- Shipping Competition
- The Alliance : Ocean Network Express (ONE) has hinted at an upcoming April announcement that could clarify its position and future direction within the industry since the decision of Hapag-Lloyd to exit The Alliance and link with Maersk via the Gemini Cooperation. Managing Director Louis Tang indicated that while options are still being explored, ONE aims to reassure customers of improved service quality starting next February. With the container shipping landscape rapidly evolving, particularly with the Gemini Cooperation and the strengthened Ocean Alliance setting new precedents, the focus is now on how ONE and other members of The Alliance (HMM & Yang Ming) will adapt, amidst discussions of potential collaborations and niche service offerings to maintain competitiveness.
- Container Shipping Alliance Landscape
- The world's leading shipping firms are divided into three principal alliances:
- 2M: Comprising MSC and Maersk (to be dissolved starting January 2025).
- Ocean Alliance: Includes Cosco, CMA CGM, Evergreen, and OOCL.
- THE Alliance: Consists of Hapag-Lloyd, ONE, HMM, and Yang Ming. (Hapag-Lloyd leaving end January 2025).
- Looking ahead to next year:
- MSC: Will be operating independently.
- Gemini Cooperation: A new collaboration between Maersk and Hapag-Lloyd, beginning February 2025.
- Ocean Alliance: Consists of Cosco, CMA CGM, Evergreen, and OOCL, with a recent extension through 2032.
- THE Alliance: Continues to include ONE, HMM, and Yang Ming.
- Mergers/Acquisitions
- HMM - After the collapsed deal with Harim Group in February, the South Korean government Minister of Oceans and Fisheries says that there are "no plans for the resale of HMM" and that the state owners will instead focus on making plans "with the principle of enabling it to be operated soundly".
- DB Schenker - the sale is back in the spotlight with Kuehne+Nagel & DHL both announcing in February and March respectively that they would not be making a bid, Maersk has suggesting they are indeed looking into it the acquisition as a possible fit for their business. Maersk have since hired advisors to help look into a possible bid. DSV are the other main contender touted as a possible fit. If the German logistics group is bought by either DSV or Maersk, it would be the largest acquisition in Danish history. DB Schenker while sharing their 2023 FY results, mentioned that more than 20 parties had registered an interest in purchasing the forwarder.
- Schedule Reliability
- Global schedule reliability has declined to 51.6%. It decreased by 5.1% month-on-month in January 2024 with the downward trend continuing at the same rate as the month prior. On a year-on-year basis, schedule reliability was 0.8% lower than the previous year.
- Due to the continuation of sailings around the Cape of Good Hope, the average delay for LATE vessel arrivals deteriorated once again, increasing by 0.59 days month-on-month up to 6.01 days.
- CMA CGM was the most reliable top-13 carrier in January 2024 with schedule reliability of 54.7%, with only another four carriers that were above the 50% mark.
- Cancellations
- Between week 13 (25 Mar-31 Mar) and week 17 (22 Apr-28 Apr), 41 cancelled sailings have been announced out of a total of 650 scheduled sailings, representing a 6% cancellation rate. During this period, 51% of the blank sailings will occur on the Transpacific Eastbound, 27% on the Asia-North Europe and Med, and 22% on Transatlantic Westbound trade.
- In the Australian market, while January and February saw cancellation rates of 19% and 12.66% respectively on China to Australia trade, it has since reduced down to 6.25% based on March schedule data, with only 6 of 96 scheduled sailings cancelled.
- OCEAN Alliance have announced 12.5 cancellations, followed by THE Alliance and 2M with 7.5 and 2 cancellations, respectively. During the same period, 19 blank sailings have been implemented by non-Alliance services.
- Orderbook / Scrapping
- Bimco suggests that by 2025, the average size of container ships is expected to exceed 5,000 TEU, highlighting the maritime industry's shift towards larger, more efficient vessels. Since 2006, the average vessel size has doubled to 4,580 TEU, driven by the prevalence of ships over 12,000 TEU, which now make up 51% of fleet capacity expansion. These larger ships have transformed container shipping economics and environmental impact, offering 25% cost and emissions savings per TEU compared to smaller ships. This trend towards bigger vessels reflects the industry's push for greater efficiency and sustainability.
- Ship deliveries will hit a new record high in 2024, beating the record set in 2023. The fleet is expected to grow 14.9% between end 2023 and end 2025.
- MSC still lead the way in the ordering stakes, with 111 vessels still on order which equates to 23.1% of their existing fleet :
- Supply / Demand
- The ship supply/demand balance which is expected to see overcapacity impact the market until 2027, is anticipated to improve in 2024 due to Houthi attacks in the Red Sea. This situation is expected to continue to affect the market in the first half of 2024, with ship routings likely reverting to the usual Suez Canal path thereafter (subject to geopolitical tensions easing). Since this increased demand for ships is not tied to cargo volume growth, it's expected that ship demand will decline again in 2025.
- Innovation
- Pan Ocean is launching South Korea's first autonomous containership, the POS Singapore, for its service linking South Korea with Thailand and Vietnam. This move, part of a project selected by the Ministry of Oceans and Fisheries in 2022, showcases a significant advancement in maritime transport with the use of artificial intelligence and big data. The POS Singapore, set to start operations on April 6, represents a pioneering effort in sustainable and innovative shipping, aiming to enhance efficiency and reduce human error on major trade routes. This initiative marks a significant milestone in the development and deployment of autonomous shipping technologies.
- Legal
- Volkswagen Group faces a lawsuit, with allegations focusing on a lithium-ion battery from a Porsche EV as the cause In the devastating fire on board the Felicity Ace in February 2022. The vessel which was transporting 3965 luxury vehicles including Porsche EVs from Germany to the US, resulted in losses estimated at AUD$236 million. Allegations accuse the company of not adequately disclosing the risks associated with transporting electric vehicles.
- Sustainability
- The Singapore and Australian governments earlier in March signed an memorandum of understanding (MOU) to establish a green and digital shipping corridor. The Australian government stating the collaboration aimed to leverage Australia's potential as a major producer of green fuels and Singapore's status as the world's top bunkering hub and transhipment port to advance decarbonisation of the maritime industry. Under the MOU, both countries will work with interested partners to explore opportunities to develop zero or near-zero emission fuel supply chains, including building infrastructure, formalising standards, and developing and implementing the training requirements.
- IMO's Marine Environment Protection Committee (MEPC 81) met in London 18-22 March, where there was significant momentum toward adopting a greenhouse gas (GHG) emissions levy in the maritime industry. The Clean Shipping Coalition lauded the growing consensus for a GHG emissions levy, emphasising its importance over less impactful alternatives, while also stressing the need to focus on other vital measures like the global fuel standard (GFS) and enhancing energy efficiency through the Carbon Intensity Indicator (CII). A key proposal from the Pacific Islands and Belize set a notable price point of USD$150 per tonne of GHG emissions, marking an ambitious step towards meaningful climate action in shipping. The committee urged governments to work constructively over the (northern) summer to ensure it prioritises equity and a just transition for all involved. The meetings signal a critical move towards implementing comprehensive strategies to reduce the shipping sector's carbon footprint and achieve global GHG reduction targets.
- British Airways owner the IAG has announced its biggest-ever deal to purchase sustainable aviation fuel (SAF) from a US-based producer. Under a fourteen-year contract, California-based Twelve will supply the IAG with 785,000 tonnes of e-SAF to support its five European airlines – British Airways, Iberia, Aer Lingus, Vueling and Level. IAG has committed to 10 per cent SAF use by 2030 and said the deal takes the supply needed to one-third of the target.
· Terminal and Port Update -
o Patrick terminals
§ Brisbane: Delays approx. 0.5 day
§ Fremantle: Delays approx. 0.5 day
§ Sydney: Delays approx. 3-4 days
§ Melbourne: Delays approx. 0.5 day
§ A reminder that Patrick TAC charges increased effective 4 March 2024.
o DP World Terminals
§ Brisbane: Working with delays approx. 3 days - Brisbane terminal still experiencing considerable delays to truck turnaround times reported to be anywhere between 2 to 3 hours.
§ Fremantle: Delays approx. 0.5 day
§ Sydney: Delays approx. 0.5 day
§ Melbourne: Delays approx. 1 day
o VICT
§ Melbourne: Delays approx. 1.5 day
·
o AAT
§ Brisbane: Congestion issues expected until late March, which is a flow on effect from previous congestion in MEL (Mirrat terminal).
§ Port Kembla: Working with minimal delays.
§ Melbourne: Working with minimal delays.
o MIRRAT
§ Melbourne: Congestion has subsided, with berthing delays now just 3 days.
o New Zealand
§ Auckland: delays approx. 1 day
§ Tauranga: minimal delays approx. 0.5 day
§ Napier: minimal delays approx. 0.5 day
§ Lyttleton: minimal delays approx. 0.5 day
- Equipment
- Delays of dehiring empty containers expected to continue throughout March and into April.
- Melbourne requires increased lead times due to major infrastructure road works as transport companies deal with delays in and around the port precinct.
- Enterprise Agreements -
- DP World (Australia) and the Maritime Union of Australia (MUA) are still yet to finalise the in-principle agreement reached on 2nd February. Part B negotiations are still ongoing.
- DP World (Brisbane) are still yet to reach an agreement with the Electrical Trades Union (ETU).
- DP World (Fremantle) announced that the MUA will hold a stop work meeting on Thursday 28th March from 1200-1600.
- VICT are the next of the major terminals fast approaching the end of their current enterprise agreement, with negotiations expected to commence in October 2024 :
- Global Air Freight
- Latest market data shows rates have steadied at an average USD$2.37 per kg, 4.4% higher than the same period in February. The latest average spot rate continued to show a double-digit year-over-year decline of 11.6%.
- IATA released data for January 2024 global air cargo markets indicating a strong start to 2024.
- Total demand, increased by 18.4% compared to January 2023 levels (19.8% for international operations). This significant upturn marks the highest annual growth since 2021.
- Capacity, was up 14.6% compared to January 2023 (18.2% for international operations). This was largely related to the growth in belly capacity. International belly capacity rose 25.8% year-on-year on the strength of passenger markets.
- Vietjet announce a new service between Melbourne and Hanoi to commence on 3-4 June. The route will operate from Hanoi every Monday and Friday using Vietjet's A330 fleet, returning from Melbourne on Tuesdays and Saturdays. The service complements Vietjet's existing flights between Melbourne and Ho Chi Minh City.
- WorldACD data shows available capacity in the Asia Pacific region is up +19% year-on-year, with chargeable weight also improving by +10% in comparison to last year :
