China State Shipbuilding Corporation (CSSC) has announced the launch of what is claimed to be the world’s largest capacity containership coming in at 24,116 TEUs.
The ship, named MSC Tessa, was floated out of its building dock at the Hudong Zhonghua Shipbuilding’s Changxing Shipbuilding Base, located on Shanghai’s Changxing Island, on August 1. Hudong Zhonghua is one of the major shipbuilding units belonging to the state-owned CSSC.
With a carrying capacity of 24,116 twenty-foot equivalent units (TEU), MSC Tessa will surpass Evergreen’s Ever Alot by 112 TEU to take the title of the world’s largest containership.
Ever Alot, the world’s first 24,000 TEU containership, was also built by Hudong Zhonghua Shipbuilding and was only recently delivered in June to a subsidiary of Taiwanese shipping company Evergreen Marine Corporation.
MSC Tessa measures in at 399.99 meters long with a beam of 61.5 meters. It is one of four ultra-large containerships on order at Hudong Zhonghua for Mediterranean Shipping Company, the world’s largest container shipping operator. Delivery is planned for later this year.
CSSC said in addition to the float out, MSC’s No. 4 newbuilding has now entered the building dock, joining No. 2 and No. 3, “forming a spectacular scene of batch construction.”
CSSC, which is a major shipbuilder for China’s PLA Navy, said MSC Tessa and the three other newbuilds, which will be classed by DNV, are designed independently by MSC and it holds no intellectual property rights to the design.
The shipbuilding conglomerate did however share the following design highlights:
Hybrid scrubber desulfurization unit
Small bulbous bow, large diameter propellers, and energy-saving ducts
A new bubble drag reduction system that reduces total energy consumption corresponding total carbon emissions by 3%-4%
A new shaft generator system that can effectively reduce fuel consumption, optimize EEDI energy efficiency indicators, and reduce GHG emissions.
Optimized superstructure, radar mast, and other design features that maximize TEU capacity compared to similarly-sized ships (by dimensions)
Source: gcaptain.com
Momentum
Shipping is a full service, international freight forwarder, offering the
following services:
Ocean
Freight
Air
Freight
Import
and Export Services
Domestic
Trucking (full trailer and less than trailer loads)
Shipping stocks are collapsing as rates and demand for most industry segments continue to rise. Recession fears are growing almost as much as new job listings. Inflation is spiraling while trucking rates collapse. China decides to print more money as the US Federal Reserve raises rates. The US Navy watches mines proliferate in the Black Sea and does nothing.
Cargo is no longer king, confusion is.
All of this reminds me of the Bill Murray quote from Ghostbusters “Human sacrifice! Dogs and cats living together! Mass hysteria!” From US Navy’s new apathy towards protecting commercial shipping to President Biden’s threat to punish foreign shipowners.
Boomers are making nearly every problem in transportation and logistics worse.
While that’s an accurate statement it’s a bit misleading and unfair. A more accurate statement would be that the baby boomer generation is not only the largest generation but also the best trained and educated. This generation built the most complicated but successful system of international trade the world has ever seen. The problem is now they are retiring en masse resulting in major skill shortages throughout the maritime world.
It’s their exodus that’s causing the most problems.
Can Generation X Save Shipping
This is especially bad for shipping because the boom and bust cycles of shipping created huge gaps in employment. Generation X is now taking over the most skilled jobs in the maritime workforce but my generation will fail for two big (and lots of small) reasons. First, X is much smaller generation than the boomers. Second, X entered the workforce in the 1990s which was a terrible decade for shipping.
Anecdotally I’m at the tail end of GenX and my class of 2000 at NY Maritime College graduated less than 100 students. Today over 1,500 students are enrolled at the school. I was one of only a handful of classmates who found work as an officer aboard ships while many classmates left the industry altogether. Today many companies are desperate to hire young officers.
Some nations in Europe and Asia did slightly better at supporting maritime jobs throughout the 1990’s but many of those nations are facing an outright demographic collapse. And which nations are demographically collapsing the fastest? Maritime nations.
Global Demographics
“The truly terminal demographies of Germany, Italy, Japan, Korea, and China are looking at least a 4 percent reduction of GDP annually,” says Peter Zeihan, author of The End Of The World Is Just The Beginning. “China is the worst off… its labor force peaked in the 2010s. In the best-case scenario, the Chinese population in the year 2070 will be less than half what it was in 2020.”
China’s growth has been a major contributor to the shipping industry’s growth this century. Many believe that China grew so fast because it wanted to become the next superpower but Zeihan suggests it was because they had to. Peak Boomer was their last opportunity to build out infrastructure for a declining, not growing, future. If they had spread their investments over a longer time horizon they would not have the workforce available to build the infrastructure party officials believe they need for the coming decades.
Zeihan also says that Russia invaded Ukraine now for the same reason. If Russia had delayed invasion plans any further they would simply not have the population needed to support the war effort.
Port congestion and the boomer exodus
“Anyone believing port congestion is improving might want to read up on the operational updated provided by Hapag Lloyd on Friday,” said shipping expert Lars Jensen in a LinkedIn post early this week. “There is typically a lot of attention on North America when discussing this, hence below are excerpts of a few examples related to Europe, Asia and Latin America instead.”
Ningbo: Most terminals are under severe yard and berth congestion. The port might be affected by strong wind / monsoon, which might cause port closure and lower vessel productivity.
Yantian: Due to strict COVID-19 controlling and preventing measures, vessel productivity has decreased with longer port stays.
Shekou: Pilot availability is limited and pilot service might not be available at time requested due to COVID restrictions.
Hong Kong: Reefer facilities and resources at HKSPA is limited and utilization is on high level. Vessel berthing will be prioritized for pure loading vessels or vessels with loading volume more than discharge volume
Singapore: Priority is given to export calls to relieve the yard density which is around 80%.
Antwerp: upcoming holiday season will lead to reduced labour availability.
Rotterdam: With the start of the holiday season, the first labour related impacts are visible with less gangs being deployed. In addition, several COVID infections have been reported within the workforce. Yard level at DDE has risen again to 85% with special concern about open 40’ positions. Reefers at DDE are at 100% of the plug utilization. ECT and RWG stopped to accept empty containers this week.
Hamburg (CTA): The ongoing tariff negotiations are having a negative impact on labour availability. Due to the strike the waiting time of import heavy vessels has increased again.
Hamburg (CTB): Last week’s strike and the ongoing labour dispute with the union are increasing the delays accumulated at CTB even further. Slight rise in COVID infections reported at the work force negatively impacting the already tense labour situation. Extreme waiting time for vessels.
Le Havre: High amount of vessel activity in the port of Le Havre is leading to labour shortage.
Benelux: Summer holiday season is arriving, and most vendors already announced less trucking capacity with approximately 50% of usual transport capacity.
Ecuador: Due to ongoing nationwide protests, export shipments are being affected as their containers are not arriving at established CY cut off. Import shipments also delayed due roadblocks in interstate roadways.
Costa Rica: a cyber-attack to Government Customs System took place since week 17 and many tasks are manually performed. This causes delays at gates for in/out cargo. Route 32 in Costa Rica is closed again due to landslides
Mexico: trucking services delayed due to port congestion at several locations.
While Lars does not describe the reason for all these port problems, it’s clear just from reading them that both skilled and expert labor is in short supply.
Can Millennials Save Shipping?
Some who study the labor market hope that Millennials, with the help of online training and AI, can step in to provide the skill gap that retiring boomers are creating but there are a few problems with this theory. First, the average millennial is less interested in industrial operations like shipping and is more attracted to digital jobs they can do from home. Second, unlike America, many maritime countries don’t have large millennial populations. Third, rapidly escalating higher school costs have resulted in a less-educated workforce.
Could rapidly increasing wages retain Boomers?
Many boomers are already working beyond their planned retirement date and, in the well-paid maritime industry, have the wealth they need to retire. While many enjoy their job the pressure on performance is increasing exponentially alongside supply-chain chaos and Covid caused most boomers to rethink work-life balance.
Those that remain are not interested in new and emerging problems like port congestion but want to work on big “legacy-leaving” problems like climate change. This is resulting in the boomers who are staying put focusing on what boomers do best, using their high degree of education and expertise to create MORE complicated solutions (Wind Farms and Digitalized Fueled Decarbonation require a MORE skilled workforce) to global problems.
Complicated and human resources intensive solutions that are setting Generation X up to fail.
Green Revolution Is Important But Complicated
“It’s hard to justify spending so much time on an advanced LNG regasification facility for cruise ships when the world is facing an energy crisis and famine,” said one industry executive. “What the world is asking for right now is big and simple coal and grain bulkers not complicated green hydrogen distribution systems.”
The recent conferences I have attended make this point clear. Nearly every session (and most of the “hallway chatter”) included questions about decarbonization and digitalization but only a few about Russian mines and world hunger.
“Today’s shipping conferences give me the same feeling as visiting the old Worlds Fair buildings in Queens or reading a vintage copy of Popular Mechanics,” said one GenX classmate of mine. “It’s yesterday’s vision for the future. I hate to say it but green hydrogen and next-gen wind farms feels a lot like the flying cars my parents promised that I’d own ‘once I grew up’. I’m told my generation is cynical but I think we are just more focused on simple solutions.”
“Boomers are focused on getting what they want, while my generation wants to focus on what we currently need.”
Follow The Money And Power
Inter-generation strife is likely to increase as those baby boomers who do stick around will retain control over purse strings and board seats (we have already seen that Boomers vote and are unwilling to give up political control of government spending). Their goals may place more complexity and problems on already overburdened Generation X managers. That said Generation X will be well compensated for the added stress. Adding more complexity and stress to the system will accelerate the rate of retirement and the competition for Generation X’s talent is about to go into overdrive.
GenX’s Moment To Shine
“Generation X will benefit the most,” says Peter Zeihan. “Demand for skilled labor will accelerate alongside the massive shortage of skilled talent. This is Generation X’s moment to shine.”
If Zeihan is correct then the exodus of Boomers will lead to fierce competition among employers and Generation X salaries will climb faster than 2021 freight rates. And the smartest maritime companies have already started massive retention and hiring programs for Generation X.
How much the Millennials will benefit is anyones guess. They could catch some of the overflow that’s about to pour into the pockets of GenX or the entire system could collapse just when their moment to shine finally arrives.
The Future Is Foggy
The big question that remains is what are we missing? What are the second and third-order consequences of generational differences? One trend, for example, is for maritime and logistics companies to hire naval officers (this trend seems especially strong for US and Israel Navy officers in technology startups) over merchant mariners because most senior officers have advanced degrees the government paid for while many Millennial in the civilian shipping industry did not want the burden of student loans. Some civilians who did take out loans to fund higher education left the industry for more lucrative opportunities in finance, entertainment, or technology. The result is a more educated and experienced workforce on paper, but in practice, there is an experience gap because naval officers don’t have experience managing working ships. This is just one small example.
A bigger example is the Japanese stock market. Their largest generation peaked in the 1990’s and the financial consequences have lasted decades.
Will, there be more consequences as a result of the generational turnover? Certainly but the problem with managing the brilliant and effective but complicated interconnected and human resource-dependent systems baby boomers have created is the chaos they could create is difficult to predict.
And if Generation X does solve problems by returning us to simpler systems… what will that mean for the green revolution and the environment it hopes to protect?
Source: gcaptain.com
Momentum
Shipping is a full service, international freight forwarder, offering the
following services:
Ocean
Freight
Air
Freight
Import
and Export Services
Domestic
Trucking (full trailer and less than trailer loads)
There is a stretch of coastline in southern Cornwall known for its dragons. The black ones are rare, the green ones rarer; even a dedicated dragon hunter can go a lifetime without coming across a single one. Unlike the dragons of European myth, these do not hoard treasure, cannot breathe fire, and, lacking wings, cannot fly. They are aquatic, in that they always arrive from the sea, and they are capable of travelling considerable distances. One was spotted, like Saoirse Ronan, on Chesil Beach; another made its home on the otherwise uninhabited Dutch island of Griend, in the Wadden Sea. Mostly, though, they are drawn to the windswept beaches of southwestern England—to Portwrinkle and Perranporth, to Bigbury Bay and Gunwalloe. If you want to go looking for these dragons yourself, it will help to know that they are three inches long, missing their arms and tails, and made by the Lego company.
Cornwall owes its dragon population to the Tokio Express, a container ship that sailed from Rotterdam for North America in February of 1997 and ran into foul weather twenty miles off Land’s End. In heavy seas, it rolled so far abeam that sixty-two of the containers it was carrying wrenched free of their fastenings and fell overboard. One of those containers was filled with Lego pieces—to be specific, 4,756,940 of them. Among those were the dragons (33,427 black ones, 514 green), but, as fate would have it, many of the other pieces were ocean-themed. When the container slid off the ship, into the drink went vast quantities of miniature scuba tanks, spearguns, diving flippers, octopuses, ship’s rigging, submarine parts, sharks, portholes, life rafts, and the bits of underwater seascapes known among Lego aficionados as lurps and burps—Little Ugly Rock Pieces and Big Ugly Rock Pieces, of which 7,200 and 11,520, respectively, were aboard the Tokio Express. Not long afterward, helicopter pilots reported looking down at the surface of the Celtic Sea and seeing “a slick of Lego.” (As with “fish,” “sheep,” and “offspring,” the most widely accepted plural of “Lego” is Lego.) Soon enough, some of the pieces lost overboard started washing ashore, mostly on Cornish beaches.
Things have been tumbling off boats into the ocean for as long as humans have been a seafaring species, which is to say, at least ten thousand and possibly more than a hundred thousand years. But the specific kind of tumbling off a boat that befell the nearly five million Lego pieces of the Tokio Express is part of a much more recent phenomenon, dating only to about the nineteen-fifties and known in the shipping industry as “container loss.” Technically, the term refers to containers that do not make it to their destination for whatever reason: stolen in port, burned up in a shipboard fire, seized by pirates, blown up in an act of war. But the most common way for a container to get lost is by ending up in the ocean, generally by falling off a ship but occasionally by going down with one when it sinks.
There are many reasons for this kind of container loss, but the most straightforward one is numerical. In today’s world, some six thousand container ships are out on the ocean at any given moment. The largest of these can carry more than twenty thousand shipping containers per voyage; collectively, they transport a quarter of a billion containers around the globe every year. Given the sheer scale of those numbers, plus the factors that have always bedevilled maritime travel—squalls, swells, hurricanes, rogue waves, shallow reefs, equipment failure, human error, the corrosive effects of salt water and wind—some of those containers are bound to end up in the water. The question, of interest to the inquisitive and important for economic and environmental reasons, is: What on earth is inside them?
Astandard shipping container is made of steel, eight feet wide, eight and a half feet tall, and either twenty or forty feet long; it could be described as a glorified box, if there were anywhere for the glory to get in. And yet for one of the world’s least prepossessing objects it has developed something of a cult following in recent years. A surprising number of people now live in shipping containers, some of them because they have no other housing option and some of them because they have opted into the Tiny House movement, but a few in the name of architectural experiments involving several-thousand-foot homes constructed from multiple containers. Others, preferring their shipping containers in the wild, have become passionate container spotters, deducing the provenance of each one based on its color, logo, decals, and other details, as delineated in resources like “The Container Guide,” by Craig Cannon and Tim Hwang, the John James Audubons of shipping containers. Other volumes on the increasingly crowded container-ship shelf range from Craig Martin’s eponymous “Shipping Container,” which forms part of Bloomsbury Academic’s Object Lessons series and cites the likes of the French philosopher Bruno Latour and the American artist Donald Judd, to “Ninety Percent of Everything,” whose author, Rose George, spent five weeks on a container ship, bringing to life not only the inner workings of the shipping industry but also the daily existence of the people charged with transporting the world’s goods across dangerous and largely lawless oceans.
Viewed in a certain light, all this attention makes sense because, during the past half century or so, the shipping container has radically reshaped the global economy and the everyday lives of almost everyone on the planet. The tale of that transformation was recounted a decade and a half ago by Marc Levinson in “The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger.” Before the rise of the container, moving cargo over water was an expensive, labor-intensive business. To minimize the distance between products and the vessels that transported them, ports were crowded with factories and warehouses, as well as with the stevedores and longshoremen tasked with loading and unloading goods. (The distinction was spatial: stevedores worked on the ship, while longshoremen worked on the dock.) Some of those goods were bulk cargo—a commodity like oil, which can be poured into a tank for relatively easy storage and transport—but most of them were “break-bulk” cargo, which had to be loaded item by item: bagged cement, wheels of cheese, bales of cotton, you name it. All this unrelated stuff had to be packed together carefully, so that it wouldn’t shift in transit, breaking valuable items or, worse, capsizing the ship. For the workers, the labor involved required skill, brawn, and a high tolerance for pain. (In Manchester, in a single year, half of all longshoremen were injured on the job.) For the shipping companies, it required money. Between wages and equipment, up to seventy-five per cent of the cost of transporting goods by water was incurred while a ship was in port.
All of this changed in 1956, because of a man named Malcom McLean. He was not originally a shipping magnate; he was the ambitious owner of a trucking company who figured he would be able to outbid his competitors if he could sometimes transport goods by waterway rather than by highway. When his initial idea of simply driving his trucks onto cargo ships proved economically inefficient, he began tinkering with removable boxes that could be stacked atop one another, as well as easily swapped among trucks, trains, and ships. In pursuit of that vision, he bought and retrofitted a couple of Second World War tankers, and then recruited an engineer who had already been working on aluminum containers that could be lifted by crane from truck to ship. On April 26, 1956, one of the tankers, the SS Ideal-X, sailed from New Jersey to Texas carrying fifty-eight shipping containers. On hand to witness the event was a higher-up in the International Longshoremen’s Association who, when asked what he thought of the ship, supposedly replied, “I’d like to sink that son of a bitch.”
That longshoreman clearly understood what he was seeing: the end of the shipping industry as he and generations of dockworkers before him knew it. At the time the Ideal-X left port, it cost an average of $5.83 per ton to load a cargo ship. With the advent of the shipping container, that price dropped to an estimated sixteen cents—and cargo-related employment plummeted along with it. These days, a computer does the work of figuring out how to pack a ship, and a trolley-and-crane system removes an inbound container and replaces it with an outbound one roughly every ninety seconds, unloading and reloading the ship almost simultaneously. The resulting cost savings have made overseas shipping astonishingly cheap. To borrow Levinson’s example, you can get a twenty-five-ton container of coffeemakers from a factory in Malaysia to a warehouse in Ohio for less than the cost of one business-class plane ticket. “Transportation has become so efficient,” he writes, “that for many purposes, freight costs do not much affect economic decisions.”
In another sense, those costs, in their very insignificance, do affect economic decisions. They are the reason that manufacturers can circumvent wage, workplace, and environmental protections by moving their plants elsewhere, and the reason that all those elsewheres—small cities far from ports, in Vietnam or Thailand or the Chinese hinterlands—can use their cheap land and cheap labor to gain a foothold in the global economy. Thanks to McLean’s innovation, manufacturers can drastically lengthen the supply chain yet still come out on top financially. If you have ever wondered why a shirt you buy in Manhattan costs so much less if it came from a factory in Malacca than from a tailor in midtown, the answer, in large part, is the shipping container.
Like the plastic dragons of Cornwall, a fully loaded container ship looks like something that might have been made by the Lego company. The effect comes from the fact that the containers are painted a single solid color—blue, green, red, orange, pink, yellow, aquamarine—and resemble standard Lego building blocks, especially when stacked atop one another. Those stacks begin down in the hold, and aboveboard they can run as wide as twenty-three abreast and loom as tall as a ten-story building.
The vessels that carry those stacks start at a size that you and I might regard as large—say, four hundred feet from bow to stern, or roughly the length of a baseball field from home plate to the center-field wall—but that the shipping industry describes as a Small Feeder. Then things scale up, from a regular Feeder, a Feedermax, and a Panamax (nine hundred and sixty-five feet, the maximum that could fit through the Panama Canal before recent expansion projects there) all the way to the aptly named Ultra Large Container Vessel, which is about thirteen hundred feet long. Tipped on one end and plunked down on Forty-second Street, a U.L.C.V. would tower over the Chrysler Building. In its normal orientation, as the whole world recently learned to its fascination and dismay, it can block the Suez Canal.
The crews of these ultra-large ships are, by comparison, ultra-tiny; a U.L.C.V. can travel from Hong Kong to California carrying twenty-three thousand containers and just twenty-five people. As a result, it is not unheard-of for a few of those containers to go overboard without anyone even noticing until the vessel arrives in port. (That’s despite the fact that a fully loaded container is roughly the size and weight of a whale shark; imagine the splash when it falls a hundred feet into the ocean.) More often, though, many containers shift and fall together in a dramatic occurrence known as a stack collapse. If fifty or more containers go overboard in a single such incident, the shipping industry deems the episode a “catastrophic event.”
How often any of this happens is a matter of some debate, since shipping companies are typically under no obligation to publicize the matter when their cargo winds up in the ocean. In such instances, the entity that paid to ship the goods is notified, as is the entity that’s meant to receive them. But whether any higher authority learns about the loss largely depends on where it happened, since the ocean is a patchwork of jurisdictions governed by various nations, bodies, and treaties, each of them with different signatories in different states of enforcement. The International Maritime Organization, which is the United Nations agency responsible for setting global shipping standards, has agreed to create a mandatory reporting system and a centralized database of container losses, but that plan has not yet been implemented. In the meantime, the only available data come from the World Shipping Council, a trade organization with twenty-two member companies that control some eighty per cent of global container-ship capacity. Since 2011, the W.S.C. has conducted a triennial survey of those members about container loss, and concluded, in 2020, that, on average, 1,382 containers go overboard each year.
It is reasonable to regard that number warily, since it comes from a voluntary survey conducted by insiders in an industry where all the incentives run in the direction of opacity and obfuscation. “No one reports fully transparent figures,” Gavin Spencer, the head of insurance at Parsyl, a company that focusses on risk management in the supply chain, told me. Insurance companies don’t like to report the individual losses they cover, because doing so would make them seem less profitable, and shipping lines don’t report them, either. (“That would be a bit like airlines declaring how many bags they lose.”) Spencer’s best guess concerning the actual number of containers lost in the ocean is “far more than you can imagine,” and certainly much more than the figures reported by the W.S.C.ADVERTISEMENT
The W.S.C. disputes the idea that its data are in any way inaccurate. But, whatever the number, container loss seems to be growing more common. In November of 2020, a ship called the one Apus, on its way from China to Long Beach, got caught in a storm in the Pacific and lost more than eighteen hundred containers overboard—more in one incident than the W.S.C.’s estimated average for a year. The same month, another ship headed to Long Beach from China lost a hundred containers in bad weather, while yet another ship capsized in port in East Java with a hundred and thirty-seven containers on board. Two months later, a fourth ship, also on its way from China to California, lost seven hundred and fifty containers in the North Pacific. The past few years have been characterized by a steady stream of reports about some other quantity of containers lost in some other patch of ocean: forty off the east coast of Australia; twenty-one off the coast of Hawaii; thirty-three off Duncansby Head, Scotland; two hundred and sixty off the coast of Japan; a hundred and five off the coast of British Columbia. On and on it goes, or, rather, off and off.
One reason incidents like these are on the rise is that storms and high winds, long the chief culprit in container loss, are growing both more frequent and more intense as the climate becomes more volatile. Another is the trend toward ever-larger container ships, which has compromised the steering of the vessel and the security of the containers (in both cases because the high stacks on deck catch the wind), while simultaneously rendering those ships vulnerable to parametric rolling, a rare phenomenon that places extreme stress on the containers and the systems meant to secure them. More recently, the steep rise in demand for goods during the covid era has meant that ships that once travelled at partial capacity now set off fully loaded and crews are pressured to adhere to strict timetables, even if doing so requires ignoring problems on board or sailing through storms instead of around them. To make matters worse, shipping containers themselves are in short supply, both because of the increase in demand and because many of them are stuck in the wrong ports owing to earlier shutdowns, and so older containers with aging locking mechanisms have remained in or been returned to circulation. In addition to all this, the risk of human error has gone up during the pandemic as working conditions on container ships, already suboptimal, have further declined—particularly as crew members, too, have sometimes been stuck for weeks or months on a ship in port or at anchor, stranded indefinitely in a worldwide maritime traffic jam.
People who work on oil tankers or aircraft carriers or commercial fishing boats know what they are transporting, but, as a rule, those who work on container ships have no idea what’s in all the boxes that surround them. Nor, for the most part, do customs agents and security officials. A single shipping container can hold five thousand individual boxes, a single ship can offload nine thousand containers within hours, and the largest ports can process as many as a hundred thousand containers every day, all of which means it is essentially impossible to inspect more than a fraction of the world’s shipping containers—a boon to drug cartels, human traffickers, and terrorists, a nightmare for the rest of us.
It is true, of course, that some people do know the contents (or at least the declared contents) of any given shipping container transported by a legal vessel. Each of those containers has a bill of lading—an itemized list of what it is carrying, known to the shipowner, the sender, and the receiver. If any of those containers go overboard, at least two additional parties swiftly learn what was inside them: insurance agents and lawyers. If many of those containers go overboard, the whole incident can become the subject of what’s known as a general average adjustment—an arcane bit of maritime law according to which everyone with cargo aboard a ship that suffers a disaster must help pay for all related expenses, even if the individual’s cargo is intact. (This illogical-seeming arrangement was codified as early as 533 A.D., of logical necessity: if sailors had to jettison cargo from a vessel in distress, they couldn’t afford to waste time selecting the stuff that would cost them the fewest headaches and the least money.) In theory, if you were sufficiently curious and dogged, you could request the court filings for container losses that result in such legal action, then pore over them for information about the contents of the lost containers.
If there are wonderfully obsessive souls who have dedicated their lives to pursuing this kind of information and making it broadly available, I have yet to find them. As a rule, if the public learns about the contents of lost containers at all, it is only in a haphazard fashion—as when those contents make headlines. Back in January, for instance, a ship sailing from Singapore to New York lost sixty-five containers overboard, triggering a wave of news coverage and a bunch of recipe-for-disaster jokes, since the ship had been carrying tens of thousands of copies of two freshly printed cookbooks: Melissa Clark’s “Dinner in One” and Mason Hereford’s “Turkey and the Wolf.”
More often, though, the contents of lost containers become obvious only if they start washing ashore, where they attract the attention of residents and beachcombers, as well as that of regional authorities and environmental organizations, which together often end up funding and coördinating cleanup efforts. The Cornwall dragons, for example, are famous in large part because of a local beachcomber, Tracey Williams, who began tracking them and other ocean-borne Lego pieces on dedicated social media accounts, which proved so popular that she has produced a book on the subject: “Adrift: The Curious Tale of the Lego Lost at Sea,” a charming if desultory stroll through the history and aftermath of the Tokio Express accident. Similarly, when those hundred and five containers were lost off the coast of British Columbia last fall, local volunteers quickly surmised some of the contents, since they found themselves ridding the region’s beaches of baby oil, cologne, Yeti coolers, urinal mats, and inflatable unicorns.
What else has started off on a container ship and wound up in the ocean? Among many, many other things: flat-screen TVs, fireworks, ikea furniture, French perfume, gym mats, BMW motorbikes, hockey gloves, printer cartridges, lithium batteries, toilet seats, Christmas decorations, barrels of arsenic, bottled water, cannisters that explode to inflate air bags, an entire container’s worth of rice cakes, thousands of cans of chow mein, half a million cans of beer, cigarette lighters, fire extinguishers, liquid ethanol, packets of figs, sacks of chia seeds, knee pads, duvets, the complete household possessions of people moving overseas, flyswatters printed with the logos of college and professional sports teams, decorative grasses on their way to florists in New Zealand, My Little Pony toys, Garfield telephones, surgical masks, bar stools, pet accessories, and gazebos.
Every once in while, some of this lost cargo proves beneficial to science. In 1990, when a container ship headed from Korea to the United States lost tens of thousands of Nike athletic shoes overboard, each one bearing a serial number, an oceanographer, Curtis Ebbesmeyer, asked beachcombers all over the world to report any that washed ashore. (Alongside the former BBC journalist Mario Cacciottolo, Ebbesmeyer collaborated with Tracey Williams on “Adrift.”) As it turns out, Nikes tolerate salt water well and will float pretty much until they run out of ocean—although, since the two shoes in a pair orient differently in the wind, one beach might be strewn with right sneakers while another is covered in left ones. Ebbesmeyer used the reported location of the shoes to pioneer a field that he calls “flotsametrics”: the study of ocean currents based on the drift patterns of objects that go overboard. In the past three decades, he has studied everything from the Lego incident to a 1992 container loss involving almost twenty-nine thousand plastic bath toys sold under the name Friendly Floatees, from classic yellow duckies to green frogs, one of which took twenty-six years to wash ashore.
As important as the study of ocean currents may be, it is slim recompense for all those containers going overboard—as Ebbesmeyer well knows, since he helped give the Great Pacific Garbage Patch its name. Shipping-industry insiders like to point out that the problem of container loss is a comparatively small one, by which they mean that the number of containers that end up in the ocean is a tiny fraction of the total shipped. That percentage may be useful as a business metric, but it is irrelevant to manatees and crabs and petrels and coral, not to mention all the rest of us who—like it or not, know it or not—are affected by the accumulation of containers and their contents in the ocean.
If those contents include any goods that the International Maritime Organization defines as dangerous (among them, explosives, radioactive substances, toxic gases, asbestos, and things prone to spontaneous combustion), the carrier is obliged to report the incident to the relevant authority. That’s a useful but limited requirement, partly because once the carrier has done so it often has no further responsibilities and partly because a great many items that don’t meet this definition are nonetheless destructive to marine and coastal environments. The Tokio Express might not have been the Exxon Valdez, but five million pieces of plastic are hardly a welcome addition to the ocean. Nor are flyswatters or bottles of detergent or Christmas decorations, to say nothing of their packaging—most of it plastic or, worse still, Styrofoam, which, when buffeted by waves, breaks into pebble-size pieces that are extremely hard to clean up and look, to certain birds and aquatic animals, enticingly edible.
For an object that is fundamentally a box, designed to keep things inside it, the shipping container is a remarkable lesson in the uncontainable nature of modern life—the way our choices, like our goods, ramify around the world. The only thing those flat-screen TVs and Garfield telephones and all the other wildly variable contents of lost shipping containers have in common is that, collectively, they make plain the scale of our excess consumption. The real catastrophe is the vast glut of goods we manufacture and ship and purchase and throw away, but even the small fraction of those goods that go missing makes the consequences apparent. Six weeks after the Tokio Express got into trouble at Land’s End, another container ship ran aground sixteen nautical miles away, sending dozens of containers into the sea just off the coast of the Isles of Scilly. Afterward, among the shells and pebbles and dragons, residents and beachcombers kept coming across some of the cargo: a million plastic bags, headed for a supermarket chain in Ireland, bearing the words “Help protect the environment.” ♦
Source: newyorker.com
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As of today (April 15), the world’s third largest shipping line, will no longer accept deliveries of scrap plastic on any of its ships. CMA CGM’s ban is a milestone in a global backlash against wealthy nations—especially the US—dumping plastic waste in China and Southeast Asia.
China used to be the biggest destination for scrap plastic; in 1992, the country imported 72% of all plastic waste, which it would recycle and use in manufacturing. But as China’s economy has grown, so has its domestic plastic waste output. Now the country has plenty of its own plastic to recycle, without accepting imports from abroad.
China began limiting plastic imports in 2017 through a policy initiative dubbed Operation National Sword. Western countries scrambled to divert their plastic exports to southeast Asian nations like Malaysia and Indonesia, but these countries also banned or limited plastic imports in 2019. As a result of these import restrictions, US plastic scrap exports have fallen more than 70%.
Shipping lines ditch plastic scrap shipments
As China and its neighbors began limiting plastic imports, shipping lines became wary of accepting scrap plastic cargo. Receiving countries might refuse to accept the scrap plastic, forcing shipping lines to dump the cargo or carry it back where it came from. “Because of this increased risk, it no longer makes economic sense for shipping lines to keep carrying plastic,” said Aditya Vedantam, an assistant professor of management at the University of Buffalo, who studied the impact of Operation National Sword on US recycling.
Most of the world’s largest shipping lines—Maersk, MSC, and Hapag-Lloyd—stopped taking plastic shipments to China in 2020. CMA CGM, a French shipping line, is going a step further by rejecting plastic shipments anywhere on earth. That leaves few companies willing to ship plastic waste, and even fewer countries that accept it in bulk. Turkey, Canada, Vietnam, and Thailand are now among the biggest waste importers but impose their own restrictions.
The US needs to scale up domestic recycling
Now that recycling hubs and shipping lines have started banning plastic imports, countries like the US will have to figure out how to take care of their own plastic waste.
The EU has embraced “extended producer responsibility” regulations, which force companies that produce plastic products and packaging to pay for their recycling or disposal. The EU has also created regulations to limit how much plastic packaging companies can use and require companies to use recycled plastics.
But the US lags behind on regulating plastic and building the facilities needed to recycle it. The country began dumping 23% more plastic into landfills after Operation National Sword went into effect in 2017. State and local governments are just starting to pass laws emulating EU regulations, but only in a few jurisdictions. Yet the recent ban may create a robust domestic industry for the waste.
“Because we’ve taken advantage historically of this ability to export our scrap overseas, we haven’t invested in domestic source reduction or increased recycling infrastructure,” said Anja Brandon, a plastics policy analyst at the Ocean Conservancy. “As hard as this is, all these efforts by other countries and by the shipping industry [to block plastic exports] are really helping create incentives for us to make a waste management system that works.”
Source: qz.com
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The blaze on the 6,400 ceu Felicity Ace off the coast of Portugal’s Azores islands is finally easing.
The Panama-flagged ship caught fire last Wednesday while on its way from Emden, Germany to Rhode Island, US.
Two large tugs with firefighting equipment arrived on site yesterday and are spraying water onto the ship together with the patrol boat with the initial salvage team already onsite to cool down the heat from the vessel.
An additional salvage craft with firefighting equipment is set to arrive from Rotterdam on Saturday.
“The fire has subsided in recent hours,” João Mendes Cabeças, captain of the nearest port in the Azorean island of Faial, told Lusa news agency last night, saying there was probably little combustible material left to burn.
UK risk consultancy Russell Group said the ship has 3,965 cars onboard including brands such as Volkswagen, Porsche, Audi, Bentley and Lamborghini.
The total dollar value of goods on the ship is estimated to be $438m, according to Russell.
Cargo claims specialist WK Webster suggested that the fire has spread throughout the entire length of the vessel and it appears that everything above the waterline has been burnt, although vehicles stowed below the waterline will likely also be affected by burning debris from upper decks and fire-fighting water.
The vessel, which switched to the Britannia P&I Club for its insurance at the start of the year, is reported to be stable, in a position approximately 90 nautical miles south of Horta in the Azores, but has developed a slight list.
Source: splash247.com
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The 22 crew members of the car carrier Felicity Ace have been rescued after the ship caught fire Wednesday near the Azores in the Atlantic Ocean.
The 17-year-old ship, owned by Mitsui OSK Lines and sailing under the Panama flag, was en route to the Port of Davisville in Rhode Island. It had departed from Emden, Germany, on Feb. 10. It was about 90 nautical miles southwest of the island of Faial in the Azores.
The Portuguese navy and several merchant marine ships were involved in the rescue. The crew was transported to the Resilient Warrior, a tanker ship operated by Polembros Shipping.
The ship caught fire in the cargo hold, according to a statement from the navy.
Media outlets reported that the ship was carrying a heavy load of Porsches and Volkswagen vehicles. It can carry a maximize amount of 4,000 cars.
Automotive news outlet The Drive said it received a statement from Porsche that read: “Our immediate thoughts are of the 22 crew of the merchant ship ‘Felicity Ace,’ all of whom we understand are safe and well as a result of their rescue by the Portuguese Navy following reports of a fire on board. …
“We believe a number of our cars are among the cargo on board the ship. No further details of the specific cars affected are available at this time – we are in close contact with the shipping company and will share more information in due course.”
Source: freightwaves.com
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All eyes were on the Ever Given when it got stuck in the Suez Canal, but it’s not the only too-big boat for too-small ports—a problem for holiday deliveries.
RIGHT NOW, AROUND 57 container ships are lingering outside the Port of Los Angeles—the largest port in the US—desperate to unload their cargo and move on. As the delays stretch on for weeks, the country’s midsized ports are racing to remind any impatient boats that LA isn’t the only game in town.
Last month, Texas governor Greg Abbott took to Twitter to debut an “Escape California” campaign aimed at large ocean freight companies. “Are your products stuck off Long Beach?” asks a cheery ad that Abbott posted. “Texas ports are wide open.” The Port of Oakland put out a press release in October insisting that “its marine terminals are congestion-free” and that it was “ready for more business,” and the Port of Jacksonville is offering cost savings and reminding companies that it is within a one-day drive “of nearly 100 million consumers.”
In theory, big freight companies should be eager to try out these contingency plans. The wait times outside Los Angeles are directly impacting what’s available on store shelves in the US. Shortages of tires and toys, announcements from brands like Hasbro that they have $100 million in unfilled orders, even the increasing costs of some consumer goods—all can be traced, in part, to the traffic jam at major ports.
But abandoning Los Angeles and Long Beach isn’t so simple. While smaller ports up and down the West Coast have received an influx of phone calls from ocean freight companies hoping to find new ports of entry, few carriers are actually making the switch. That’s because of how much US shipping has come to depend on its few major ports. In 1991, according to the American Association of Port Authorities, the top three ports—Long Beach, Los Angeles, and New York/New Jersey—accounted for roughly a third of US container traffic. In 2018, their share shot up to half. Last year, the pandemic accelerated those trends. As the first supply chain crunch unfolded, the top three ports grew even more.
“The downside to having one large import location for your country or region is that you’re reducing the points of failure that you can handle,” said Erik Oak, a supply chain research analyst at S&P Global. In the US, Long Beach and Los Angeles—which together accounted for almost a third of all US imports last year—“are almost singular points of failure at this point.”
And it’s also, unfortunately, a question of size. Over the past two decades, international shipping has relied more and more on extremely big ships—and now a lot of those boats just won’t fit anywhere else.
THE STORY OF the container shipping industry over the past half-century is a story of cascading consolidation. A shrinking pool of ocean freight carriers, with names like Maersk and Evergreen, operate the vast majority of container ships. The top 10 carriers are currently responsible for about 85 percent of all world container shipping capacity.
These companies have, in turn, adopted a relatively uncomplicated growth strategy: to make more money, build bigger boats. The Ever Given, the notorious “big boat” that got stuck in the Suez Canal earlier this year, is larger than the Empire State Building—and it no longer looks out of place on the high seas. The average container ship nearly doubled in size between 1996 and 2015. While ships that carried between 10,000 and 15,000 containers didn’t exist at the turn of the century, by 2020 they accounted for 17.5 percent of arrivals on the West Coast.
Container ships have gotten so big so quickly that many ports can’t really accommodate these giant boats, creating a backlog that directly explains why your holiday gifts are arriving late. Plus, small and midsized ports risk getting sized out entirely. A recent paper found that 436 world ports (out of a total of nearly 3,000) rely on vessels with a capacity of under 1,000 containers. But container ships of that size are disappearing, and a fifth of those ports might be unable to accept bigger ships at all.
For now, only a small number of ports risk exiting the container business entirely because of supersized ships. The ports in Texas, Jacksonville, and Oakland that are pitching themselves to ocean freight carriers right now are all big enough to avoid that fate. But as big container ships proliferate, so will the strain they cause on ports below the top tier—making the largest ports the most attractive places to dock. While the mammoth ports at Long Beach and New York/New Jersey saw import volumes increase about 8 percent each last year, midsized ports in New Orleans and Jacksonville witnessed double-digit declines.
ULTIMATELY, THE MAJOR issue for the supply chain in 2021 is a size problem of a different sort: Demand for products is way up across the board, and shipping companies haven’t recovered from other pandemic-related bottlenecks. But our reliance on such a small cluster of major ports means there are few backstops in a crisis like this.
To some extent, these are uniquely American problems. When very big boats arrive at ports in other countries, local authorities tend to unload their containers in pieces and spread them to smaller ports throughout the region. That way, the containers aren’t all coming ashore at once. As the Journal of Commercenoted, major ports in Europe and Asia do this far more often than US ports. In the US, instead, the megaships dock at a single port with all tens of thousands of containers in tow.
To create enough space to welcome this ballooning number of megaships, some ports have responded with extensive ocean-dredging projects. But it isn’t cheap. Jacksonville is spending $484 million to deepen its channel. Houston’s dredging project will cost closer to $1 billion.
Yet even the occasional dredging project might not be enough. “You can do things like dredge channels, you can expand your footprint, but not every port is necessarily going to be able to accommodate that,” Oak said. He pointed to physical limitations on how much can be dredged, as well as uncertainty over whether local governments will support a costly and potentially environmentally damaging project. “It is very possible that some smaller ports are just not able to accommodate the larger vessels ever, just because of the natural landscape around them.”
Even those ports that do dredge enough to accept the new megaships might not have the infrastructure to support unloading all of those containers. Ports rely on extensive networks of warehouses, rail lines, and trucking stops to funnel products from a container ship to, say, a retail store. Just because a port can accept a ship into its waters doesn’t mean it can dispatch those products to consumers quickly. The tiny port of Hueneme, California—known mainly for handling banana shipments—has seen imports double year over year thanks to its proximity to Los Angeles, but it has scrambled to find the basic equipment that will allow it to unload containers.
One way out might involve simply investing in smaller ships. Right now, the retailers successfully circumventing the worst of the supply chain crisis are the ones with the financial resources to charter their own, regular-sized container ships and dispatch them to less crowded midsized ports. Amazon, for instance, is sending ships to ports in Houston and Everett, Washington.
A return to smaller ship sizes could also reduce congestion even in normal times. Megaships are uniquely conducive to traffic jams. (Even before the pandemic, seven of the top 10 ports in the US reported that they were struggling with congestion.) Thanks to their growth, wait times at the top 25 US ports increased by an hour between 2018 and 2019.
In 2016, the Advisory Committee on Supply Chain Competitiveness—an entity within the Department of Commerce—weighed how to stop big boats from causing port delays. Many of their suggestions—including merging port terminals and encouraging more investment in port technology to speed up the offloading process—would certainly alleviate some of the problems we’ve seen compound in recent years.
But those patches will still allow the big-ship cycle to continue. Even if ports become more efficient, global shipping businesses will continue to leapfrog each other in size and ports will continue to play catch up. Until container ship sizes come back down to earth—or until US ports devise a decentralized system that will spread the cargo from megaships to regional ports—then the margin for error at the major ports will only tighten.
Source: wired.com
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A California longshoreman told describes what it’s been like to work the California ports during record backlog. They chose to remain anonymous due to their job, but their identity has been verified .
I’ve been working as a longshoreman at California’s San Pedro Bay Port Complex for close to 15 years, and the only thing I know for sure about the congestion here is that everyone is blaming someone else.
The shipping companies blame us for not covering skilled-labor jobs, but they’re the ones that approve training for those types of jobs. Then we turn around and blame COVID-19 for the influx of online orders. Consumers see the ships backed up and say we’re not unloading fast enough. Truckers complain about the lack of chassis at the port, which limits the number of containers that can be carried out of the yard. It’s a total blame game.
But the blame game has to start somewhere, and this time, it started with backlogs at the port.
Right now, every single part of the supply chain is backed up – from the overseas shippers to the U.S. receivers – and there are no signs of it dying down anytime soon.
We’re like the Costco of ports
As a major gateway for trans-Pacific trade, everything you can imagine comes through here.
Longshoreman – or dock workers, as we are often referred to – work in commercial ports and harbors, unloading and loading cargo to and from vessels through either manual labor and by operating heavy machinery. It can be a physically demanding job most of the time, and by the end of the shift, it’s pretty normal to feel like you did the most intense workout of your life – even with an hour lunch break and two 30-minute breaks.
I’m what is referred to as an Identified Casual, meaning I get the work left over from the Regulars, who are the permanent full-time workers in the Union.
Since the pandemic, congestion at ports like mine is at an all-time high. Ships idling and anchored offshore can be seen for miles as they sit waiting for their turn to dock and have their cargo unloaded.
According to the Marine Exchange of Southern California, as of October 5, there were a total of 143 ships in port: 88 at anchor or drift areas and 55 at berths. The record at the time was 157 total ships, and that was set just last month.
Despite what it may look like, those crews aren’t exactly stranded out there in the water. There’s a ferry service that transports people back and forth from the docks, so they’re free to come on land and pick up food or supplies.
They can even go to Disneyland if they want. They might as well. There’s not much else for them to do. It’s a waiting game.
The craziest part is that despite all the logistical challenges and logjam, it’s not going to stop – and that’s because there’s still plenty of money to be made.
What we’re witnessing is a vicious cycle
Since the pandemic, more people have shopped online than ever before, increasing the number of shipments coming into our ports.
Retailers are encouraging consumers to shop early to ensure their gifts arrive in time for Christmas, causing a public frenzy and onslaught of online orders.
As long as manufacturers continue to pay warehouses to ship their products, it’s business as usual for them. The warehouses will then continue contracting with shipping companies to ship their containers out, and the ports won’t turn ships away because they make all their money in docking fees and unloading containers.
All of this has affected the delicate balance of the supply chain: Warehouses are bursting at the seams, shipping containers are in excess demand, chassis are running out, equipment is being run ragged, waterways and railways are overwhelmed, trucks and truckers are maxed out, and our yard and ports are overflowing as a result.
There’s also been a lot of talk about the port being closed on weekends, but it’s only closed to truckers on Saturdays and Sundays in an effort to manage traffic. The ports are open on weekends and we are here sorting, unloading, and loading cargo, but there’s not a lot of room in the yard because of the staggering amount of shipments we’re dealing with.
Those of us with our boots on the ground have zero say in what goes on around here. We just keep cranking away; we haven’t stopped.
Being a Casual means no two days are alike
As Casuals, we never know what our actual job is until we arrive for a shift and get assigned our tasks.
The work ranges from boring and repetitive, like driving a utility tractor rig around all day – known amongst the dock workers as the Shake and Bake, because the truck is shaky and has no air conditioning – to activities like lashing containers on the ships, which, while an extremely strenuous activity, makes the shift fly by. I’ll take that over monotonous work any day of the week.
The surge in cargo hasn’t affected our day-to-day as far as how we work, but there’s way more traffic in the yard now, and more containers are being stacked in places I’ve never seen them stacked before.
The last time I saw a backlog close to what we’re experiencing now was in 2015, when the International Longshore and Warehouse Union, which represents dock workers, and the Pacific Maritime Association, which represents all the shipping companies, were embroiled in lengthy contract negotiations, which resulted in work slowdowns and stoppages.
Some people assumed workers were striking, but the Pacific Maritime Association essentially choked us out by cutting our workload down. It was a soft lockout, and everyone was playing dirty.
Ships were backed up in the harbor while both entities struggled to work out their differences but it’s nothing compared to the number of ships out there now.
The agreement between International Longshore and Warehouse Union and the Pacific Maritime Association was set to expire in 2019, but both parties agreed to extend the expiration to July 1, 2022, so you’ve got to wonder how much of what’s going on here is a coincidence versus a matter of timing.
It would be catastrophic for the situation at the ports to get any worse – but it easily could
Before the backup, I worked four days a week, now I’m working between six and seven days a week.
In the past, there might have been 200 jobs available for Casuals during a shift. Now it’s often double or triple that amount. Whoever says people aren’t working because they’re sitting home on unemployment should come down here to the port to see for themselves.
The way I see it, we are all in this together. Every link in the supply chain needs to keep up their end of the bargain.
Instead of pointing fingers, we all need to lend a hand and get it done.
Source: businessinsider.com
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The ports of Los Angeles and Long Beach have expanded the hours during which trucks can pick up and return containers as part of their efforts to improve freight movement and reduce delays through the ports as they continue to experience record volumes.
The Port of Long Beach will maximise nighttime operations in what the port’s executive director Mario Cordero referred to as a first step toward a 24/7 supply chain. Port of Los Angeles executive director Gene Seroka announced that the Port of Los Angeles will expand weekend operating gate hours on a pilot basis to ensure that gate availability meets cargo demands. Both ports have called on marine terminal operators to incentivise the use of all available gate hours, especially night gates, to reduce congestion and maximize cargo throughput capacity.
The ports plan to work closely with the trucking community to ensure that all truck operators understand how to take advantage of incentivised gate hours as well as the expanded opportunities that will be created to move cargo during non-peak times.
The two San Pedro Bay ports are working closely with the White House Supply Chain Disruptions Task Force to alleviate bottlenecks and speed up the movement of goods to consumers, while also expanding opportunities for US exporters.
Source: splash247.com
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The “stratospheric” freight rates and shipping lines’ huge Q2 profits have been slammed by cargo owners, and a new report claims the carrier alliances are “suppressing” cargo.
According to a market review by MDS Transmodal and the Global Shippers Forum (GSF), container traffic grew 4% in Q2, up 22% year on year, returning close to pre-Covid levels of growth.
Carriers were “effectively full”, at 90% utilisation on most tradelanes, MDS said, noting capacity shares based on vessel-sharing agreements “in some key markets” exceeded 40%.
Mike Garratt, chairman of MDS Transmodal, said: “This high level of consolidation has the benefit of enabling lines to adjust capacity allocation in line with changing demand, but, combined with the resulting very high levels of utilisation, have allowed freight rates to remain at historically unprecedented levels and imply that some potential freight may be being suppressed.
Indeed, GSF director James Hookham said shippers faced a “meltdown” of the container shipping market – “rates in the stratosphere, slots up for auction and service performance in the trash”.
He added: “What none of the industry metrics show are the huge numbers of shipments not being moved – boxes left on the quay, stacked in the terminal or stockpiled in export warehouses awaiting a slot.”
The review adds that, amid carriers’ soaring profits, operating costs per container have “barely changed” over the past 18 months, with carriers “earning more than twice per container than at the start of the pandemic.”
However, while not specifically mentioning the MDS/GSF review, liner lobby group Shipping Australia claimed there had been a “massive surge” in the costs of operating a ship. It said: “Chartering costs have surged by up to 773% since late May 2020, and marine fuel costs have near tripled from US$155.50 a tonne in April 2020, to $435.50 a tonne.
“Do not be deceived by propaganda; the costs of operating a ship are high, and they are increasing.”
The lobby group said Covid had created a demand squeeze, where the supply of shipping capacity was adapting slowly compared to the massive increase in cargo.
“If demand spikes while supply adapts slowly, prices will inexorably rise. This is basic economics,” said Shipping Australia.
At the same time, it noted, shipping lines had increased the supply of vessels, with previously-idled fleet put back to work and “non-specialist multipurpose ships, and even capesize bulkers, hired to carry containers”. And “ocean shipping has invested in massive orders for new ships and new containers”, it added.
The group also laid much of the blame for the industry’s problems on container ports, claiming the extra supply was being wasted by terminal congestion and poor port performance.
“A supply equivalent to the global fleet of the world’s biggest ships is being effectively squandered by vessels being forced to waste time in port congestion queues,” it said. “Shipping Australia urges shippers to direct their lobbying efforts to where it is truly needed – at port congestion and poor performance.”
Shipping Australia CEO Melwyn Noronha added: “Misleading statements from certain elements in the shipper community are painting a false picture of the shipping industry, which has been highly resilient and provided excellent value for money right throughout the pandemic, despite all the restrictions imposed by governments”.
Source: loadstar.com
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