Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) have prepared the following report using practical efforts to ensure that the commentaries are accurate, generally using source intelligence and publicly available data. 

JULY 2023 - SNAPSHOT

• Drewry's composite World Container Index increased by 2.59% in the past month to $1,575.62 per 40ft container as at 27 July 2023. It is now 85% below the peak of $10,377 reached in September 2021 and 41% lower than the 10-year average of $2,684. This indicates a return to more normal prices, but remains 11% higher than average 2019 (pre-pandemic) rates of $1,420. It is 45% lower than the 10-year average of $2,686, indicating a return to more normal prices, but remains 5% higher than average 2019 (pre-pandemic) rates of $1,420.

• ANL and MSC both on 7 July announced a southbound rate restoration effective 1st August of USD$150/teu ex China, Hong Kong, Japan, Korea, & Taiwan to Australia & NZ.

• Shipping Line Q2 Results:
• OOCL saw its revenue slump 63% in Q2 compared with the same period of 2022 with $1.98bn, compared with $5.28bn the year before.
• CMA CGM recorded a $1.3bn net profit in Q2 despite revenue being down 37% compared to previous year.
• Maersk, Cosco, ONE & Hapag Lloyd results all expected to be released in August.

• OSRA reforms in the US are still instigating major complaints being lodged with the FMC in USA:
• Rahal International, a fruit juice importer, has lodged a complaint with the US Federal Maritime Commission (FMC) against the carrier Hapag-Lloyd, citing "unfair" charging practices. Rahal alleges that Hapag-Lloyd imposed nearly $300,000 in detention/demurrage charges for empty containers between April and June 2022, a practice Rahal considers "inconsistent" and non-compliant with the US Shipping Act. The issue was claimed to have been a result of congestion at NY & NJ empty parks.

• Panama Canal - Drought conditions see Panama Canal restrict daily transits with the number of daily transits restricted to 32 vessels a day as Central America still grapples with the effects of drought and the El Niño weather phenomenon.

• Ever Given / Suez Canal - A 68 page report released in July into the now-infamous case of the Ever Given becoming lodged across the Suez Canal in March 2021 for 6 days has suggested the vessel ought to have sought the assistance of tugs for its northbound transit. It claims the vessel traffic management system, the pilots and the master had not properly evaluated bad weather conditions especially strong winds and reduced visibility.

• Efforts are underway to salvage the K Line-operated vehicle carrier ship Fremantle Highway which caught fire in the North Sea off the coast of the Netherlands on 25 July. All crew were evacuated and one seafarer died in the incident. The cause of the fire is suspected to have been caused by an electric vehicle.

• According to a US State of Logistics report by the Council of Supply Chain Management Professionals, US firms saw their logistics costs surge to $2.3trn in 2022 - 9.1% of overall US GDP. On the transport side, the maritime sector (including inland shipping) saw the strongest increase, costs rising 18.4%, followed by rail, up 17.6%. Trucking costs were up 6.2% in the truckload sector and 6.4% in the LTL arena. Parcel costs rose 4.7%.

• Mergers/Acquisitions:
• HMM - The South Korean state formally put its shares up for sale in late July with interested buyers now having one month to make a bid. HMM's third-largest stakeholder in SM Group, with a total stake of 6.56%, is preparing to bid up to $3.5bn to take a majority stake.

• Global schedule reliability has seen the first drop for the year of 2.5%, down to 64.3%. Albeit still some 24.4% higher than the same period last year.

• The average delay for late vessel arrivals improved to 4.36 days.

• MSC in June demonstrated the best result of the major carriers with a schedule reliability of 70.6%, making it the top-performing carrier among the top 14. Maersk closely followed with a commendable 69.9% schedule reliability. MSC was the sole carrier achieving a schedule reliability exceeding 70%, while six carriers, including Maersk, achieved a reliability range of 60% to 70%. The remaining seven carriers recorded schedule reliabilities between 50% and 60%, with HMM being the only carrier with a reliability score below 50% at 48.3%.

• Orderbook
• CMA CGM - ordered ten 24,000 teu LNG dual-fuel boxships at $240m each with delivery expected in 2026. Including its orderbook, CMA CGM's total fleet is now larger than Maersk's, second only to Mediterranean Shipping Co (MSC) in the global liner rankings tracked by Alphaliner.
• Evergreen - has placed firm orders for twenty-four 16,000 teu methanol dual-fuelled ships at $175m each which will all deliver in 2026 and 2027
• Today's orderbook is standing at around the 8m teu mark. According to data from Clarksons Research, by the end of 2025 the global box fleet will have reached 30m teu, 15% larger than current levels. The 20m teu mark was only broken as recently as 2017.
• Hapag-Lloyd's first dual-fuel LNG ultra large (7500 teu) containership, Berlin Express, has entered service as the company moves forward with its fleet modernization efforts.
• Maersk has taken delivery of the world's first methanol-fuelled container vessel, built in South Korea, with the vessel embarking on its maiden voyage towards Copenhagen.

• Cancellations
• Between weeks 31 through 35, a total of 46 cancelled sailings have been announced out of a total of 619 scheduled sailings, representing 7% cancellation rate. During this period, 48% of the blank sailings will occur in the Transpacific Eastbound, 28% on Asia-North Europe and Med, and 23% on the Transatlantic Westbound trade.
• Over the next five weeks, OCEAN Alliance has announced 18 cancelations, followed by THE Alliance and 2M with 13 and 1 cancellations, respectively. During the same period, 14 blank sailings have been implemented in non-Alliance services.
• There is an expectation that cancelled sailings may pick up in the coming months as liners battle the worsening economic environment.

• Sustainability
• IMO (via MEPC 80) has agreed on a new and stricter approach to carbon neutrality, in which shipping should now be carbon neutral by 2050. This is a tightening from the previous target which was for total emissions from shipping to have been cut in half by 2050. Indicative checkpoints are targeting to reduce the total annual GHG emissions from international shipping by at least 20%, striving for 30% by 2030 (compared to 2008) and by at least 70%, striving for 80% by 2040. Carriers as a result have widely praised the outcome and some will have a little work to do to revise their strategies, for example Cosco who previously suggested they expect to be carbon neutral by 2060.
• The enormous decarbonization price tag of Europe's Emissions Trading System (ETS) carbon pricing measure will top $3.2 billion in 2024 and rise to $9.1 billion in 2026, according to calculations by Hecla Emissions Management.
• The Hong Kong Convention has successfully been ratified and will enter into force in June 2025. The convention aims to ensure that ships when being recycled after reaching the end of their operational lives, do not pose any unnecessary risk to human health and safety or the environment.
• Xeneta in July announced their Q1 2023 Carbon Emissions Index (CEI) findings, with Yang Ming the carrier which held the top spot on the greatest number of the top thirteen trades. It was the cleanest carrier (when measured by CO2 emitted per ton of cargo carried) on three trades, with OOCL and HMM securing the top spot on two trades a piece. Yang Ming was the only major carrier to score below the trade lane average on all the trades where it deployed ships, and their ships were between 0.9 and 3.2 knots slower than competing carriers on the other major trades.

• Terminal and Port Update:
• Patrick terminals
• Brisbane: Working with minimal delays approx. 0-0.5 day 
• Fremantle: Working with minimal delays approx. 0-0.5 day
• Sydney: Working with minimal delays approx. 0-0.5 day
• DP World Terminals
• Brisbane: Working with minimal delays approx. 0.5-1 day - still hampered by equipment and IT outages of late. (declined since last mth)
• Fremantle: Working with minimal delays approx. 0-0.5 day
• Sydney: Working with minimal delays approx. 0-0.5 day
• Melbourne: Working with minimal delays approx. 0-0.5 day (improved since last mth)
• VICT
• Melbourne: Working with minimal delays of 0-0.5 day
• AAT
• Brisbane: Severe congestion has eased, with PCC vessel delays down to 3 to 7 days. August is expected to improve further. 
• Port Kembla: Still affected by severe congestion with vessels still queued for up to 15 days.
• Melbourne: Congestion at present.

• Rail
• Aurizon in July announced their aim to transform the Port of Darwin into a major shipping terminal, using its rail network as a land-bridge to transport containers from Darwin to other capital cities. The company has the capacity to move 350,000 twenty-foot equivalent units across the country each year (incl 150,000 TEUs on the Adelaide to Darwin rail line), with plans to build that business to 450,000 TEUs by 2025 and an aspirational goal of up to 750,000 TEUs by 2030. By establishing its own facilities at the Port of Darwin, Aurizon aims to offer faster delivery times to metropolitan centres and cost-competitive rail-based solutions.

• Enterprise Agreements will also take more of a focus later this year with both DP World (Australia) and Hutchison Ports approaching the end of their current enterprise agreements.

• US Ports - California has announced state funding of more than $1.5bn for 15 port projects to bolster infrastructure and create some 20,000 jobs. Gateways set to benefit are Long Beach and Oakland.

• Canada's west coast ports (including Vancouver) have been affected by industrial action during the course of July with workers on strike between 1st July until 13th July. The labour disruption may now be close to resolution after a "tentative" agreement was reached between the International Longshore and Warehouse Union (ILWU) and BC Maritime Employers Association (BCMEA), following previous rejections of a compromise solution by the ILWU membership. The agreement will now be presented to ILWU members for another vote.

GLOBAL SHIPPERS FORUM (GSF) WORKING GROUPS

As members will recall, the Australian Peak Shippers Association (APSA) has a board presence on the Global Shippers Forum (GSF) performing an important role of representing shippers' (importers and exporters) interests and that of their national associations in Asia, Europe, North and South America, Africa and Australasia.

GSF's policy positions are determined by its Policy Council. At its most recent meeting in February 2023 the Council decided to establish new working groups to guide its work in three specific areas:

1. Container Cleanliness Working Group
2. Surcharge Suppression Working Group
3. Container Shipping Performance Working Group

Please contact Paul Zalai at pzalai@FTAlliance.com.au if you have an interest in participation in any of the above working groups 

INTERNATIONAL SHIPPING LINE UPDATES

• Week 27 (as at 3 July 2023)
• Week 28 (as at 10 July 2023)
• Week 29 (as at 17 July 2023)
• Week 30 (as at 24 July 2023) 
• Week 31 (as at 31 July 2023)

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TRADE DATA UPDATES

• Latest Updates (as at 31 July 2023)                                        FTA / APSA LOGIN REQUIRED

AUSTRALIAN PART X SHIPPING NOTICES

APSA is the designated peak shipper body granted status by the Federal Minister for Infrastructure and Transport under Part X of the Consumer & Competition Act to represent the interests of Australian shippers generally in relation to liner cargo shipping services. Notices have been received and are available to members' reference HERE (FTA / APSA LOGIN REQUIRED)

FTA / APSA IN THE MEDIA

4 JULY 2023 :      DCN - Completing the Circle
31 JULY 2023 :    MHD - Improving Australias supply chain performance
31 JULY 2023 :    AFR - Can Aurizon revive a 40-year-old rail line in central Australia?
 

Tom Jensen - Head of International Freight & Logistics - FTA / APSA

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