Global
Container Services and Shipping Industry News
Chinese
New Year
Chinese New Year is fast approaching and starts
on 23rd January 2012. This is exceptionally early,
and based on previous years the factories are likely
to close for a minimum of 1 week, but often for
2. It is therefore recommended that importers consider
their stock levels now, to avoid running low or
out of stock in February/March. If you have any
purchase orders outstanding which you need shipping
before 23rd Jan, please let us know and we can start
chasing for these orders to be completed and shipped.
Rates
Update
All existing customers have now been updated with
their rates / contracts taking into consideration
market changes for December sailings, and in all
cases rates have been further reduced. We have however
received notification from all key carriers that
they intend to impose a Peak Season Surcharge of
USD 225 per TEU starting on 26th December 2011,
which is likely to run up to the start of Chinese
New Year. The carriers have been struggling to impose
rates increases in the last three months despite
many efforts, but with Chinese New Year not far
away and the likelihood of substantial increases
in bookings over this period, it might be the carriers
best chance so far to make rate increases stick.
We will advise all customers nearer the time if
this surcharge is to be imposed.
Additional
Containership Capacity – July 2011
As reported in our last newsletter, we have seen
worldwide vessel capacity increase by approximately
30% since early 2010, and it looks like the increases
will continue.
According to recent analyst reports,
there are likely to be 59 containerships capable
of carrying 10,000 TEU capacity or more introduced
during 2012. In total, 230 new vessels will be introduced
with a combined annual total of 1.5 million TEU.
This is despite warnings of overcapacity already,
which is having a negative effect on freight rates.
The new vessels forecast for next
year will increase the global containership capacity
by 9.5 %, and take the total TEU capacity to 16.8
million.
Maersk announced earlier this year
that they have placed an order for 20 vessels each
with a carrying capacity of 18,000 TEU, the world's
largest vessels. The first 10 vessels are scheduled
for delivery between 2013 and 2014, with the remaining
10 for the year after. Maersk have taken this decision
because they believe that volumes will increase
by 5 to 8% per year until 2015 on the largest worldwide
market, being Asia to Europe.
Carriers are keen to keep orders
flowing for bigger vessels, this is because they
are much more fuel efficient than old ones, and
overall they can significantly reduce the cost per
unit.
China
/ Far East Update – July 2011
All talk of increased rates and surcharges from
carriers with effect from 1st July once again proved
to be unsuccessful and they have delayed these plans
for another month. In fact, in many cases rates
actually reduced further, putting increased pressure
on the finances of the carriers and speculation
regarding reduction of tonnage programmes.
For two years now, some carriers
have adopted slow-steaming programmes which reduce
the amount of fuel used, and increase transit times,
therefore having an impact of reducing capacity.
More serious measures will be to remove vessels
from current loop's, but maybe this will be delayed
until after October when any rush for Christmas
orders have disappeared
Although for many importers
reducing rates is of course good news, especially
when companies are facing pressure to reduce commodity
prices, this is not necessarily good for long term
business. When rates fell to an all-time low in
March 2009, carriers took emergency measures to
reduce tonnage fast. The result was increased rates,
month on month, and then early in 2010 they hit
unbelievable high levels causing companies to re-think
their buying policy.
This could become a similar
problem again, with carriers reporting losses from
the beginning of 2011 and still rates continue to
fall. Unfortunately however, this is not a sustainable
situation and therefore it is likely that rates
will significantly increase in the future. The unknown
of course, is when is this likely to happen? This
is not an easy question to answer, but we would
guess that rates could start to increase from early
2012 or maybe sooner.
We will of course keep you updated
with the freight rate situation, either by periodic
client rate updates or by this newsletter.
EU
- South Korea Trade Agreement – July 2011
The European Union and South Korea have agreed a
major new reciprocal trade agreement, which commenced
from 1st July 2011. The main areas of interest to
UK companies will be the reduction and in many cases
zero rated duty for products arriving from South
Korea to UK and from UK to South Korea. No official
documentary proof of origin is needed, but a declaration
of origin to be specified on the commercial documents
such as invoice or packing list. This new agreement
is expected to save millions of pounds to UK companies
alone. There will be some commodity exceptions to
these rules, and interested companies should check
either the EU or HMRC website for more specific
information.
