About: Macnels Macnels

A bill is set to be enacted in the United States House of Representatives to form the US Shipping Act. with motive: to resolve supply chain congestion caused by the confluence of record consumer and corporate import demand in the US, combined with the delays caused by the Covid-19 pandemic.

Cargo merchants had urged the US Congress to act to amend the rules and function of the Federal Maritime Commission (FMC), claiming that congestion, delays, increasing costs, and a lack of equipment at US seaports have caused significant disruption to the ocean shipping network.

This new attempt comes in response to numerous complaints filed with the FMC by shippers alleging carriers engaged in unfair trade practices and imposed inflated costs. While the FMC has voiced worry about market circumstances, representatives of shipping companies immediately criticized these new legislations.

According to popular notion, the severe congestion issue was the result of the consolidation of shipping into a handful of ocean carriers, which removed the rivalry that existed for numerous years previous and hence the mutual regulation.

The World Shipping Council (WSC), an advocacy organization for container shipping, claimed the new legislation was defective. According to the WSC, liners are not entirely responsible for existing supply chain bottlenecks, and the law is “infused with fundamental unfairness.”

“Congestion in the supply chain is common. Every link in the supply chain is under severe pressure, from maritime ports to truckers, rail trains, and warehouses. It is implausible, inequitable, and counterproductive to attempt to solve all the supply chain problems by regulating just one class of supply chain participants—ocean carriers,” the WSC hit back, implying that the law was designed to benefit shippers in commercial disputes.

The Ocean Shipping Reform Act of 2021, introduced by Reps. John Garamendi, D-Calif., and Dusty Johnson, R-S D., establishes minimum contract requisites for ocean carrier service agreements and transitions the burden of proof in regulatory proceedings away from shippers and toward container lines. Additionally, it defines reciprocal trading as a component of the FMC’s mandate – including a requirement that ocean carriers cannot refuse export goods that can be loaded safely and in a reasonable amount of time.

Among other supervised to the FMC to overlook ocean carriers, the legislation:

• Updates standards for ocean common carriers to reflect the best industry practices.
• Imposes penalties on ocean common carriers and marine terminal operators who fail to confirm that any demurrage or detention fee conforms with FMC rules.
• Exempts maritime terminal operators from any terminal detention or demurrage costs if the charges are based on state-mandated public port rates.
• Effectively codifies the FMC Interpretive Rule on Demurrage and Detention Under the Shipping Act and requires ocean carriers to abide by basic employment conditions established to be in the public interest.
• Requires ocean carriers or marine terminal operators to keep all records about demurrage or detention costs for a period of at least five years and to make such documents available upon request to the FMC or billed party.

Simply because the market has momentarily shifted due to extraordinary consumer and corporate import demand in the US does not justify legislating an unlevel commercial playing field that will endure for many years if adopted.

Finally, Congress should stop and consider the implications for trading partners, whom this measure would encourage to adopt similar restrictive legal and regulatory systems in their nations if passed. For the US economy, a protectionist race to the bottom in maritime transportation regulation is not a viable approach.

Source: Container News

The dearth of ships available for charter or sale has caused Wan Hai Lines to put plans to re-enter the Asia-Europe tradelane on hold.

The Taiwanese liner operator was addressing speculation that it had ambitions to restart its Asia-Europe service, axed in in 2010 due to a lack of scale.

Speculation grew after Wan Hai launched a standalone Asia-US west coast service last year and an Asia-US east coast in June.

Wan Hai said, “Re-entering the European lane is not considered for the time being, due to the lack of suitable ships.”

Management said globally, the idle container ship fleet was at a historical low of 0.7%, meaning almost all available vessels are in use.

“Liner operators are not deliberately withholding any vessels. Freight costs will remain high and next year, we expect higher revenue and profits,” said Wan Hai.

Primarily an intra-Asia carrier, it pointed out that congestion in major Asian ports, including Singapore, Hong Kong and Busan, remained severe. This would exacerbate equipment and capacity shortages in the traditional Q3 peak season, lending support to freight revenues, it added.

Wan Hai said transpacific services accounted for nearly 40% of its H1 21 revenue, and healthy demand persuaded the company to offer regular sailings. Its H1 21 net profit swelled 19-fold year on year, to $1.21bn, thanks to rocketing freight rates, with revenues up 28%, to $3.1bn.

The company has more than 40 ships on order and expects delivery of some to start this year.

Wan Hai added that it had entered into a leasing contract with Seaco Global, a subsidiary of China’s HNA Group, for 5,570 containers. The total lease amount is $46.59m. It had said in May it planned to procure more containers, after having ordered 50,000 20ft boxes from China International Marine Containers in January.

Source: The Loadstar

Significant congestion has returned to plague Europe’s inland waterways, and following last month’s flood damage there is concern over an absence of alternative routes.

Contargo’s latest weekly update reports delays of 43 hours for barge handling into the seaport at Antwerp, and longer into Rotterdam, where average waiting is more than 64 hours.

One source told The Loadstar: “The return of substantive congestion in the ports is due to the lack of berthing capacity available for freight barge traffic. And compounding this, we are seeing a considerable drop in volumes offered by inland navigation services.”

Sources were unable to pinpoint a clear reason for the cut in available volumes, but warned they expected freight movements around Europe to be impacted for some time.

While port problems not unique to Europe, there is mounting concern as the continent gears up for the looming peak season.

One source said: “Chinese ports are still extremely congested, to such an extent it’s feared there will not be sufficient capacity to handle Christmas supplies due to hit in October.”

For those seeking alternative routes to market, July floods that brought two months’ worth of rain in 48 hours, are still causing restrictions on certain rail lines.

But an MSC customer advisory noted: “Concerning [the] Belgian rail network, we are pleased to report that rail traffic from our depot Athus can partially resume. This will be via the alternative routing Ottignies/Charleroi-Namur an Arlon-Athus; this alternative route has weight and capacity limitations and will be used mainly to clear the backlog until the regular line can reopen.”

Expectations are that the regular line from Athus will reopen next week, although this has not been confirmed.

The source noted that, even with rail access hindered in the east of Belgium, France and Luxembourg, they did not expect delays of goods moving by rail to “exceed 24 hours”, but with barge availability declining as congestion mounts there could be a surge in rail demand.

They added, somewhat sarcastically: “So, on the multimodal front, it seems all is back to prior-flood times.”

Source: The Loadstar

The lockdown in South Vietnam has caused a 100,000 teu pile-up at Ho Chi Minh City’s Cat Lai port.

And in China, ports at Shanghai and Ningbo are reportedly also facing additional congestion from new Covid restrictions.

According to Saigon Newport (SNP), yard density at Cat Lai is currently around 85%, with 106,700 teu clogging the terminal, although 2,000 containers were cleared a few days ago.

SNP said it had experienced a “rapid surge in the volume of over-dwelled import containers” at Cat Lai, which had negatively impacted vessel handling, and has implemented measures to encourage shippers to pick up their cargo, including offering free transport to nearby depots.

Marc Guilhem, owner of Ho Chi Minh-based forwarder Cargoteam, said many factories had closed or reduced production to 50%-70% during the lockdown.

“So containers are piling up with nobody picking them up, and they don’t have room for new containers coming in,” he told The Loadstar . “So far we can still use Cat Lai, but they’re going to have to distribute more container blocks to the other smaller terminals.”

Vung Tau’s Cai Mep port is the deepwater alternative to Cat Lai, and Mr Guilhem said its terminals were “operating fine”, but added: “The problem is it’s much further away, so who then pays for the additional trucking or barge fees?”

Furthermore, he said, there were still equipment shortages, which have persisted since the pandemic began.

“And freight rates have gone up five times already, it’s getting really out of control,” said Mr Guilhem.

According to Maersk’s latest update, some factories are expected to reopen next week, meaning empty container availability could worsen.

“As factories start to reopen and manufacturing starts to ramp up…[the] expectation is that we will once again experience severe equipment shortages in the southern provinces in the weeks to come,” the carrier said, noting equipment supply in the north was also “extremely tight”.

Maersk added: “From a vessel schedule standpoint, sailings have largely continued as planned, albeit with some departure delays.”

However, with Maersk also noting the deteriorating Covid situation in China, it listed some 14 transpacific sailings as being delayed over the next 10 weeks.

According to Sea-Intelligence, congestion is worsening in both Shanghai and Ningbo, a possible early warning of the coming impact of new Covid restrictions.

Indeed, speculation is mounting over the possible impact of another nationwide lockdown in China. So far, the main impact is on vessel crew, who face additional testing and restrictions on change-overs.

One forwarder said it would cause “severe trauma” for logistics if Chinese ports close, or if vessels were delayed or not allowed to berth.

Source: theloadstar

OOCL has launched a rail-sea service from China to the US east coast, which it claims is a first.

The departure of the first dedicated train carrying containers for US shippers took place from the Xian rail hub last week.

The joint-venture between the Hong Kong-headquartered carrier and its forwarding arm, OOCL Logistics, will use the Chang An block-train service from Xian to Kaliningrad, Russia, and a feeder vessel to Bremerhaven to connect with the carrier’s North Atlantic services to the US east coast.

“Connecting China and North America by using the Asia-Europe land bridge and the Atlantic ocean is the first [service] of its kind to be operated by an ocean carrier,” claimed OOCL.

“The intention is to provide reliable and timely shipments by seizing the opportunity to avoid the current high levels of traffic seen on routes to the west coast and through the Panama Canal,” it added.

Extra loaders deployed by ocean carriers between Asia and the US to meet high demand ahead of an expected exceptional peak season, has pushed the number of ships waiting for berths at Los Angeles and Long Beach back above 30. And with overwhelming congestion on inland rail services added to the mix, carriers are unable to charter additional ships due to the acute scarcity of open container tonnage on the market.

According to Jon Monroe, of US-based Jon Monroe Consulting, it is now taking 12 to 13 weeks from booking a container to export from a Chinese port to Los Angeles delivery, compared with just four to five weeks in pre-pandemic 2019.

And Mr Monroe warned that, for an IPI (inland point intermodal) movement, shippers needed to allow for delays of a anything up to 10 weeks further delay before the arrival of containers at their final destination.

One shipper told The Loadstar he might be interested in the service if the rail connection was reliable.

“I think OOCL might have hit on a winner here, as the situation for space and timing on the transpacific is pretty desperate at the moment, but we would definitely need transparency on the whole of the multimodal movement and know where our boxes are at any time,” he said.

“So far the rail services from China to Europe have been a bit patchy, to be honest, with a couple of our boxes ‘lost’ in a siding for a couple of weeks. We had our customer screaming down the phone at us on a daily basis, but we were not able to give him an update. At least if boxes are on a ship off LA we know where they are,” he said.

In the second quarter, OOCL’s liftings declined by 1.5% on Q1, to 1,948,527 teu, although revenue increased by 15%, to $3.47bn, for an average rate of $1,779 per teu.

OOCL is a subsidiary of state-owned Cosco Shipping.

Source: The Loadstar