Newsletter – April 20, 2021
AIR FREIGHT UPDATES
Hong Kong-North America rates soar as capacity crunch tightens
Average airfreight rates on services from Hong Kong to North America last week breached the $9 per kg mark as stricter quarantine rules and strong demand hit the market.
The latest figures from the Baltic Exchange Air Freight Index (BAI) powered by Tac Index showed that average prices from Hong Kong to North America were last week higher than any point during last year’s PPE demand surge/cargo capacity crunch – although that was more felt on services from Shanghai. Read more here.
More electrical problems found on some Boeing 737 Max, sources say
An electrical problem that led to dozens of Boeing 737 Max jets being suspended from service has widened after engineers found similar grounding flaws elsewhere in the cockpit, industry sources said on Friday.
Airlines pulled dozens of Max jets from service a week ago after Boeing warned of a production-related electrical grounding problem in a backup power control unit situated in the cockpit on some recently built airplanes. Read more here.
OCEAN FREIGHT UPDATES
Evergreen blocked from offloading cargo from Ever Given
Efforts by Evergreen, the operator of Ever Given, to have the vessel’s cargo separated from the ship in any legal action have failed.
The 20,000 teu Ever Given (IMO: 9811000) was arrested by Egyptian authorities, pending settlement of the Suez Canal Authority’s almost $1bn claim for compensation, after the grounding of the vessel shut down the key waterway for six days last month. Read more here.
Federal Maritime Commission further deregulates service contracts
The Federal Maritime Commission (FMC) will begin this year what it calls a “new era of flexibility” for service contract filing for container lines and their U.S. importer and exporter customers.
An amended rule that takes effect on June 2 will allow ocean carriers to file original service contracts with the agency up to 30 days after they go into effect. Current regulations require that they be filed with the FMC before an ocean carrier is allowed to receive and move cargo under the terms of that contract. Read more here.
Container prices surge in China and India
The container shortages that have been adding to logistics logjams in Asia and beyond are showing few signs of being resolved, according to the latest data from Container xChange, an online platform for the leasing and trading of shipping containers.
In China, average prices for used twenty-foot containers increased 94% between November 2020 and March 2021. The surge from an average price of $1,299 per box in November last year to $2,521 in March “indicates that container scarcity is continuing to worsen” in those months, Container xChange said. Read more here.
Box shortages and port congestion now an ‘industry-wide challenge’ across Asia
Equipment shortages in Asia will get worse over the next two weeks, say carriers, impacting both deepsea and intra-Asia trades.
Maersk has told customers the strong cargo demand out of Asia Pacific would likely continue throughout the second-quarter, but…
“Schedule reliability is impacted by two main factors: recent delays from Europe via Suez Canal; and lower port productivity, especially on transpacific and European trade routes,” the company added. Read more here (login required).
Vessel Cascade/Schedule Recovery Measures on the One Marvel – DP Voyage # 265223
Please be herewith informed, that due to vessel cascade and as part of the schedule recovery measure, EC5 Vessel One Marvel 054 W (DP Voyage # 265223) will be omitting the following ports.
We will be able to offer additional capacity to and via these destinations on the following EC5 vessels One Motivator (DP Voyage # 265227) & Dalian Express (DP Voyage # 265229).
Thank you for your understanding and our apologies for any inconvenience caused.
GROUND AND RAIL FREIGHT UPDATES
News Alert: CN makes nearly $34 billion bid for Kansas City Southern
Canadian railway CN (NYSE: CNI) has offered to acquire Kansas City Southern (NYSE: KSU) in a cash-and-stock transaction worth $33.7 billion, or $325 per share.
CN rival Canadian Pacific (NYSE: CP) last month announced plans to acquire Kansas City Southern (KCS) for $29 billion. Read more here.
INTERNATIONAL BUSINESS – GOVERNMENT UPDATES
Cargo theft remains high in 2020 despite lockdowns
The Europe, Middle East and Africa (EMEA) region saw cargo crime continue at a high rate last year despite Covid lockdowns limiting the movement of people.
Figures from the Transported Asset Protection Association’s (TAPA) Cargo Theft Annual Report shows that 6,463 cargo thefts were reported across 56 countries last year.
The organisation said that the number of actual incidents is likely to be much higher as the number reported on its database was likely restricted by Covid. Read more here.
Logistics space in high demand, rents moving up
Logistics real estate provider Prologis Inc. (NYSE: PLD) pointed to a continuation in positive momentum from the fourth quarter as the catalyst for better-than-expected first-quarter results.
The San Francisco-based company reported core funds from operations of 97 cents per share Monday, 3 cents ahead of consensus and 14 cents higher than the year-ago quarter. Read more here.
Retailers clamor for limited industrial space near major US seaports in an attempt to mitigate future supply chain disruptions
Industrial markets at major U.S. port cities have come under additional strain from big increases in U.S. imports, fueling demand for warehouse space in markets with already scant availability, according to a new report from CBRE.
This increase in imports, which amounts to double-digit percentage gains from year-ago levels in many markets, has resulted from retailers seeking to bolster their inventories in the wake of pandemic-related demand and global supply chain shocks like the recent blockage of the Suez Canal. Read more here.