Sea Archives | Page 48 of 70

Pure car and truck carrier orders reach new high

Jul 4, 2023 | Automotive, Sea

As Chinese car exports continue to rise and British car manufacturing continues its resurgence, orders for car and truck RoRo (PCTC) vessels are the highest since 2008.

During the pandemic many PCTCs were scrapped and few built, as working from home depressed vehicle demand, but rising Chinese car exports, up 58% year on year and increased demand from Japanese and European manufacturers, particularly to Europe and the Americas, has seen global tonne-mile trade growing 12% in the last year.

The PCTC shortage has caused daily charter rates to soar with shipowners and two carmakers in China, rushing to build vessels, while many manufacturers are adopting Metro’s container shipping solution, which offers efficiencies and cost savings over RoRo alternatives.

BYD, which make electric and hybrid cars, is ordering six PCTC ships with the capacity to carry 7,700 cars, while state-owned SAIC Motor Corp is tendering for seven new carriers that can each hold 8,900 vehicles.

BYD and SAIC aren’t the first car brands to run their own shipping fleets. Toyota owns shipping company Toyofuji Shipping Co., while Hyundai has logistics group Hyundai Glovis Co., and Volkswagen charters its own vessels.

Last year, 90 PCTCs, totalling 560,000 car-equivalent units (ceu) were ordered, nearly tripling the 38 commissioned in 2021, while so far this year, 33 have been commissioned.

With only 11 vessels expected for delivery in 2023 and China planning to export 2.3m units to Europe this year, the RoRo capacity currently expected will only serve half of that number.

But with container shipping rates slumping, there is a massive opportunity for shippers of finished vehicles to move units on dependable and regular services – without volume constraints – at relatively low cost.

Metro has specialised in automotive, construction and agricultural vehicle supply chains and movement, using road transporters, RoRo, sea containers, air freight, charters and specialised equipment for over four decades.

Working with many of the most respected and established global brands, our specialist teams coordinate the end to end movement of vehicles and machinery around the world, regardless of origin or destination.

Long-standing partnerships and volume agreements with the leading container shipping lines means we can offer the widest choice of services, routes and solutions for finished car and KDV movements.

To learn more, or to discuss our automotive capability, EMAIL Ian Tubbs.

US West Coast ports shut by ILWU dockworkers

Jun 7, 2023 | Sea, United States

After almost 13 months of negotiation and agreement on key issues, it would appear that some ILWU members’ patience has run out, as industrial actions shut down or severely impacted operations at the ports of Los Angeles, Oakland, Tacoma, Seattle and Hueneme last week.

Reports in US trade press suggest that negotiations between the ILWU union and employers, represented by the Pacific Maritime Association (PMA), deteriorated over wages, with workers not showing up at some terminals beginning last Thursday night, halting operations and impacting cargo flows at other facilities.

The PMA has accused the ILWU of disrupting operations to leverage negotiations, which commenced last May, while the LWU described the absences as workers expressing their frustration over the lack of progress in the talks with the PMA.

Ray Cordero, Executive Director of the port of Long Beach, urged the ILWU and the PMA “to continue negotiating in good faith toward a fair agreement”, while ILWU’s International President Willie Adams said talks have "not broken down" and that the union "aren't going to settle for an economic package that doesn't recognise the heroic efforts and personal sacrifices of the ILWU workforce that lifted the shipping industry to record profits."

While the workers’ actions are not formal industrial action and most ports reopened on Monday, there are fears that stoppages could restart and even extend to other West Coast ports, if rank-and-file ILWU members become disillusioned with the labour contract negotiations.

Shippers, that had shifted cargo to other gateways to avoid labour-linked disruption, had begun to switch volumes back, with LA and Oakland reported rising volumes in the past months, and while last week’s disruptions may have been expected to slow down further shifts to the West Coast, developments on the Panama Canal may make shippers cautious about using the East Coast.

Water levels in the watercourses that feed into the Panama Canal’s locks are far below normal, due to drought, resulting in draught limits and rising surcharges for container ships traversing the canal.

The canal authority has steadily reduced draft levels since February, which means the largest ships must take fewer containers overall or cherry-pick lower-weight containers.

If water levels keep falling as forecast (to all-time lows) the market reaction will be higher shipping rates and a scramble to find alternative routes from Asia.

If you are shipping to, or importing through, the West Coast and have any concerns we can review your situation and, if necessary, prepare contingency plans to protect your supply chains.

There are alternative access ports in Canada, the Gulf and on the East Coast and with a collaborative approach, we will provide the best options to ensure that your supply chain expectations are met.

To learn how we can support your trade with the United States, or to learn more about our ocean solutions, please EMAIL our Chief Commercial Officer, Andy Smith.

Low speed containerships are propping up rates

Jun 7, 2023 | Environment, Sea, Supply Chain

Last year the shipping analyst Drewry’s forecast that the container shipping lines earnings would be down 64% for 2023, but added that there were strategic choices available to the carriers, to protect their revenues, with slow steaming a proven method of removing capacity, to protect rates and comply with environmental regulations.

In the first quarter of 2023, the global container fleet accordingly moved at all-time slow speeds, with analysts suggesting that vessels could go slower still which, despite massive falls, will help carriers keep rates higher than pre-pandemic levels.

During the covid pandemic the container shipping lines increased average sailing speed by 4% to meet strong demand and create spare time, because of widespread port congestion.

In the first quarter of 2023 the average sailing speed has come back down 4% year-on-year and could drop a further by 10% before 2025, to absorb capacity that would otherwise be surplus.

Across the global container fleet average speeds went down by about one knot, in the last two years, which does not sound like much, but Alphaliner data shows that is about 6% slower overall, which means you need proportionately more tonnage to carry the same cargo volume.

For the past couple of decades carriers have adopted slow-steaming whenever there is structural overcapacity or high fuel prices - or both - as is the current situation.

At the same time the shipping lines have ordered record amounts of new vessels and additional capacity is now being delivered into a market with minimal demand growth, new environmental regulations, carbon taxes and rising fuel prices.

Maersk and MSC announced last month they would be adding nine new vessels into the Asia-Europe trade, but that these services would be moving up to three days slower than before, thus absorbing all the new capacity.

As part of plans to conduct field tests of an onboard carbon capture system (OCCS) for container ships in 2024, South Korea’s HMM will replace the propellers on six of its containerships with more efficient ones specially designed for slow steaming, with HMM also expecting to increase energy efficiency by 8-9%.

The transition to new fuels such as LNG, methanol and ammonia also favours slow speeds, since these fuels will be much more expensive than current ones, which makes sense to deploy extra ships and save fuel.

Despite a 70-80% fall in freight rates over the last two years, and a worsening of the supply/demand balance, it is quite clear that the container shipping lines have been successful in matching capacity to cargo demand, in keeping rates higher than pre-pandemic levels.

Slow-steaming and evolutions in shipping alliances change competitive dynamics on all the major trade-lanes, which is why we stay close to our carrier partners and contacts, to keep track of changes and identify opportunities for our customers.

If you have any questions or concerns about the developments outlined in this eBulletin, please EMAIL our Chief Commercial Officer, Andy Smith, for the latest insights and intelligence.

Long-haul RoRo schedule disruption continues

May 24, 2023 | Automotive, Sea

Specialised RoRo car and truck carriers are facing multiple challenges, which are causing congestion and delays at ports in Europe, China, South Africa, the US and Australia.

Driver shortages in the UK and Europe mean that some importers struggle to collect their cargoes from ports as quickly as usual, with terminals experiencing longer cargo dwell times, which may be due to a variety of underlying issues such as warehouse capacity, which create bottlenecks.

The movement of cars at ports around Europe, particularly Southampton, Koper and Zeebrugge (now called Antwerp-Bruges), are suffering with space issues, caused by these driver shortages and exports are delayed by a lack of ro-ro vessel space.

Antwerp-Bruges insists that car terminals in the whole of Europe are experiencing congestion, but it is not closed for new cars, with additional sites being made available to the automotive sector, and more sites added in accelerated development.

While the Port of Zeebrugge is still facing significant terminal congestion and delays, vessel operators continue to seek secure additional berth slots, labour to load and discharge cargo, and storage space.

One of the major contributing factors to the congestion has been what the port of Antwerp-Bruges called the “bullwhip effect”, where the pandemic delayed production due to a shortage of semiconductors, which increased substantially following the post-COVID recovery.

But the major cause of congestion has been the trucking sector, with a lack of drivers a major concern as well as the decline in the number of companies operating car-carrying vehicles.

Southampton in the UK and the Slovenian port of Koper, in the Adriatic, are also experiencing congestion, particularly with exports. Southampton’s vessel schedules were disrupted during the summer cruise season last year, partially due to labour shortages and operators are working closely with the port to try and avoid a repeat.

Koper exports cars, farm equipment and construction vehicles for Central and Eastern Europe, including Austria and Hungry.

At Southampton, delays of up to 18 weeks have been experienced for some export vehicles, while in Australia imports can be delayed by checks at ports for unwanted/invasive organisms, which can take up to three weeks.

Delays to schedules mean some long-haul carriers may skip ports to make up time, which further exacerbates delays.

Metro is increasingly shipping cars in containers to avoid the wait for delayed RoRo services, which have seen freight rates spiral due to congestion and shortage of space.

Standard 40’ containers can accommodate two large cars, properly secured and, with a rack, four small vehicles can be loaded which, with container rates comparatively low, offers massive efficiency gains and costs that are in line with historic RoRo levels.

Port to port freight costs are significantly lower, but inland rates are higher for container movements, which is what brings the costs up.

The increase in the export of cars from China (reported in this week’s eBulletin) has added to the congestion challenges, with increased demand for vessels to handle the increased volumes.

Metro has specialised in the automotive, construction and agricultural vehicle sectors for over four decades, working with many of the most respected and established global brands, to coordinate the end to end movement of vehicles and machinery around the world, by RoRo and container services.

Long-standing partnerships and volume agreements with the leading RoRo, PCTC and container shipping lines means we can offer the widest choice of services, routes and solutions for automotive, truck and knocked-down-vehicle movements.

To learn more, or to discuss our automotive capability, EMAIL Ian Tubbs.