Newsletter- August 31, 2022
OCEAN FREIGHT UPDATES
Carriers unveil blanking programmes to prop up rates as peak season sags
Some 8.8% of capacity is due to be pulled from the Asia to Europe market by ocean carriers over the next 12 weeks.
CMA CGM has announced it will blank five sailings in the period surrounding China’s Golden Week, removing close to 100,000 teu from the Asia to Europe trades. Read more here.
N Europe port congestion eases as demand falls and strikes and holidays end
A combination of improved labour availability, due to the end of the school holidays and a reduction in Asian imports, has eased congestion at North Europe’s container hubs.
Moreover, a wage settlement last week at German ports is also expected to relieve the high yard density at Hamburg’s box terminals in the coming weeks. Read more here.
Maersk continues push into logistics with latest takeover
Shipping giant AP Moller Maersk has completed the acquisition of e-commerce supply chain firm LF Logistics in a deal with an enterprise value of $3.6bn.
Hong Kong-headquartered LF Logistics employs 10,000 people, operates an extensive Pan-Asian network across 223 warehouses and specialises in B2B and B2C distribution solutions within retail, wholesale, and e-commerce. Read more here.
Long-term box rates begin to follow the trend set by the spot market
Long-term box freight rates continue to climb but are finally showing signs of coming under pressure.
Data from online platform Xeneta shows that long-term rates increased 4.1% in August, standing 121.2% higher than this time last year. Read more here.
Only 8 ships waiting off Southern California — but 41 off Savannah
And then there were eight. That’s the number of container ships waiting for berths at the ports of Los Angeles and Long Beach on Monday, the lowest tally since the early stages of consumers’ COVID-era buying spree. The epic container ship traffic jam that was once a highly visible symbol of the supply chain crisis has now almost vanished.
It’s a different story for North America as a whole, however. The number of container vessels waiting offshore of all ports has remained roughly steady at an extremely elevated level throughout this month, at around 130 ships. Read more here.
GROUND AND RAIL FREIGHT UPDATES
Shippers’ revenge is coming for truckload carriers
The freight market is a pendulum – and when it swings, it may be the buyers or sellers of capacity that now have the power in rate negotiations. Ever since the summer of 2020, trucking companies have largely held all of the power in rate negotiations, based on their ability to squeeze their shipper customers for rate premiums. Read more here.
Impasse in labor talks continues as possible freight rail strike looms
The remaining unions that are still negotiating with the freight railroads on a new labor contract are grappling over wages and benefits, while a union coalition’s survey points to broad potential support for a strike.
Meetings last week between labor and the freight railroads didn’t lead to any tentative agreement language that the operating crafts could accept, according to a joint statement from the heads of two of the larger rail unions. Read more here.
INTERNATIONAL BUSINESS – GOVERNMENT UPDATES
Freight rate bubble bursts, pushing smaller opportunists out of the transpacific
The Covid freight rate bubble has burst, and the absence of “easy money” is forcing smaller carriers and forwarders to quit the transpacific trade.
According to Richie Lin, logistics consultant director at Team Global Logistics, the inflated freight rates of 2020 and 2021 attracted new players to provide transpacific services in search of quick returns. Read more here. https://theloadstar.com/freight-rate-bubble-bursts-pushing-smaller-opportunists-out-of-the-transpacific/ Read more here (login required).