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    Freight News

    HHLA sees revenue and earnings decrease

    German port and terminal operator Hamburger Hafen und Logistik AG (HHLA) recorded a drop in revenue and earnings in the 2023 financial year.

    HHLA said the ongoing war in Ukraine, geopolitical tensions, high inflation and interest rate hikes burdened the economy and continued to dampen the recovery from the pandemic.

    The company’s revenue decreased by 8.3% to €1.45 billion and the operating result (EBIT) fell by 50.4% to €109.4 million with the EBIT margin amounting to 7.6%. Additionally, HHLA’s profit after tax and minority interests came to €20 million from €92.7 million in the previous year.

    Angela Titzrath, HHLA’s CEO, commented, “In light of the extremely difficult conditions for global trade, HHLA has performed well in 2023, particularly in comparison to its major competitors. This year we are facing uncertain market conditions again. Regardless of this, we are expanding our presence as a European logistics group and continuing to invest in modernisation projects focussing on the Port of Hamburg, the expansion of our European network and the development of sustainable logistics solutions.”

    Furthermore, HHLA reported a container throughput of 5.9 million TEUs in 2023, translating to a year-on-year decline of 7.5%. The main driver of this development was the decline in volumes for the Far East shipping region – China, noted HHLA, while the positive momentum from North American cargo volumes and the throughput volumes of the Middle East were only able to partially offset this trend.

    HHLA expects a moderate increase in revenue and an operating result (EBIT) in the range of €85 million and €115 million for the current year. “Due to the unpredictability regarding the future development of geopolitical tensions, the ongoing war in Ukraine and the effects of the announced realignment of syndicate structures of shipping companies, this forecast is subject to great uncertainty,” pointed out the terminal operator.

    Source: Container News

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    Port of Oakland imports and exports continue to grow

    Container volume at the Port of Oakland surged in February, surpassing the volume recorded in the same month last year.

    Imports experienced a significant increase for the fourth consecutive month, rising by 32.1% to 76,734 TEUs compared to 58,073 TEUs in February 2023. This growth was fueled by robust consumer spending in Northern California, according to the port’s announcement.

    Meanwhile, exports also saw a notable uptick, rising by 24.2% to 69,242 TEUs in February 2024, compared to 55,279 TEUs in February 2023. This marks the third consecutive month of export growth and represents the highest monthly total since May 2022.

    Overall, combined full TEUs for the first two months of 2024 have increased by 18.1% compared to the same period in 2023.

    “The trends we saw in previous months have continued in February. Consumer demand remains strong in Northern California & Rocky Mountain states region for imports and in Asia for the region’s exports. We believe that cargo volume will continue to modestly grow for the rest of the year, reversing some of the declines we saw in 2022 and 2023,” stated Bryan Brandes, maritime director at Port of Oakland.

    In February 2024, the Port of Oakland experienced a 9.8% decrease in empty imports, with 13,142 TEUs passing through its facilities compared to 17,299 TEUs in February 2023.

    Similarly, empty exports declined by 7.2%, handling 23,633 TEUs in February 2024, in contrast to 38,014 TEUs in February 2023. This marks the seventh consecutive month of decline and suggests a trend of more containers returning to Asia loaded with US goods.

    Source: Container News

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    China’s container trade faces hold-offs due to supply-demand imbalance

    Container xChange has released its latest China market update, shedding light on the current container price trends in China.

    Despite expectations of price drops post-Chinese New Year, the market is witnessing a significant mismatch between buyer and seller price expectations, in a demand deficit environment.

    According to Christian Roeloffs, cofounder and CEO of Container xChange, “There is a significant imbalance between supply and demand price expectations for containers. Buyers are expecting price reductions in weeks to come, while sellers are holding off the inventory as they expect prices to remain stable due to tight capacity, especially after the diversions due to the Red Sea and highly imbalanced trade, particularly, for example from China into Russia.”

    China’s exports to Russia grew by 12.5% year on year in the first two months of 2024, while imports rose by 6.7%.

    Data from Container xChange’s market intelligence team reveals that while there is a surplus of units held up in Russia, capacity in that region remains saturated. This situation has not created enough confidence for significant price drops and has resulted in a cautious approach from both buyers and sellers, leading to a gradual filling up of depots. However, the current depot pressure is not yet strong enough to prompt traders and sellers to lower their price expectations, nor is there significant pressure from buyers to increase their price expectations.

    “Looking ahead,” Christian Reoloffs continued, “while mid to long-term forecasts suggest a necessary adjustment in prices to restore liquidity, the present market sentiment indicates a reluctance to anticipate significant price drops.”

    The buyer sentiment of further price declines is also echoed by the Container price sentiment index (xCPSI), a proprietary market sentiment tool for container prices by Container xChange, where the index value fell from an all-time high of 83 points in the last week of January’24 to 22 points as on 14th March 2024.

    The holding off of the capacity is also due to a demand lull, if we look at the situation from a pure economics basis. The market is currently not being driven by demand.

    The recent decrease in freight rates, from US$3351 on 23 February 2024 to US$3069 on 8 March 2024, represents an approximate 8.41% decline. This trend indicates a more balanced market and aligns with our observation that container prices are not showing significant increases in March.

    “The decline in freight rates and the steady container prices suggest that demand is under pressure. Additionally, the management of the Red Sea crisis has alleviated concerns of sudden container price rises, providing a more predictable environment for freight forwarders and stakeholders.”

    Deep Dive into China Container Rates:

    The analysis of container trading price data from November 2023 to March 2024 reveals a cyclical upsurge in prices leading up to the Lunar New Year, followed by a stabilization in prices post the holiday period. Cities such as Dalian, Fuzhou, Guangzhou, Shanghai, and Qingdao have shown significant percentage increases in prices, aligning with the cyclical trend.

    Container Trading Price development in China (November 2023 – 15 March 2024, US dollars for 40 ft high cube cargo-worthy containers)

    The average price for 40 ft cargo-worthy containers in China was around US$1700 in November 2023, while this has stayed at elevated levels since the Houthi attacks at US$2100 so far in March 2024.

    In 2024, China’s economic outlook is characterized by a blend of opportunities and challenges. It is expected that the country’s leadership will target a growth rate of approximately 5%, supported by robust government spending to stimulate economic growth and bolster public confidence.

    Fiscal expansion is anticipated to be a key strategy in driving growth, particularly through increased public investment and fiscal transfers. Geopolitically, China faces complexities in its relationships with Western nations. Relations with emerging economies are also expected to be strained, especially regarding security issues in the South China Sea.

    Source: Container News

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    Middle East line opens intra-Asia loop to link western India ports

    Oman-based Asyad Line is set to launch a container service connecting the Far East and West India, according to information collected from industry sources.

    To be marketed as the Far East Express One (FEX1), the service has been designed with stops in China, Vietnam, Thailand and Malaysia, in addition to India.

    On the Indian leg, the string will have three ports of call: Hazira, Mundra and Nhava Sheva.

    The full port rotation is Mundra, Hazira, Nhava Sheva, Haiphong, Shekou, Laem Chabang, Port Klang and Mundra. The first vessel is due to dock at Mundra on 30 March.

    Estimated transit times from Mundra will be 13 days to Haiphong, 15 days to Shekou, 20 days to Laem Chabang and 24 days to Port Klang.

    Established in 2020, Asyad Line was formerly known as Oman Container Lines (OCL). In India, Seabridge Marine Agencies, reportedly part of Mumbai-based Parikh Group, will be acting as a sole representative agent for Asyad Line, according to available information.

    The move comes as Far East imports into India have seen strong traction in recent months, because of growing demand for raw materials and semi-finished goods to meet manufacturing expansion in the emerging economy. This increasingly noticeable pattern, according to trade observers, is rooted in the so-called trade diversification that has the potential to propel reshoring or near-shoring supply chains.

    Several other niche intra-Asia carriers have introduced more connections out of India to tap the growth potential. A new crop of emerging feeder/regional lines, including SeaLead Shipping, TS Lines, Sinotrans and SITC, have joined Pacific International Lines (PIL), Evergreen Marine and Regional Container Lines (RCL) in expanding intra-Asia networks connecting to India.

    French carrier CMA CGM recently also opened a direct connection between West India and China. The Asia Subcontinent Express 2 (AS2) offers a rotation of Shanghai, Ningbo, Shekou, Singapore, Colombo, Mundra, Nhava Sheva, Singapore and Shanghai.

    Source: Container News

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    Shipping documents you need

    While most of these documents are mandatory, some of them depend on the type of cargo you are shipping as well as your origin and destination locations. So, it is important to know which documents are required for your shipment before you start shipping. Here are some of the essential documents required for sea freight:

    The most important shipping documents

    Bill of Lading (B/L):

    The bill of lading is perhaps the most important document in sea freight. It serves as a contract between the shipper and the carrier, acknowledging receipt of the goods for shipment and specifying the terms of transportation. The B/L also acts as a receipt for the goods and a document of title, which can be used to claim the cargo upon arrival at the destination port.

    Commercial Invoice:

    This document provides details about the goods being shipped, including their description, quantity, value, and terms of sale. It is used for customs clearance, taxation purposes, and as evidence of the transaction between the buyer and seller.

    Packing List:

    A packing list provides a detailed breakdown of the contents of each package or container being shipped. It includes information such as the number of packages, their dimensions, weight, and contents. This document helps customs officials and port authorities verify the cargo and facilitates the process of loading and unloading.

    Certificate of Origin:

    The certificate of origin is a document that indicates the country where the goods were produced or manufactured. It may be required by customs authorities to determine eligibility for preferential trade agreements, tariffs, or other trade regulations.

    Customs Declaration/Form:

    Depending on the origin and destination countries, various customs declaration forms may be required. These forms provide information about the nature, value, and origin of the goods being shipped and are essential for customs clearance.

    Insurance Certificate:

    While not always mandatory, an insurance certificate provides evidence of insurance coverage for the cargo during transit. It typically includes details such as the insured value, coverage period, and terms and conditions of the insurance policy.

    Dangerous Goods Declaration (if applicable):

    If the shipment contains hazardous materials or dangerous goods, a dangerous goods declaration must be provided. This document details the nature of the hazardous materials, their classification, packaging, labeling, and handling instructions in compliance with international regulations (e.g., IMDG Code).

    Export License or Permit (if applicable):

    Certain goods may require an export license or permit from the exporting country’s government. These documents ensure compliance with export controls, sanctions, or restrictions on the exportation of specific goods.

    Other Documents:

    Depending on the nature of the shipment and the requirements of the countries involved, additional documents may be necessary, such as certificates of inspection, phytosanitary certificates for agricultural products, or transit documents for goods passing through multiple countries.

    It’s essential to work closely with freight forwarders, shipping agents, and customs brokers to ensure that all required documents are prepared accurately and submitted on time to avoid delays or complications in the shipping process.

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    10 tips specifically tailored for sea transportation

    Sea transportation is a vital component of the modern economy, providing a cost-effective and efficient means of transporting goods and across long distances and connecting regions and nations in a globalized world.

    Choose the Right Shipping Method

    Consider factors such as cost, transit time, and cargo volume when selecting between full container load (FCL) or less than container load (LCL) shipping options.

    Select Reliable Carriers

    Partner with reputable shipping lines or freight forwarders with a proven track record for reliability, safety, and on-time deliveries.

    Optimize Container Packing

    Maximize container space and minimize damage by properly loading and securing cargo within containers. Use appropriate dunnage, bracing, and blocking techniques to prevent shifting during transit.

    Monitor Weather Conditions

    Stay informed about weather forecasts and potential maritime hazards along the chosen shipping routes. Adjust schedules or routes as needed to avoid adverse weather conditions.

    Comply with Regulations

    Ensure compliance with international maritime regulations, including customs documentation, container weight restrictions (VGM), and hazardous materials handling protocols.

    Utilize Technology

    Leverage maritime tracking systems and satellite communication technologies to monitor vessel locations, track shipments in real-time, and receive updates on transit status.

    Plan for Port Operations

    Coordinate with port authorities and terminal operators to optimize port operations, minimize dwell time, and expedite cargo handling processes.

    Consider Transshipment Options

    Evaluate the feasibility of transshipment hubs for optimizing transit routes and reducing costs, especially for destinations with limited direct shipping options.

    Implement Risk Management Strategies

    Develop contingency plans for potential disruptions such as port congestion, vessel delays, or unforeseen events like natural disasters. Maintain adequate insurance coverage for cargo protection.

    Promote Sustainability

    Explore eco-friendly practices such as slow steaming to reduce fuel consumption and emissions. Consider participating in voluntary environmental programs to minimize the ecological impact of sea transportation.

    By following these tips, you can enhance the efficiency, reliability, and sustainability of your sea transportation operations while mitigating risks and ensuring compliance with regulations.

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    5 reasons data integration and analytics are essential in omnichannel fulfilment

    The lure of omnichannel has been around for years. What business wouldn’t want a seamless and consistent experience across every channel, from in-store kiosks to mobile apps to call centres to social media channels?

    The problem is, creating a seamless omnichannel experience isn’t easy. At the very least, it needs to be powered by a high-performing order fulfilment strategy – and here’s where data integration and analytics come into the picture. They’re essential to the running of order fulfilment; they’re the petrol that fuels the engine. But what does that look like on a more granular level? Here are five reasons why data integration and analytics are essential in omnichannel fulfilment.

    1. Improved visibility and transparency

    Let’s be clear. Without integrated data and analytics, delivering an omnichannel experience isn’t feasible. Why? Because to provide customers with consistent experiences, you need accurate and up-to-date inventory data connected across all your different channels. If you don’t, you’re operating in the dark, leaving your inventory management strategy to chance.

    Visibility of inventory data is what enables you to optimise your omnichannel offering. It’s what gives you the insight to make your stock agile, meaning you can keep products moving and serve your customers in a more dynamic and responsive way.

    In its simplest form, when all your inventory data is integrated, you can identify which channels need stock and then take action to move it to where it needs to be – and you can do it all in real time. Otherwise, you risk stockouts, delays, lost orders and other forms of inefficiency.

    2. Enhanced decision making

    This links back to the first point about integration. Data isn’t useful if it’s siloed; it’s only valuable if it’s connected. And when it’s connected, you can interpret it and act on it. It’s about using analytics to uncover patterns and insights to inform decision making.

    Take autonomous vehicles. They’re considered a vital part of the future of last-mile delivery. To function correctly, they rely on huge swathes of data from different sources, such as image recognition data, location data, sensor data and weather data.

    The technology within the vehicle analyses all this simultaneously and uses it to make decisions that enable the car to choose the best routes before setting off, to signal and make turns at the right time and, ultimately, to drive more safely.

    To deliver an optimised omnichannel experience, this level of decision making is required throughout the entire backend system.

    3. Streamlined order fulfilment

    Without visibility of your inventory data, it’s going to be a tough ask to streamline your order fulfilment. But, at the same time, that’s the main priority: getting orders to customers in the most efficient way possible.

    Analytics holds the keys to make this happen. It can be used to predict the fastest routes available, where different types of SKUs should be stored within your distribution network, how many vehicles you need for last mile, and so on.

    Then there’s the impact of analytics on warehouse operations. How can you reduce order throughput times? How can you increase picking accuracy? These are the questions that analytics helps answer. And the rewards are significant. According to the EU’s report on EU business competitiveness in the global economy, the productivity of companies investing in data-driven innovation and analytics grows approximately 5-10% faster than that of companies not investing.

    4. Enhanced customer experience

    At its core, omnichannel is about customer experience – and all it takes is a single bad experience to turn customers away. In fact, PwC reports that one in three consumers globally walk away from a brand they love after just one bad experience.

    In terms of order fulfilment, a bad customer experience is when there are discrepancies between your different channels. Imagine you’re selling the latest designer shoes. If they’re available to buy on TikTok but not on your website, that’s a poor customer experience.

    There’s stock available, but the customer who chooses to shop via the website, their preferred channel, loses out. They miss the trend, you miss their business and potentially their loyalty.

    But when you have all your inventory data integrated and plugged into your order fulfilment systems, you can feed the right information into all your channels. That means no customer loses out, helping you to build brand loyalty.

    5. Cost efficiency

    Finally, there’s the impact on cost. Omnichannel retail isn’t cheap. According to McKinsey, the costs of omnichannel order fulfilment are both “high” and “rising”. The consultancy estimates these at roughly 10-20% of sales.

    So, every effort has to be made to reduce these costs and safeguard the bottom line. And the only way to do that is through data. The insight from a connected picture can show you where the cost inefficiencies lie so you can take action. But what does this look like in practice?

    Well, a real-time view of inventory can help you see how to increase space utilisation in your warehousing network, or when to offset labour costs during low seasonality. It gives you the insight to see where a change in your operating model can deliver savings.

    Source: Maersk

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    Ready your supply chain for the new challenges in 2024

    Deep dive into strategies that can drive resilience across your Asia Pacific supply chain.

    Logistics in Asia Pacific is already in a state of flux that’s creating bottlenecks and affecting the bottom line. Experts predict this upheaval will only increase as the year moves ahead. What are the causes of this turmoil? The pertinent answer to this question ranges from an unstable global order, more extreme weather events, accelerating technological change and economic uncertainty. The supply chain resilience risks include the following:

    Reglobalisation

    Evolving geopolitics is creating new regional partnerships and legislations that can impact global trade.

    Climate impact

    2024 will experience extreme weather that can significantly disrupt land-based, air and maritime transportation systems.

    Corporate sustainability

    The demand for sustainable logistics is resulting in implementation of new technology that’s not scalable as of now.

    Strikes and industrial action

    Growing labour unrest across some parts of the world can affect production and logistics.

    Leveraging disruptive technologies

    Implementing blockchain and artificial intelligence (AI) is not only costly but also runs the risk of misinformation and disinformation.

    Demand fluctuations

    Unpredictable content-driven consumer buying is testing the supply chains of well-known brands to the limit.

    How can your Asia-Pacific supply chain overcome this mix of diverse challenges? The answer: supply chain resilience. Instilling resilience is necessary to make the most of Asia Pacific’s extensive manufacturing ability and rapid consumer market growth. It’s the key to transitioning to the growth phase in the near future.

    In the latest bluepaper, we provide you insights into immediate actions and long-term strategies that can build resilience in your supply chain and empower it to beat what 2024 dishes out.

    Here’s a preview of what this edition, titled ‘Overcome Supply Chain Risks in 2024 and Improve Resilience: Understand and resolve key challenges for APAC logistics using the right model for resiliency’ offers:

    • Where does APAC stand?: Despite global turbulence, large-scale manufacturing and an ever-increasing consumer market will tide APAC over if it adapts logistics to challenges.
    • Global trends and supply chain resilience risks for 2024: This year has a myriad of the aforementioned challenges in store for APAC supply chains.
    • Implications for APAC-based logistics players: The logistical landscape demands a resilient supply chain that can cater to the growing demand in the region.
    • Action steps for 2024: Regular audits of logistics practices are a must to ensure a resilient supply chain.
    • Long-term strategies for APAC logistics: Strategies that enhance relationships with suppliers, help implement digital solutions and advance sustainability are essential to foster growth amidst tough times.
    • Paving the way ahead: Collaborating with the right logistics partner that has the experience, footprint and acumen to drive resilience in your supply chain is the first step towards navigating the troubled waters.

    Source: Maersk

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    Hapag-Lloyd increases Asia container rates

    German ocean carrier Hapag-Lloyd said its ocean tariff rates for Freight All Kinds (FAK) between Far East and North Europe & Mediterranean will increase.

    The updated prices will apply for cargo transported in 20’ and 40’ dry containers, including high cube equipment, and reefer for sailings commencing on 1 April, as follows:

    • Per container from Far East (in US$)
    Destination 20′ Dry 40′ Dry 40′ HC 20′ RF 40′ RF
    North Europe* 1600 3000 3000 1600 3000
    West Mediterranean* 2800 3500 3500 2800 3500
    Adriatic* 2825 3550 3550 2825 3550
    East Mediterranean, Black Sea (Bulgaria, Romania), Türkiye & Egypt 3300 3900 3900 3300 3900
    North Africa* 3475 4700 4700

    Additionally, the Hamburg-based box line announced a new General Rate Increase (GRI) from Asia to the West Coast of Latin America, Mexico, Caribbean, Central America and Latin America East Coast for 20’ and 40’ dry containers, including high cube equipment and 40’ Non-operative reefers.

    This GRI will be applicable to all containers from 1 April, except Puerto Rico and Virgin Islands, where the new rates will be effective from 19 April.

    The details for this GRI are listed below:

    • 20′ Dry Container: US$700
    • 40′ Dry Container: US$900
    • 40′ High Cube Container: US$900
    • 40’ Non-operative Reefer Container: US$900

    Hapag-Lloyd noted the following geographical scopes:

    Asia (excluding Japan), covers the following countries: China, Macau, South Korea, Thailand, Singapore, Vietnam, Cambodia, Philippines, Indonesia, Myanmar, Malaysia, Laos, Brunei.

    The West Coast of Latin America, Mexico, Caribbean (excluding Puerto Rico, Virgin Islands, US), Central America and East Coast of Latin America covers the following countries: Mexico, Ecuador, Colombia, Peru, Chile, El Salvador, Nicaragua, Costa Rica, Dominican Republic, Jamaica, Honduras, Guatemala, Panama, Venezuela, Brazil, Argentina, Paraguay, Uruguay.

    Source: Container News

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    7 Key Factors Affecting Shipping Costs

    Shipping costs are a critical consideration for businesses involved in transporting goods. Understanding the factors that influence these costs is essential for effective budgeting and logistics planning. Here are seven key factors that can impact shipping expenses:

    1. Distance and Destination:

    The distance between the origin and destination plays a significant role in determining shipping costs. Generally, longer distances incur higher expenses due to increased fuel consumption, maintenance, and labor costs. Additionally, shipping to remote or rural areas often requires additional logistical efforts, leading to higher charges.

    2. Weight and Size of Shipment:

    The weight and size of the shipment directly affect shipping costs. Carriers typically use a pricing structure based on dimensional weight, which considers both the package’s weight and volume. Heavier and bulkier shipments require more resources for handling and transportation, resulting in higher shipping fees.

    3. Shipping Method and Service Level:

    The choice of shipping method and service level can significantly impact costs. Expedited or express shipping services generally command higher prices compared to standard or economy options. Additionally, factors such as guaranteed delivery times, tracking capabilities, and special handling requirements can influence shipping expenses.

    4. Packaging Requirements:

    Proper packaging is essential for protecting goods during transit, but it also affects shipping costs. Inefficient or oversized packaging can increase dimensional weight charges, while fragile items may require additional protective materials and handling, adding to the overall shipping expenses.

    5. Fuel Prices and Transportation Costs:

    Fluctuations in fuel prices directly impact transportation costs, as fuel is a significant expense for shipping carriers. Volatility in global oil markets can lead to unpredictable changes in shipping rates, affecting businesses’ bottom line. Economic factors, such as supply and demand dynamics, also influence transportation costs.

    6. Carrier Selection and Negotiated Rates:

    The choice of shipping carrier and negotiated rates can have a substantial impact on shipping costs. Different carriers offer varying pricing structures, transit times, and service levels. Businesses that regularly ship large volumes can often negotiate discounted rates with carriers, resulting in significant cost savings over time.

    7. Seasonal Demand and Peak Periods:

    Seasonal fluctuations and peak shipping periods can affect pricing and availability of shipping services. During busy seasons such as holidays or peak shopping periods, carriers may impose surcharges or limit capacity, leading to higher shipping costs and potential delays. Planning ahead and adjusting shipping strategies can help mitigate these challenges.

    In conclusion, understanding the factors influencing shipping costs is essential for businesses to optimize their logistics operations and manage expenses effectively. By carefully evaluating these factors and implementing cost-saving measures where possible, companies can enhance their competitiveness and improve overall profitability in the global marketplace.

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