Newsletter – April 27, 2018
AIR FREIGHT UPDATESStrong start for air freight market, but trade wars and fuel price cast a shadowsource: theloadstar.co.ukAs first-quarter numbers start to emerge, it looks as if air cargo has had a strong start to the year.However, rates appear to have softened slightly recently, casting doubt over second-quarter growth. Read more here (login required).
Penitent United Airlines CEO skips bonus, chairman steps downsource: shippingazette.comUNITED Continental Holdings’ CEO Oscar Munozis is giving up his bonus and company chairman Robert Milton is stepping down in penance over last year’s incident when a passenger was dragged off a plane and later when a dog died in transit. Mr Munoz asked the board not to award him a bonus for 2017, the airline said in a regulatory filing. And Mr Milton, former Air Canada CEO, will be replaced with another independent board chief.Laurence Simmons, a director who joined the oversight council in 2010, also plans to step down.[Excerpted from shippingazette.com]
OCEAN FREIGHT UPDATES
Maersk CEO Calls For End to Shipping Subsidies
AP Moller-Maersk AMKBY 1.56% A/S Chief Executive Soren Skou is calling for governments to withdraw their financial support for container shipping lines, saying subsidies and other backing are causing overcapacity and profit-crushing price reductions across the maritime industry. Read more here (login required).
Spot rates rebound and carriers now need self-discipline before peak seasonsource: theloadstar.co.ukContainer spot rates this week reacted positively to carriers’ 1 May GRIs, gaining more than 30% to North Europe and 22% to the US west coast.Today’s Shanghai Containerized Freight Index records a jump of $190 per teu, or 32.5%, for rates from Asia to North Europe to $774 per teu. Read more here.
Shippers push carriers toward bespoke container services to boost reliabilitysource: theloadstar.co.ukShippers exasperated by a reduction in container lines’ service quality and reliability suggested to delegates at this weeks TOC Container Supply Chain event in Singapore that carriers could benefit from providing more bespoke container services and concentrating the capacity management efforts on secondary trades. Read more here (login required)
GROUND AND RAIL FREIGHT UPDATESChina’s Uber for trucks is said to have raised US$1.9 billionsource: shippingazetteFULL Truck Alliance, China’s biggest app for Uber-like truck services, raised US$1.9 billion in funding to fuel its expansion, Bloomberg reports.Citing people familiar with the matter, Bloomberg said the money was raised at a valuation of $6.5 billion with backers including SoftBank Vision Fund, China Reform Fund, GSR Ventures and Alphabet’s CapitalG. Read more here.The company is trying to disrupt a market that’s estimated to be worth CNY5 trillion (US$792 billion) by bringing the smartphone age to a fractured industry that carries 80 per cent of China’s cargo. [Excerpted from shippingaztete.com]
CANADA BUSINESS – GOVERNMENT UPDATESCanada’s Rail Crunch Is Adding to the Soaring Cost of Lumbersource: ajot.comJust when it seemed lumber prices couldn’t surge any higher, problems for Canada’s railways mean the rally could continue.A shortage of rail capacity cost Vancouver-based lumber producer Canfor Corp. C$20 million ($15.6 million) in the first quarter and led to a pile-up of inventories that were left sitting at the company’s sawmills and pulp mills, Chief Executive Officer Don Kayne said Thursday. Read more here