According to the bank’s Global Economic Prospects report released on January 11, it is projected that the U.S. economy will grow 3.7% this year, down from 5.6% in 2021. Growth in China will ease to 5.1% in 2022 from 8% last year in part due to lingering effects of pandemic as well as additional regulatory tightening from Beijing.
The 19 European countries that share the euro currency are expected to collectively grow 4.2% this year, down from 5.2% in 2021. And Japan is forecast to register 2.9% growth in 2022, up from 1.7% la
A key finding from Boston Consulting Group’s (BCG) new report “Customers’ Willingness to Pay Can Turn the Tide Towards Decarbonized Shipping” shows the urgency to address climate issues in the sector have grown. Of those surveyed, 82% are prepared to pay extra for CO2-neutral transportation, up from 71% a year ago (see Figure 1).
The average premium comes up to 3%, a year-on-year increase of more than 30% in 2022, the equivalent of between $10 billion and $20 billion in extra revenue for the shipping sector. However, a 3% premium is not enough to fund decarbonization, which requires a premium of 10-15% (see Figure 1).
Speaking on the report findings, Peter Jameson, Partner Infrastructure, Cities & Transport, BCG, said, “The findings from this year’s report show great promise, with the share of customers willing to pay a premium 10% higher than in 2021. Failure to act will mean the 10-15% premium needed to fund decarbonization now will not be achieved for another five years. We must be intentional today to meet the goals for 2050.”
The report, which surveyed 125 major shipping players from around the globe in September 2022, builds on the original survey, published in June 2021.
Source: Boston Consulting Group
Global trade will reach a record US $32 trillion in 2022, with trade in goods expected to total US$25 trillion, a 10% increase in trade of goods over 2021, said the United Nations Conference on Trade and Development (UNCTAD). The agency said trade growth “turned negative” during the second half of 2022 and there are expectations of a slowdown heading into 2023.
Despite preliminary figures showing a drop in value for the trade of goods, volumes rose by 3%, reflecting resilience in global demand. Other positive factors included an improvement in logistics, lower congestion and falling freight rates. Conversely, some negative factors include lower economic growth, the high price of goods and concerns about debt sustainability.
Cargo volumes have slowed further in November at the ports of Los Angeles and Long Beach. The decline is expected to continue through the second quarter of 2023 or later.
Port of Los Angeles Executive Director, Gene Seroka said during his monthly media briefing that between August and November, the port had experienced a 21% decline in cargo volume. He pointed to an overall slowing of U.S. trade and specifically a 12% decline year-over-year in imports as retailers eased factory orders. The Port of Long Beach reported overall port volumes was also down 21%, which was 24% below the port’s five-year average.
CEO of Ocean Network Express (ONE), Jeremy Nixon, who joined Seroka at the press conference, said ONE has been blanking or canceling around 20% of its sailings since October. He expects about half its capacity will be removed around Chinese New Year, which begins on January 22, 2023.
Seroka and Nixon said a reason for declining cargo volumes is the reaction to the ongoing labor negotiations between the International Longshore & Warehouse Union and the Pacific Maritime Association, with volumes being redirected to East and Gulf Coast ports. The Port of Los Angeles saw 13 canceled sailings in November and 11 more cancelations are expected in December.
The holidays are also expected to create challenges for the ports. Nixon pointed out the earlier-than-usual Chinese Lunar New Year holiday and noted it was likely factories will close for production for a longer period, from around January 7 until February 6. He added, “Then there will be quite a long ‘rain shadow’ afterwards as it will take time to get production up and running.”
Nixon said there are expectations for “a very soft February in terms of sailings coming out of Asia” and subsequently, “manifest itself for LA arrivals as a very soft February and March as well”. “We’ll probably see some pickup in seasonality around March, April and May,” he noted.
Nixon remains positive that demand will bounce back next year. “It’s going to be a slow first half for cargo volumes. But we expect at some point there will be a rebalancing. When that comes, probably toward the second half of 2023, it’s going to be back to business as usual,” he said.
Source: American Shipper
The cancelation of sailings and shippers pulling forward cargo because of an earlier-than-usual Chinese Lunar New Year are causing capacity shortages. Consequently, some carriers are restricting spot bookings on mainline Trans-Pacific and Asia-Europe services from South China, say Asia-based freight forwarders. Regional trades are also impacted, and the space shortages have caused some carriers to roll cargo.
Carriers have made significant capacity cuts, according to data from Sea-Intelligence Maritime Analysis. 29% of Trans-Pacific capacity was blanked in October, 24% in November and 21% in December. On the Asia-Europe route, 26.5% was blanked in October, 17% in November and 19% in December.
Forwarders said carriers that have halted spot bookings include COSCO and Evergreen in the Ocean Alliance and Ocean Network Express and HMM in THE Alliance. HMM said space tightened this month on some trade lanes in South China while Maersk said it is not imposing any restrictions on cargo bookings or acceptance.
Hapag-Lloyd has stopped accepting inbound cargo to inland destinations in South China’s Pearl River Delta and Fuzhou due to the planned suspension of feeder services from late December to the end of January. Cargo consigned to main ports including Hong Kong, Yantian, and Shekou is not affected, the carrier said.
Source: Journal of Commerce
The danger of further strikes at UK’s Felixstowe port has been avoided with a pay deal reached between the operators of the port and its workforce. According to the port, over 90% of dock workers voted to accept the deal which will provide them with a wage raise of 8.5% and a one-time payment of GBP 1,000.
More than 1,900 members of the Unite union had walked out for eight days in August and September as pay talks broke down. Following the fallout, ocean carriers diverted vessels and thousands of import containers to London Gateway and Southampton for inland distribution, and to terminals at Rotterdam, Antwerp and Wilhelmshaven for later relay.
“We are pleased to have reached an agreement on the 2023 pay deal. This is the earliest we have concluded an annual pay review, and it provides welcome certainty and stability at a time when our employees, like everyone else, are facing an increase in the cost of living,” said Robert Ashton, COO at the Port of Felixstowe.
Source: The Loadstar
