ILUWU, PMA "Hopeful" in Reaching Deal Shortly

The International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) issued a joint statement on February 23, reassuring that they continue to negotiate and “remain hopeful of reaching a deal soon”. Both parties also agreed not to discuss negotiations in the media while collective bargaining continues.

The announcement noted that both parties had tentatively agreed on certain key issues, including health benefits, stating that both parties “remain committed to resolving remaining issues as expeditiously as possible” and would continue until an agreement is reached.

Negotiations on the contract, which began on Tuesday, May 10, 2022 in San Francisco, covers more than 22,000 dockworkers at 29 West Coast ports.

Source: American Journal of Transportation

Easing Economic Headwinds Improve Prospects Across Asia: IMF

The economic headwinds the Asia-Pacific region faced last year are beginning to ease, said the International Monetary Fund (IMF). The developments are improving prospects across the region, making it “by far the most dynamic of the world's major regions", the IMF noted, adding that growth is set to accelerate to 4.7% this year from 3.8% in 2022.

The region’s emerging and developing economies which are set to expand by 5.3% in 2023 is a driving factor.“China and India alone are expected to contribute more than half of global growth this year, with the rest of Asia contributing an additional quarter. Cambodia, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam are all back to their robust pre-pandemic growth,” said the IMF.

The report noted that prospects for Asia's advanced economies is more mixed (see Table 1). The IMF said Japan's accommodative policies, border reopening, and supply chain improvements are supporting strong performance. Growth would fall back in 2024 as conditions normalize and policy support eases. However, for Korea, Singapore, and Taiwan, the cool down of manufacturing exports will likely last through year-end. "But with growth thought to be bottoming out in the rest of the world, external demand should firm heading into next year," noted the IMF.

“Our analysis in the latest Regional Economic Outlook for Asia and the Pacific shows that, for every percentage point of higher growth in China, output in the rest of Asia rises by around 0.3 percent,” according to the IMF. However, the organization said while the short-term outlook has brightened, longer-term challenges of elevated debt and financial risks for a number of Asian countries were a concern.

Source: International Monetary Fund

Pace of New Container Vessel Deliveries to Uptick in March

New containership deliveries are beginning, with the pace picking up in March, stretching through 2025. Maritime Strategies International (MSI) estimates deliveries will total 717,900 twenty-foot equivalent units in Q2 2023, up 62% sequentially from the current quarter, with deliveries rising to 764,800 TEUs in Q3 2023.

Alphaliner’s analysis of new ships set for deployment in mainline trades has the most relevance for the U.S. and European importers served by these vessels. 89 new mainline vessels are scheduled for delivery in the remainder of 2023, followed by 130 next year and 96 in 2025, for a total of 315 over the next three years.

As for new vessels on non-mainline trades which include smaller ships, intra-Asia ships, and feeder vessels, the data shows these 11 carriers have a total of 499 newbuildings on order.

Alphaliner divided the new vessels into three size categories. “Megamaxes” being deployed in the Asia-Europe Trade; “Neopanamaxes”, vessels that can transit the Panama Canal; and other mainline vessels impacting the U.S. ocean freight market. Neopanamaxes represent 60% of the total mainline newbuildings to be delivered through 2025. Megamaxes account for 23% and other mainline newbuildings account for 17%. There are concerns about overcapacity in the Asia-Europe trades as 60% of new Megamax vessels will be delivered this year, just as demand is weakening.

Deliveries of Neopanamaxes and other mainliner vessels will be heavy throughout 2023-25, but particularly so next year, accounting for 44% of total deliveries. This will mean heightened capacity pressures on Trans-Pacific rates in 2024. Matt Cox, CEO of Trans-Pacific carrier Matson said he expects an intensification of resizing strategies “over the coming months”.

Source: American Shipper

Empty Containers Pile up at Asian Ports

Empty containers are stacking up at China’s key ports. As a result, many terminals are relocating surplus boxes to secondary ports to free up space. According to the Container Availability index (CAx) by Container xChange, an index of 0.5 indicates a balanced market, and anything above denotes an excess of containers. As of February 5, the Chinese ports of Shanghai, Ningbo, Tianjin, and Shenzhen have recorded a surplus of containers for 11 consecutive weeks above 0.6.

Christian Roeloffs, CEO of Container xChange, noted the significant increase in empty containers littering China’s coastline over the past five months, describing the current market outlook as “bleak”. “The falling rates and increased availability of containers in certain regions of the world are indicative of weak demand and slower economic growth,” Roeloffs said in a market update.

Maersk warned this month that global box volumes could drop -2.5% this year, while Clarksons Research suggests a grimmer figure at -3.1%.

The latest throughput numbers from U.S. ports, such as Long Beach port, can partially explain empty containers piling up in Shenzhen and other Asian ports. The latest report from John McCown-led Blue Alpha Capital shows the ten largest American box ports experienced the most significant monthly inbound drop in volumes since the global financial crisis of 2008, down by -17.9% January marks the seventh straight month of expanding year-over-year declines at American ports. West coast ports were even weaker, with a decline of -23.5% in January.

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.


Port of Vancouver Expansion Increases Container Handling Capacity by 60%

The Centerm terminal at the Port of Vancouver, Canada’s largest container port has completed an expansion project increasing its annual container throughput capacity by 60% to 1.5 million TEU.

“By using new technologies and reconfiguring the terminal, we have been able to increase throughput capacity by 60 percent with only a 15 percent increase in the terminal footprint,” said Maksim Mihic, chief executive and general manager of DP World, which operates the Centerm terminal.

The project involved expanding the terminal’s footprint to the West and East, reconfiguring and expanding its container yard, building a more efficient gate complex, and expanding the intermodal yard.

A statement from the Vancouver Fraser Port Authority said that Canada’s West Coast marine container terminals are forecast to hit capacity by the middle to end of this decade following average annual growth of 5% from 2011-2021.

Source: Journal of Commerce

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