Container volume at major Chinese ports declined 8.9% in Q1

In the first quarter of this year container volumes at the eight major Chinese hub ports declined 8.9% year-on-year.

Meanwhile the overall cargo throughput of major Chinese coastal ports declined 3.5%.

According to the statistics released by China Ports & Harbors Association, the eight major Chinese ports posted a throughput of 37.63m teu container in Q1, a decline of 8.9% year-on-year.

Due to the outbreak of COVID-19, the container throughput in February dropped by 19.8% while the volume in January and March declined 3.1% and 5.6% respectively.

The COVID-19 epidemic seriously impacted the foreign trade container business. In February the container volume of major international liner services at coastal hub ports declined 19.1% year-on-year.

Among them, volume of the North-US routes dropped 24.3%; European routes dropped 14%; Japan/South Korea routes dropped 24.6%. The situation improved in March, however, the numbers for North-US and Japan/South Korea routes declined 15.1% and 12.7% respectively.

The major ports along Yangtze river recorded container volumes of 1.05m teu and 45.06m tons cargo volume in Q1, a decline of 16.8% and 8.8% year-on-year respectively.

The association forecasts continued declined on port cargo volume in Q2, and a shortage of cargo resources will be the common challenge for domestic ports.

Supply chain is heading to Vietnam

The global relocation of supply chain links from China to Vietnam will continue, despite the coronavirus pandemic, according to the latest report released by JLL.

Data from the US Census Bureau show a 35.6 per cent surge in goods imports from Vietnam last year, compared with a 16.2 per cent contraction in goods imported from China.

"Data for this year will be distorted by the effects of the coronavirus on global supply chains, but the trend of manufacturing moving from China to Southeast Asia will continue," said Stuart Ross, head of industrial for Southeast Asia at JLL

Meanwhile, Stephen Wyatt, country head of JLL Vietnam said that Vietnam remains a promising market with a growing trend of manufacturing companies looking to set up operations in the country, which has been happening for a number of years.

“Industrial park developers remain confident that demand for industrial land will continue to grow and therefore land prices are expected to increase in line with the long-term potential of Vietnam’s industrial segment," explains Wyatt.

Vietnam has attracted the majority of those who wanted to persify their manufacturing portfolio outside China, thanks to its relatively developed infrastructure and proximity to China.

The average land price in the northern areas reached $99 per square metre per lease term, up 6.5 per cent on-year in the first quarter of 2020, while the southern areas recorded $101 per sq.m per lease term, up 12.2 per cent on-year in the last quarter of 2019.

Ready-built factories recorded in the southern provinces have an average price of $3.5-5.0 per sq.m per month, a slight increase in Binh Duong, Ho Chi Minh City, and Long An, and remain stable in the rest of the provinces.

In light of the current COVID-19 situation, the postponement of ongoing leasing negotiations and new requirements will become more apparent if the situation does not improve soon.

However, JLL believes that the market is likely to recover and grow rapidly after the epidemic is well under control.

The disruption in the global supply chain caused by the virus outbreak is urging businesses to persify their manufacturing portfolios geographically, instead of being overly reliant on one market.

Meanwhile, China is committed to growing high-value industries. As a leading manufacturer of solar panels, 5G networks, AI, and batteries, these industries are generally more favoured by local authorities. Lower-value manufacturing chains are often seen as adding to environmental pollution. As China moves towards becoming more eco-friendly, a cleaner, less space-intensive manufacturing sector will also free up land for rezoning to convert to residential spaces.

"Not all manufacturing can be easily outsourced to Vietnam. Manufacturing wages in China are now more than three times those in Vietnam, but skilled labour in China is also higher. The sheer scale of China cannot be replicated: there are more migrant industrial workers in China than people in Vietnam. Furthermore, a large percentage of China’s manufacturing is to serve the domestic market," Stephen added.

According to JLL, many businesses are likely to rethink their supply chains in the long term to ensure the continuity of their operations and mitigate risks of future shocks. Coupled with initiatives to improve the sustainability performance and limit the environmental impact of wider operations, retailers may opt to produce and house more stock locally.

With COVID-19 and trade tensions driving the shift of production lines from China to Southeast Asia, Vietnam, in particular, seems to have emerged as an attractive destination for investors and manufacturers alike

Cosco Shipping Lines launching new Med-US East Coast service

Cosco Shipping Lines is launchings a new dedicated East Mediterranean - US East Coast (EMA) service in April.

At a time of an unprecedented number of blanked sailings due to the demand impact of the COVID-19 pandemic Cosco Shipping Lines is launching a new service

With weekly departures from all main export markets in Italy, Spain, Turkey, Israel as well as Egypt and Greece, EMA will offer dedicated service to/from the key US East Coast ports.

In the West Mediterranean Region the major export markets such as Algeciras in Spain and Genoa in Italy are covered with a direct call; Israel, Turkey and Egypt in the East Mediterranean are linked with direct calls and offer fast connection to North America East Coast relevant entry gates.

 Romania, Ukraine, Russia, Georgia, Croatia, Slovenia, and Bulgaria are served via transshipment in Piraeus. With Algeciras being the first and last port of call in the Mediterranean Region, EMA service can offer fast connection to US ports and West Mediterranean ports.

As the end of 2019, Cosco Shipping Lines operates 401 shipping routes including 255 international services, 58 China’s coastal routes and 88 Yangtze river and Pearl river routes

Keeping essential maritime businesses working the US

Business is in “shutdown mode” across the US; weekly unemployment statistics just released on 9 April (numbering 6.6m, a staggering number- in line with that of late March figures) confirm that if walking around deserted downtowns did not, but maritime and shipping need to keep working.

The bottom line is that shipping and maritime activities, and the supply chains which feed them, are deemed to be “Essential Businesses”- which are allowed to stay open. Of course, the devil is in the details- with companies and trade associations seeking clarifications on who is essential. Maritime businesses clearly are.

A new challenge is emerging as COVID-19 spreads around the country. New Orleans, a major port area for crude oil, refined products and all manner of petrochemicals, as well as agricultural commodities on the dry bulk side, is now in the crosshairs, with the State of Louisiana having been declared a Federal “Disaster Area”, along with New York, California and Washington State, also maritime gateways- enabling it to receive expedited government aid.

Medical experts are now looking back to the Mardi Gras festivities of late February as having contributed to the spread of cases only now emerging. While the heavily attended parades and densely packed gatherings occurred during late February, Louisiana’s “stay at home” directives were only issued in late March, drawing on Federal governmental definitions of “Essential”.  The Federal directives cover the “Maritime” sector, defined (per other governmental publications) as:

“Includes a wide range of watercraft and vessels and consists of approximately 95,000 miles of coastline, 361 ports, more than 10,000 miles of navigable waterways, 3.4 million square miles of the Exclusive Economic Zone, and intermodal landside connections, which allow the various modes of transportation to move people and goods to, from, and on the water.” A later version, also tied into the directives, refers to a “Geographical complex and diverse system of waterways, ports and landside intermodal connections.” It also refers to 29,000 miles of Marine Highways.

All the designations are well and good but the reality around the waterfront is that work has been slowed down by workers testing positive for the virus, and by fears of further spread. For example, in the third week of March, a Baton Rouge newspaper reported that a contract welder working at the Dow Chemical facility in Plaquemine, just south of Baton Rouge, on the Mississippi River, had tested positive for Coronavirus.

Similar stories abound in the Lower Mississippi; happily, the welder was reported to be recovering. High water levels on the Mississippi River were adding to the chaos. On the other side of Louisiana, at Lake Charles, the virus had a different impact, with oil giant Shell (like other “majors” now retrenching on capital spending)  pulling back from investing in upgrades for an LNG export terminal.

The bright spots in Louisiana, of sorts, are the heroic activities of volunteer groups “Cajun Navy” and “Cajun Army”- which have assisted in rescues following floods in New Orleans (but also in Houston, hundreds of miles to the west). The groups are providing rescues of a different sort than waterborne rescues- this time, gathering medical supplies and bringing them to front line health care workers.

Seatrade Awards announces new award for Port and Terminal Technical Innovation

In an exciting development, Seatrade Maritime is pleased to announce the launch of a new award for this year’s Seatrade Awards, which take place this September in London, UK.

The Port and Terminal Digital Technology Award – presented in collaboration with TOC Events Worldwide - will recognise those spearheading the development and implementation of innovative technical solutions that are increasing operational efficiency, saving costs and optimising the performance across the port and terminal network.

A total of thirteen categories will soon be open for entry at Seatrade Awards 2020 where for a record 32nd year the best of maritime achievement will be awarded with one of the industry’s greatest accolades.

 “The demands on global trade have rapidly evolved over the last decade, which continues to present port and terminal operators with a myriad of challenges to contend with. And yet, we’re seeing those ports and terminals find innovative, data-driven solutions through technology that ensures they remain agile, competitive and capable of keeping pace,” said Chris Morley, Event Director of Seatrade Maritime.

“We are delighted to be working in close collaboration with TOC Events Worldwide with this new award at this year’s Seatrade Awards,” continued Morley.

A drive for increased speed and efficiency has seen the investment in technology across the global port network rocket over recent years, with the global smart ports market projected to reach US $5.3bn by 2024, which represents a compound annual growth rate of 25% according to the Smart Ports Report 2019.

“TOC Events Worldwide is pleased to collaborate with our colleagues at Seatrade on this award for port & terminal technical innovation.  The ports & shipping sector is fast embracing AI, 5G, IoT, M2M and other seemingly futuristic technologies.  We look forward to supporting Seatrade in recognising best in class for those who are leading the way in this exciting digital era for the industry,” commented Paul Holloway, Event Director for TOC Events Worldwide

Those entering the Port and Terminal Digital Technology Award will need to impress an independent panel of experts, analysts and thought leaders, who will provide each submission with a rigorous assessment. The panel will be chaired by economist and non-executive President of Clarkson Research Services Limited, Martin Stopford, who has chaired the Intelligent Shipping categories judging panel at Seatrade Awards for the last three consecutive years.

The winners of the Port and Terminal Digital Technology Award will be revealed on Thursday 17 September during an evening ceremony at Plaisterers’ Hall, London.

PIL hits out over ‘totally false’ bankruptcy rumours

Singapore-headquartered Pacific International Lines (PIL) has hit out at rumours that it is facing bankruptcy threatening legal action against those making false claims.

The financial health of the privately-owned container line has become an increasing source of speculation in recent months.

In a strongly worded statement PIL said: “Recently, there have been rumours circulating on social media, making false claims about a potential bankruptcy of Pacific International Lines (“PIL”). PIL would like to clarify that these rumours are totally false and the information and content derived therefrom are unfounded.

“We urge the public not to spread such fake news and misinformation. PIL reserves the right to pursue legal actions against those who generate and spread these defamatory rumours during this Covid-19 pandemic period and related false information after this statement.”

PIL ranks as the world’s 10th largest container line according to analyst Alphaliner. The company is owned by the Teo family and helmed by SS Teo, a highly respected figure in the Singapore shipping community.

“As the (COVID-19) situation in China continues to improve, PIL and all our China subsidiaries have fully resumed operations on 9th March. PIL has been making steady progress and is currently actively preparing for a strong rebound after the epidemic,” the company said.

“In the face of an increasingly complex and uncertain global market environment, PIL has remained resilient by embarking on a service rationalization which will focus our efforts on key liner markets in Asia, the Middle East, Africa, Oceania and South America. Our strategic business integration has enabled us to be well-positioned in capturing market opportunities brought about by the Belt and Road Initiative (BRI), and moving forward, PIL will continue to strengthen our leading position in the North-South routes.”

                                                                         (Source: VNcustomsnews, American Shipper, Seatrade Maritime)