU, which represents a 30 per cent growth over the corresponding period of 2020.Mr Edwards is not expecting a slowdown in volumes before the year's end. "We may see a dip as the retail season comes to its end, but this is normal and any fall-off in volumes will be small. Looking into 2022, we see nothing that leads us to believe that there is going to be a drop in volumes," he commented.
The Zim Kingston lost part of its payload just after midnight about 40 miles west of Cape Flattery on the US-Canadian border.Then a cargo fire broke out while at anchor in the Straits of Juan de Fuca. The US Coast Guard update said as many as 35 containers had been observed floating and are being monitored as they drifted to the north."The weather conditions at the time were 16-to-20-foot waves. That's enough to impact a boat pretty badly," said US Coast Guard Petty Officer 3rd Class Diolanda Caballero.A helicopter from the US Coast Guard station in Port Angeles was able to locate eight of the stackable metal boxes afloat in the Pacific. Before sunset, 35 containers had been spotted, many drifting north toward Vancouver Island.Environment Canada issued a gale warning for the west coast of Vancouver Island, with winds up to 40 miles per hour out of the southeast.Two of the containers are believed to contain hazardous materials, according to PO Caballero, who said the hazardous materials were combustible."These containers may be partially submerged and not visible," said the US Coast Guard, urging extreme caution on any ships in the area.The ship was then anchored off Victoria, British Columbia. The Zim Kingston is operated by Zim of Israel.
Gross profit per TEU through the nine months increased 80 per cent to $736. The EBIT per TEU during the third quarter was $443 - more than double that of 2020.Kuehne + Nagel expects no change to the market constraints disrupting the air and ocean transport sectors, which the forwarder rode to a highly profitable third quarter and nine-month financial result."We have a chaotic market environment and that is going to continue," said Kuehne + Nagel CEO Detlef Trefzger. "There's no end in sight at the moment. It might last until Lunar New Year, but we would expect this can continue even longer than six or 12 months. There's no sign of relief."It is high season in the US with Thanksgiving and Christmas," he added. "There are 700 vessels waiting outside ports around the world, which is around 13 per cent of global capacity, and that is also impacting European ports."For the first nine months, K+N generated revenue of $23.7 billion, a 47 per cent increase year on year. EBIT was up 131 per cent to just shy of $2 billion, and net profit for the first nine months increased 133 per cent to $1.5 billion.Air cargo volume for the first three quarters was up 50 per cent on the same period last year at 1.6 million tonnes, although 20 per cent of the volume was generated by Apex, the China-based forwarder acquired late last year. Strong air cargo rates on the transpacific this year drove the nine-month gross profit up 64 per cent to $1.7 billion, and generated EBIT of $700 million, up 84 per cent.The nine-month volume of 3.4 million TEU was a year-on-year increase of just one per cent, and volume declined two per cent through the third quarter.
"Chartering vessels is just one example of investments we've made to move products as quickly as possible," said Walmart vice president Joe Metzger.The retail giant recently drafted into service the dry bulk cargo ship, The Flying Buttress, which once glided across the oceans carrying vital commodities like grain to all corners of the world. Now it bears a different treasure: Paw Patrol Movie Towers, Batmobile Transformers and Baby Alive Lulu Achoo dolls."The aim is to bypass log-jammed ports and secure scarce ship space at a time when Covid, as well as US-China trade ructions, equipment shortages and extreme weather, have exposed the fragility of the globe-spanning supply lines we use for everything from food and fashion to drinks and diapers," said Mr Metzger.More than 60 container ships carrying clothing, furniture and electronics worth billions of dollars are stuck outside Los Angeles and Long Beach terminals, waiting to unload, according to the Marine Exchange of Southern California.Pre-pandemic, it was unusual for more than one ship to be in the waiting lane at the No 1 US port complex, which handles more than half of all American imports.Other big retail players, such as Target, Home Depot, Costco and Dollar Tree, have said they are chartering ships to deal with the pandemic-driven slowdown of sea networks that handle 90 per cent of the world's trade.Or, as Steve Ferreira of shipping consultancy Ocean Audit describes the escalating concern: "Containergeddon."US retailers' traditional lifeline from Asia is freezing up due to a resurgence of Covid in countries like Vietnam and Indonesia plus a power-supply crunch in China. The supply snarls coincide with booming demand as consumers spend more on goods than going out, and the festive shopping frenzy nears.Burt Flickinger, managing director at retail consultancy Strategic Resource Group, said at least 20-25 per cent of the goods stuck on ships were unlikely to make it onto shelves in time for the November 26 Black Friday kickoff for the holiday shopping season, a period when retailers make more than a third of their profits.The biggest chains are taking matters into their own hands.The Flying Buttress, for example, entered Los Angeles waters on August 21. It got stuck in a queue outside the port before it bypassed clogged terminals and unloaded its goods at a separately operated bulk cargo dock nearby on August 31, according to Refinitiv data and shipping records.During that voyage, Walmart circumvented the shortage of FEUs by switching to bigger 53-footers used to move goods by truck and train within the United States.Other companies are also playing the shipping game including Home Depot which said it was "creatively working to obtain additional capacity".The home improvement retailer dodged the Los Angeles gridlock by sending its Great Profit charter ship nearly 125 miles south to the Port of San Diego.On September 15, the ship's onboard cranes hoisted 7-foot Halloween "Spellcasting witches", Christmas lights and other holiday decor onto docks there, said Ocean Audit CEO Ferreira, who helps shipping customers claw back overpayments."This is the home stretch. They're doing whatever it takes" to win in an overheated market, he said of retailers.
Still-open ports like Singapore have been faced with congestion, with the number of containers stuck in transit awaiting shipment.Yard capacity that opened at Tuas port last month is in addition to the 65,000 TEU capacity made available at the Keppel terminal late last year.This is as more than 2,500 locals were added to the maritime workforce, boosting the number of port workers 20 per cent.Senior Minister of State for Transport Chee Hong Tat said that Singapore is trying its best to help cargo ships make up for lost time, and more yard space can be made available when necessary."We have become the go-to port for shipping lines to catch up on lost time and connections, and also to untangle some of their operational challenges," he said."As more ships come to Singapore to make use of our one-stop service and catch-up service, it does also add on to the queues and the waiting times," Mr Chee said.Mr Chee said it is difficult to assess what the overall impact on other goods the supply crisis, which has so far most adversely impacted higher-value products, will have.But Singapore has widened its supply sources, including for food. "The more diversified, the more wide-ranging our supply sources are, the greater the confidence that will be in terms of being able to withstand any cyclical source disruption," he said.
This new service augments PIL's existing CSG service linking China and South East Asia to the Gulf area. The service calls at Ningbo, Nansha, Shekou, Jebel Ali, Dammam and then returns to Ningbo.This new service, known as Gulf China Service (GCS), will be offered by vessels with an average capacity of 3,000 TEU, jointly deployed by PIL, Regional Container Lines (RCL) and CULines (CUL).This new direct service is part of PIL's continuous efforts to respond to the needs of our customers for more direct and efficient services. Customers who book on this new GCS service will enjoy fast transit times from Ningbo, Nansha and Shekou, to Jebel Ali and Dammam.
"With the opportunistic acquisition of these much-needed vessels, we have drawn on our strong cash position and our agile approach to maintain and expand our operating fleet to meet growing customer demand," said Zim president and CEO Eli Glickman."Going forward, we will continue to complement our primary strategy of chartering-in the vast majority of our vessels, by selectively acquiring second-hand tonnage when the appropriate opportunities arise," he said.
Record import volumes has led to severe congestion at the ports of LA and Long Beach, with a record 79 container vessels waiting to berth at the two ports."Despite global supply chain challenges, the Port of Los Angeles and its partners continue to deliver record amounts of cargo," said Port of Los Angeles executive director Gene Seroka.In September 2021 loaded imports reached 468,059 TEU, about the same amount compared to the previous year. Loaded exports fell 42 per cent to 75,714 TEU year on year. This was the lowest number of exports since 2002.Empty containers rose to 360,092 TEU, up 28 per cent compared to last year due to continued demand in Asia. In total, September's 903,865 TEU were 2.3 per cent above last September's previous record of 883,625 TEU.