Issue 4 2021 - Freight Business Journal


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soon spreading to other trades that did not pass through the Suez Canal. Jensen did not believe that

the Ever Given incident was particularly

exceptional in

itself, however. Blockages of key waterways happened all around the world from time to time and there was nothing to suggest that the modern generation of ultra- large containerships was any more susceptible to accidents than other ships. He pointed out that Suez had been used without incident by very large oil tankers in the decades when such vessels were common. “Suez was not a ‘black swan’ event,” Jensen declared. Indeed, even Covid was, to some extent predictable, given that scientists had warned of

a major global pandemic

for many years. The world of shipping had always had to deal with earthquakes, weather events and other risks. He pointed out that any

shortages of shipping capacity were likely to be temporary. There were enough ships and containers to meet demand in 2019, and the market would move back into balance at some point. However that might not necessarily be before the end of

2021, he suggested. The Covid pandemic had

accelerated rather than caused many of the changes in the shipping market, he added. With the growth of container shipping alliances, the container shipping market was now much less fragmented and carriers were much more easily able to take out capacity when demand dipped – hence the rise in the number of blank sailings in 2018 and 2019. Over the years, shippers had

become used to a market with enormous over capacity, but the future might be one in which freight rates were structurally higher – and this was before the global decarbonisation agenda started to have an effect. The rate hikes resulting from the imposition of low-sulphur fuels would be child’s play in comparison with what was to come.

In a Container Market Outlook

presentation on 6 May, Drewry senior manager for container research Simon Heaney said that average port delays around the world were still around 6-8 days. There was, he said, “a strange paradox in that the worse the disruption, the more profitable carriers become”. However, he forecast that

the market would, eventually, revert to something like its pre- pandemic level. Meanwhile, though, carriers

were pushing up rates and putting shippers “in a very tough spot”. He did not expect terminal productivity to improve until the third quarter of this year, while the demand on ports would continue to grow. One possible crumb of hope

for shippers was that carriers were once again investing – indeed, arguably, over-investing – in new tonnage and this could eventually swing the global container market back towards the glut that has characterised most of the past decade or so in shipping. Meanwhile, though, rates had

soared from typically $650 per teu on east-west trades to around $1,100 and were expected to remain at above $1,000 into 2022. Manager of Drewry marine

finance research, Nilesh Tiwary added that, while he did not foresee further major merger and acquisition among shipping lines – the opportunities have narrowed since most major operators have already been bought up – but there could be more ‘vertical’ acquisitions with shipping lines taking stakes in logistics companies.

Continent-UK deep sea price gap widens, says Peel Ports expert

Deepsea ocean rates to UK ports are now around $1,000 a box more than those to Continental European ports, Peel Ports commercial director Stephen Carr told an online Coastlink short sea shipping conference

on 22 April. He said that recent disruptions to shipping, including Covid and, more recently, the Suez Canal blockage, had widened differentials between the two, to the extent that using feeder or short sea solutions between the

Continent and UK was becoming more viable. However, it was too early to

say whether the changes were only a short term phenomenon or a permanent change in the market. However, he suggested that the move to bigger containerships might prompt operators

to concentrate on

fewer port calls, possibly omitting those in the UK in preference to major Continental hubs such as Rotterdam or Antwerp.

and expects to carry a variety of goods, including machinery parts, healthcare products, chemicals and motor vehicle parts. Cargo capacity on the new

Virgin Atlantic launched cargo only services between Frankfurt and its London Heathrow hub on 25 April, operating three times a week. It is the first time that the airline has offered direct flight services to and from the Germany gateway The service will operate using

Boeing 787 aircraſt which will offer up to 35 tonnes of cargo capacity, bolstering the existing daily trucking offering. Connections to and from the US are available over Heathrow.

Virgin Atlantic says that

Germany’s air trade is resilient despite the impact of Covid-19

Virgin Atlantic service will be marketed by Kales Aviation, the airline’s general sales agency in Germany, while Swissport has been awarded the cargo handling contract for export and import shipments.

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