5 alternative container ports for avoiding congestion
The Los Angeles-Long Beach ports complex was the poster child for supply chain gridlock in 2021, with dozens of vessels scattered for miles off the coast waiting for a berth and piles of containers bringing landside cargo flow to a crawl. Vessels are taking five days or more to unload, and importers and exporters are experiencing extensive delays to secure containers and the chassis to transport them. Major ports such as Oakland, California; Seattle-Tacoma; New York-New Jersey; Savannah, Georgia; Charleston, South Carolina; Houston; and Vancouver, British Columbia, have all experienced varying degrees of backlogs. Some cargo owners and freight forwarders are bypassing the port congestion in major gateways by chartering small vessels, or using other tactics, to move containers to small ports that traditionally handle breakbulk, bulk and roll-on/roll-off cargoes. (Breakbulk shipments, such as rolls of steel or wind turbine components, are too large to fit into standard shipping boxes and are individually loaded and secured on the vessel.)
Baltic index edges up from 8-month low
The Baltic Exchange’s dry bulk sea freight index rose on Tuesday, crawling away from a more than eighth month low, helped by strong demand for capesize and panamax vessels. The overall index, which factors in rates for capesize, panamax and supramax vessels, gained 68 points, or 3.1 percent, to 2,285, snapping a 12 session losing streak. The capesize index rose 38 points, or 1.6 percent, to 2,350. Average daily earnings for capesizes, which transport 150,000-tonne cargoes such as iron ore and coal, increased by $314 to $19,490. Dalian coking coal futures rose on Tuesday to their highest level in more than two months as market participants welcomed the new year, feeling optimistic about demand prospects for the steelmaking input in top steel producer China. The panamax index added 301 points, or 11.7 percent, to 2,874. Average daily earnings for panamaxes, which ferry 60,000-70,000 tonne coal or grain cargoes, rose by $2,707 to $25,865.
Bunker industry calls for holistic approach
The bunker industry’s adoption of mass flow metering technology has ushered in an era of transparency but cleaning up the industry’s reputation will require other concerted efforts and innovative solutions too, market sources said. MFMs measure the flow rate in the pipe, gauging the quantity as well as the mass and density of the fuel. The adoption comes as intensified competition worldwide has squeezed margins for some bunker players, making it challenging for them to compete on price, quantity, and quality, while also achieving environmental and safety standards. “Our experience as a physical supplier in Singapore over the last 15 years has been positive mostly thanks to the strong presence of the MPA [Maritime and Port Authority of Singapore],” Timothy Cosulich, chief executive of Fratelli Cosulich, said on Dec. 29.
Lockdown of vital port in Ningbo disrupts logistics
A partial lockdown of Ningbo city in East China’s Zhejiang Province, home to the world’s largest port, has led to problems like fewer drivers and trucks, raising concerns about supplies for renowned international fast fashion brands like Nike and Adidas. But the problem is less serious than some people might have thought, as Chinese suppliers have abilities to redistribute their industry chains and the local government has stepped in to help stabilize logistical supply, industry insiders say. The authorities announced a lockdown for the district of Beilun in Ningbo following the discovery of a coronavirus case on Saturday. The infected person was an employee of Shenzhou International, a major garment processing company in Ningbo that supplies global sports and leisure brands like Nike and Uniqlo. From Saturday till press time, Ningbo reported 23 coronavirus cases.
China constructs the world’s largest ro-ro ship
China started the construction of the world’s largest and most advanced green roll-on/roll-off (ro-ro) ship in Yangzhou, East China’s Jiangsu Province, marking the country’s design and manufacturing level of mega ro-ro vessels has reached a new level, according to media reports. The ship is 238 meters long and 34 meters wide, with a design draft of 7.2 meters, a speed of 20.8 knots (38.52 kilometers per hour), and a deadweight of 17,000 tons, science media stdaily.com reported on Monday, citing sources from the Yangzhou Science and Technology Bureau. The ro-ro ship is equipped with a 7-level vehicle deck with a lane length of 7,800 meters, which is 1,100 meters longer than the current largest ro-ro ship lane in the world, and can carry 535 heavy-duty trailers and all kinds of trucks and minibuses, with a maximum load tonnage of 90 tons per vehicle. The ship is jointly designed by Jinling Shipyard and Marine Equipment and Technology Institute of Jiangsu University of Science and Technology.
Shrugging off omicron, OPEC+ approves another 400,000 b/d oil production boost
OPEC and its Russia-led partners have approved another hike in production quotas, betting that the market can absorb more oil in the coming months despite surging COVID-19 infections worldwide. In affirming a 400,000 b/d output increase for February on Jan. 4, the OPEC+ alliance signaled continued confidence that the omicron variant will have a smaller impact on global oil demand than previously assumed, and indeed, crude prices have so far proved resilient, hovering around $80/b. Many economic indicators have remained positive, while global oil inventories have continued to decline as demand has outpaced supply over the past several months. But even before the rapid spread of omicron cases, many forecasters – including OPEC’s own analysts, had projected an oil oversupply throughout 2022, with weaker seasonal demand leading to a significant surplus in the first quarter.