The assessment provided by major bank UBS indicates shippers will face high charges for the maritime industry’s upcoming climate mitigation efforts. The findings were presented in UBS’s new report about shipping’s decarbonization, reports Danish business media Finans.
The shipping industry – representing around 3% of global CO2 emissions – will have to pay up to USD 300bn to achieve the green energy transition on the way to 2050.
The bank expects much of the bill to be footed by customers. Shippers will subsequently face higher freight prices for sustainable transportation, while end users could be less affected and presented with a price increase on consumer goods below 1%.
The climate target for shipping has been set by the UN’s International Maritime Organization (IMO) and so far entails a 50% reduction of greenhouse gas emissions by 2050 and a complete phase-out as soon as possible thereafter.
A key to achieving this goal is the switch from traditional heavy fuels to alternative fuel types such as green hydrogen, green methanol and ammonia. This requires significant investment in the development of infrastructure, and sustainable fuels are needed. Otherwise, the transformation will not progress at the pace it needs to.
Source: ShippingWatch
According to the Global Port Tracker report released by the National Retail Federation (NRF) and Hackett Associates, import cargo volume at major container ports in the U.S. while recovering from a nearly three-year low in February, will be at significantly lower levels than last year.
Most U.S. ports have recorded declining year-over-year import volumes since late last year and declining exports out of China highlight the slowdown in demand forconsumer goods, according to Hackett Associates Founder, Ben Hackett. “With economic uncertainty continuing, the impact on trade is clear,” said Hackett.
U.S. ports handled 1.62 million TEUs in March, up 5% from February but down -30.6% year-on-year. Yet-to-be published April figures are predicted at 1.73 million TEUs, translating to a -23.4% decrease year-on-year. 1.83 million TEUs are estimated to be imported by the country's ports in May, a -23.5% drop from last year's 2.4 million TEUs, June is expected to reach 1.9 million TEUs, which is a 15.9% decrease from the same month last year. The third quarter of 2023 is expected to total 6 million TEUs, down -7.2% year-on-year. The first nine months of the year would total 16.5 million TEUs, down -17.8% year-on-year.
Meanwhile, the first half of 2023, previously forecast at 10.8 million TEUs, has been revised to 10.4 million TEUs, down -22.8% from the first half of 2022. “Our view is that imports will remain below recent levels until inflation rates and inventory surpluses are reduced,” Hackett said.
“Consumers are still spending and retail sales are expected to increase this year, but we’re not seeing the explosive demand we saw the past two years,” said NRF Vice President for Supply Chain and Customs Policy, Jonathan Gold. “Congestion at the ports has largely gone away as import levels have fallen, but other supply chain challenges remain, ranging from trucker shortages to getting empty containers back to terminals.”
Source: gCaptain
Industry analyst CLIVE Data Services, part of Xeneta, said the industry is facing a challenging four or five months following “a flood of summer bellyhold capacity on major lanes”. Significantly more bellyhold capacity has entered the market since the start of Northern Hemisphere airline summer schedules which kicked off in April.
CLIVE believes that the global air cargo market may have to wait will October for any meaningful recovery.
In April, airfreight spot rates fell by -41% year-on-year (y/y), while a 7% rise in cargo capacity resulted in lower load factors and a 14th consecutive month of falling y/y volumes. CLIVE’s ‘dynamic load factor’, which measures how full planes are using both weight and volumes, fell -5 percentage points in April to 57% y/y, continuing a more than year-long decline.
Niall van de Wouw, Xeneta’s chief airfreight officer, said that even though there was an impact on volumes with several public holidays - Easter, Eid, Pesach and Ramadan falling so closely together, the fact remains there is a general slump in market conditions. “This is a market that will test companies. If you look at Europe-North America, what other industries see supply increase from one month to the next by 26%, very much outside of their control? This is a tremendous jump in capacity and, consequently, we saw a corresponding 12% fall in spot rates on these routes.”
“Of course, we should not forget that freight rates are still elevated but the influx of belly capacity this summer means the air cargo market may have to hang on until October, when winter schedules begin and capacity is reduced, for the next signs of an upturn in volumes and yield,” van de Wouw said.
“The market is in the doldrums; we do not currently see this changing until much later in the year or early 2024. The air cargo market is readjusting, and this will also open up new opportunities, but we see a difficult few months ahead”, he pointed out.
Source: Air Cargo News
Following a 7.7 percentage points increase in reliability between January and February in 2023, global schedule reliability was up 2.4 percentage points in March, reaching 62.6%, according to Sea-Intelligence’s latest Global Liner Performance report. In addition, the report noted the March performance nearly matched the 2020 figure in the same month. “On a year-over-year level, schedule reliability was a staggering 26.8 percentage points higher,” highlights Alan Murray, CEO of Sea-Intelligence.
Additionally, the analyst assessed that the average delay for LATE vessel arrivals continued to decrease, falling -0.26 days month-on-month in March 2023 to 5.03 days. It is now only marginally higher than the corresponding period in 2020 and significantly lower by -2.41 days year-on-year.
Of the top-14 carriers, Maersk was the most reliable, with schedule reliability at 68.6%. Next was MSC, with 67.7%. An additional five carriers had schedule reliability of over 60%. The remaining carriers performed similarly and had schedule reliability between 50%-60%. Yang Ming was the least reliable carrier, with reliability of 53.4%.
Year-over-year comparisons can be augmented by comparisons to the same month in 2019 before any pandemic impact. Inbound loads this January compared to January 2019 equated to a four-year CAGR of negative 1.4%, according to Blue Alpha Capital.
Source: splash247.com
Savannah, the second-fastest growing major U.S. port for imports over the last decade, will add 1.5 million TEUs of annual capacity later this year. An expanded separate terminal is projected to open in January 2025, with another 1.5 million TEUs in capacity. Ultimately, Georgia Ports Authority (GPA) aims to have 3 million TEUs of additional capacity by mid-2026.
GPA seeks to have at minimum 20% more capacity than demand to ensure effective cargo flow. Laden import container volume through Savannah between 2012 and 2022 more than doubled from 1.07 million TEUs to 2.8 million TEUs, increasing 167% according to PIERS. Among the top 10 U.S. ports by import volume, that’s second only to Houston, which grew its volumes more than 200% over the period to nearly 1.9 million TEUs last year. Savannah is the fourth-largest U.S. gateway for imports.
In March, the East and Gulf coasts handled 31.9% and 9.4%, respectively, of Asia imports coming into the country, with the West Coast handling the rest, according to PIERS. Just five years ago, the East and Gulf coast shares were 29.5% and 3.6%. Within the same period, Savannah’s share of Asia imports rose from 8.2% to 10.5%.
Source: Journal of Commerce
