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Tag: Container Shipping

Define what is next in Global Shipping

Posted on by Keith McKinley

Conventionally, one-way leasing has been seen as a niche industry in global container shipping. This is all about to change. With the global supply chain of old in a state of disruption, now is the time to define what is ‘next’ in global shipping, one container-specialist argues. And what is next, is one-way leasing.

The global supply chain of old seems to be in an upheaval, and a growing stack of empty containers that cannot make their way home from American ports are likely contributing to an expanding global mismatch in supply and demand – adding to a possible crisis, which – some say – is hiding in plain sight.

One-way may be the best way forward

For these reasons, the ever-changing world of global logistics is facing many new demands that an often-conservative container-shipping industry must adapt to keep up – including: the use of technology, fleet availability and flexibility as well as solutions that benefit the triple-bottom-line. This might explain why OVL Container’s CEO Osmo Lahtinen (pictured) has seen a recent uptick in interest in one-way leasing. Lahtinen is not surprised though – and he argues that one-way leasing may just be the best way forward, with the developments happening in the global supply chain.

He adds: “The one-way container leasing industry is highly equipped to handle the new requirements from the market and the supply chain – not least in terms of, say, fleet accessibility, the utilization of AI and the continued green transition. However, this requires breaking away from being considered a niche solution. This means that we, as specialists, must subvert expectations and misconceptions about the service. Not least among those, who still think it is primarily a tailor-made solution at a high-end price.”

‘Next practice’ must become best practice

Lahtinen and his company, OVL Container, are part of a highly specialized generation of emerging one-way leasing companies, including One Way Lease and Titan Containers, are spearheading a change within container shipping, where the ‘same-old, same-old’ no longer will suffice.

Right now, uncertainty is stalling the industry’s momentum, according to Maritime Analytica, and that uncertainty is driven by high freight costs, digitalization and sustainability investments. More of the same will not fix it, says Lahtinen. And this means that ‘next practice’ must become best practice, now.

“While we try to embody one-way leasing done right today, we are now more than anything determined to help embody what will be ‘next practice’ in container shipping, as a whole. This means embracing digital technology such as AI, while investing in an accessible depot network as well as a reliable fleet of green containers. And all this, without slapping on a premium price tag. Because – and let us be honest – price is still king with increasing port fees, inflation, and geopolitical risks”, Lahtinen adds.

Key Facts and Figures:
• Osmo Lahtinen founded the one-way container leasing specialists, OVL Container, in 2007.
• The WTO said global trade growth would have been +3%, but uncertainty alone has wiped out 1.5%.
• The Container xChange indicates that one-way container leasing is likely under 5% of the total market.

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Port Congestion Review

Posted on by Keith McKinley

Beacon, a supply chain visibility and collaboration platform, has released its 2023 Port Congestion Review. While average global vessel anchor and berth times hovered at a combined 1.5 days throughout the year, Asia outperformed while North American ports struggled. In a sign of further recovery for global supply chains, container dwell times at port improved between January and December at 71% of analysed ports with Colombo leading the way with average dwell times of 1.8 days in 2023.

North American ports struggle with congestion, and SE Asia is amongst the best performing regions in 2023

Overall, Asia is performing very well when it comes to port congestion (the combination of vessel anchor and berth times) – with all regions except the Indian Subcontinent (1.7 days) tracking below global averages over the course of 2023.

SE Asia outperformed China for much of the year with congestion times averaging 1.2 days in comparison to China’s 1.3, helping to solidify its position as an alternative manufacturing hub.

China’s performance was hindered by persistent congestion at the port of Ningbo-Zhoushan, one of the busiest in the world, where congestion times averaged more than 9 days, although improvement was seen with congestion dropping below 6 days in November and December.

Transpacific hubs on the West Coast of North America continue to struggle with congestion, with combined anchor and berth times averaging 3 days in 2023. Central and South American (1.3 days) and European(1.4 days) ports outperformed the global average of 1.5 days, while the Middle East and North Africa saw congestion relief beginning in August through to the end of Q4.

Colombo, Melbourne and Charleston among the best ports for container dwell time in 2023

Analysing the time it takes for containers to depart the port after being unloaded, Beacon has ranked the best and worst performing ports for container dwell time in 2023. Of note, the ports of Algeciras (Spain), Qingdao (China), Laem Chabang (Thailand) and Liverpool (UK) all registered container dwell time improvements of more than 49% between January and December.

Although port congestion may be out of cargo owners’ control, how they respond to it isn’t. Beacon Live Boards makes it easier than ever to share updates with partners, act with speed, manage risks and generate the insights needed to improve supply chain performance. Ultimately allowing customers to optimise their supply chains in the most effective way possible.

Fraser Robinson, CEO of Beacon, commented: “It is great to look back at the data we have collected over 2023 and interesting to see some trends beginning to emerge. Supply chain disruptions, as we are experiencing at the moment in the Red Sea, can incur heavy financial costs and while supply chain management isn’t a golden ticket to completely eliminate risk, investing in the right tools, like Beacon, is one of the strongest ways to minimise the impact.”

Container Shipping Lines Over-ordered Vessels

Posted on by Keith McKinley

Container shipping CEOs have killed the golden goose by ordering too many ships, and also might need to re-examine the type of vessels suited to a more regional world dominated by geopolitical tensions, according to the former chairman of two of the world’s leading carriers.

Bronson Hsieh (pictured), former chairman of both Evergreen and Yang Ming container lines, told the latest episode of The Freight Buyers’ Club podcast,  that while containerized shipping volumes were predicted to grow by 2.2% in 2024 compared to 1.4% this year this, “doesn’t mean shipping companies are going to be profitable.”

Instead, he said an improved cargo demand picture would be swamped by a forecast 9.1% increase in global box shipping capacity as more newbuilding container vessels joined the fleet. As a result, Hsieh believes 2024 will be, “really very tough for shipping companies.”

Smaller ships needed?

Hsieh also argued that as investors located manufacturing to a wider diversity of locations to move risk away from China and closer to importers, the nature of global trade would evolve, a process he calls,  “globalisation with regionalisation.”

In future, as a larger share of global manufacturing output migrates to Central America, South Asia and Southeast Asia, this will mean the largest ships will be more difficult to deploy efficiently.

“I would suggest don’t build too many of these huge vessels in the future because part of the cargo will gradually be relocated [away from China],” he said.

Go vertical, my friends

However, Hsieh was positive about the strategies pursued by those carriers which have invested pandemic windfalls in value-added, end-to-end logistics service capacity. He believes this is more logical than hoping that port-to-port service revenues and heavy investment in assets will consistently deliver profits when this strategy has failed over previous decades.

“In my personal point of view, that’s the right direction,” he said, pointing to container lines which have invested in warehouses, trucking companies, consolidation businesses, ports and logistics capacity. I think a lot of shipping carriers, they learn something from the logistics service providers. They don’t build any vessels, but they make some profit. “But shipping carriers, they buy a lot of assets, but the money they earn every year is not the same as those logistics service providers earn.”

 

LCL Service for Dangerous Goods

Posted on by David Priestman

The international transport and logistics provider cargo-partner has once again expanded its range of LCL solutions and introduced a new sea freight consolidation service for dangerous goods from China to Europe. The service is suitable for a wide range of products and industries, including automotive components, car batteries and electronic goods with various types of integrated batteries.

As shipping companies react to lower demand with blank sailings, cargo-partner has recognized the need to offer its customers more flexibility and respond to special requirements. To meet these challenges, the logistics provider has introduced a new weekly consolidated transport service for goods that are classified as DG Class 8 and DG Class 9 by the International Maritime Organization (IMO). This classification includes products such as various types of batteries, whole electric vehicles, handheld power tools, e-bikes and e-scooters as well as many other electronic devices with an integrated power source.

cargo-partner offers this service with weekly departures from Shanghai to Koper and average port-to-port transit times of 29 days. An additional door-to-door service includes pickup and consolidation from anywhere in China, deconsolidation at cargo-partner’s logistics centres in Budapest and Ljubljana, and delivery to any destination in Europe. In addition, the logistics provider can offer a range of ocean shipper’s and buyer’s consolidation options.

“Many of our customers are currently looking for a reliable solution for their import shipments from Asia – especially for industries that require specific battery components,” explains Felix Miletich, Corporate Director Product Management Sea Cargo LCL at cargo-partner. “With our dedicated LCL services for dangerous goods that include a wide variety of batteries, accumulators and other rechargeable cells, we can provide a stable and reasonable alternative to other forms of transportation.”

Additional air and road transport solutions for dangerous goods

In addition to this cost-effective LCL sea freight service, the transport provider also offers air freight and road transport solutions for DG cargo on request. cargo-partner long-standing experience in transporting dangerous goods from Asia to Europe and vice versa, as well as on other popular international transport routes, including door-to-door solutions, customs clearance and comprehensive logistics services through the company’s extensive warehouse network.

cargo-partner is a privately owned full-range info-logistics provider offering a comprehensive portfolio of air, sea, land transport and warehousing solutions. With 40 years of expertise in information technology and supply chain optimization, the company designs tailor-made services for a wide range of industries to create competitive benefits for its customers all around the world. Founded in 1983, cargo-partner generated a turnover of over 2.06 billion euro in 2022 and currently employs more than 4,000 people worldwide.

 

Container Shipping ‘Maxed Out’ Claims Analyst

Posted on by Keith McKinley

Jan Tiedemann (pictured), Head Analyst at Alphaliner, says for the first time in history the latest fleet additions are replacement vessels rather than designed to boost global capacity and increase the penetration of containerisation.

With record deliveries of container ships expected this year and next, most analysts have predicted further heavy downside pressure on container shipping freight rates to be offset by carrier efforts to reduce capacity by slow steaming and layups or, alternatively, by a self-destructive scramble for market share. However, Tiedemann believes a very different picture might play out in the coming years as a deluge of new vessels enter service.

“The thing that makes me at least a bit hopeful is that, for the first time, maybe in history, or in the history of container shipping, we’re coming towards a point where some of the orderbook might not be for growth, but actually for replacement,” he told the latest episode of The Freight Buyers’ Club podcast, produced with the support of Dimerco Express Group.

Alphaliner forecasts that a record 385 vessels totalling 2.22m TEU capacity will be delivered this year. This new high mark for box ship deliveries will then be immediately broken in 2024 when a further 391 ships of almost 3m TEU capacity is forecast to enter service, including 113 ships of over 12,500 TEU capacity.

Tiedemann notes that global fleet capacity is now around 26m TEU, up from six million TEU just 20 years ago. “For the last 20 years the global container fleet has grown by roughly 1 million TEU every year,” a rate he believes is unsustainable in the coming years given the previous success of containerisation penetration and the lack of new markets to target.

He argues that for the first time many new deliveries have been purchased primarily as replacements for older, less safe, less clean and less efficient ships rather than to enable the expansion of containerisation. Instead, he predicts rising vessel scrapping in the coming years, including of ships as young as 15 years.

Slowing growth

“There will still be growth in the market, but to some degree, growth in container shipping is maxed out because there’s no more geographies to expand into,” he said. “There’s not much more slow steaming you can implement because you’re already slow steaming. There are no more commodities you can really expand container shipping into because everything is already containerized with very, very few exceptions.

“So, we will see maybe for the first time on a big scale – on a global scale – in the next five to 10 years, a fleet renewal and vessel replacement scheme which means that a [lot] of tonnage will have to go to scrap. And that could concern ships – depending on how the economy and how the trade fares – which are maybe barely even 15 or 20 years old at some point.”

If lines do not start accelerating the scrapping of vessels, they will very soon have few deployment options left open, he adds. “There are so many ships ordered that the answer to the question, ‘Where are they all going to go?’ needs to be, ‘Everywhere.’ “Every trade will have to absorb these ships.”

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