From: David Hickmott
[DHickmott@uli-atl.com]
Sent: Tuesday, June 22, 2010
1:25 PM
To: David Hickmott
Cc: David Hickmott; David
Hickmott
Subject: American Shipper
Articles: Transpacific Trade
Dear Valued Unique Customer,
The below articles were recently published in the American
Shipper. The Transpacific Trade has rebounded in the past six months with
continued strong demand and short supply in terms of both equipment and space
which has translated into the ocean carriers recovery of nearly $15 billion
lost in 2009. Industry sources have further cited that due to continued
strong demand and short supply, a further incremental increase of peak season
surcharges will be implemented in July/August. Many carriers have already
filed the mandatory 30 day notice to the FMC which in most cases will amount to
a double effect for the peak season charge. Other market information has
revealed that with a strong spot market rate, the BCO customers are accepting
rates increases equal if not more than the higher PSS levels in order to secure
space during the traditionally higher volume summer months. The below
articles help to outline the current state of the Transpacific Trade.
Thank you for your support of Unique Logistics
International. We appreciate and value your business.
Discover the "Unique" difference of logistics from
Asia to USA trade!
Are you Ready? ISF Enforcement will begin on January 26, 2010.
Best
Regards
David
Hickmott - Executive Vice President
ph#404-767-0500
(ext 306)
Mobile#
678-478-6604
Fax#
404-767-3319
Transpacific carriers brace for surge
|
|
Transpacific container carriers say they are
bracing for a surge in peak season cargo after eastbound volumes in May were
sharply higher than last year.
The Transpacific Stabilization Agreement, a discussion agreement
of 15 container carriers serving the Asia-to-U.S. trade, said internal
reporting by its members "shows a 24.1 percent year-on-year increase in
traffic during the month of May alone to the U.S. West Coast, and a 30.8
percent increase in all-water shipments to the East and Gulf coasts via the
Panama Canal.
“Although the long-term economic outlook still remains unclear,
carriers are now seeing a strong peak season surge that could last for some
months” said Y.M. Kim, president and chief executive officer of Hanjin Shipping
Co.
|
|
|
Kim |
TSA said first
quarter cargo demand from Asia to the United States was equivalent to 2.54
million TEUs, 13 percent more than in the first quarter of 2009 according to
figures from PIERS.
Although TSA said this was below comparable volumes in 2008, it
"caught both container lines and their customers off guard, but carriers
say they are now adjusting to what appears to be modest but sustained economic
and trade growth through 2010."
“Now it appears that the worst is behind us," said Eng Aik Meng,
president of liner for APL Ltd. "Despite a pullback in U.S. job creation
and retail sales in May, the pipeline of Asian exports to the U.S. is filling
rapidly and consumers are more optimistic over job security and household
incomes going forward.”
Revenue remains a concern for the liner industry, which some
analysts estimated lost $15 billion in 2009, TSA said.
“Lines found themselves on the brink of failure last year, and it
was a sobering experience,” Kim said. "After last year, no carrier is going
back to operating vessels underutilized and at non-compensatory rates. Every
sailing and every equipment turn will have to be economically justifiable.”
He said more than ever carriers need peak season surcharges
"to prepare for service contingencies and to meet schedule and delivery
commitments on a sailing-by-sailing basis, and also to cover increased existing
operating expenses, and the increased cost of capital.”
TSA said "increases achieved in the current contract round
still do not fully restore rates to the levels of late 2008, let alone provide
for long-term viability and service expansion."
TSA said its member "acknowledged the difficulties many
shippers have had going into second quarter 2010, with space and equipment
availability in Asia, as a result of the unforeseen surge in cargo volumes.
Lines have individually adopted a range of strategies to address these issues,
including reinstatement of key service strings, deployment of
‘extra loaders’ -- vessels added on a per-sailing basis to carry loaded
containers to the U.S. and reposition empty equipment back -- and have also
noted the use by some shippers, of transloading to keep ocean containers close
to port for quicker turns."
TSA members are APL, China Shipping, CMA-CGM, COSCO, Evergreen,
Hanjin, Hapag-Lloyd, Hyundai, "K" Line, Maersk, MSC, NYK, OOCL, Yang
Ming and Zim.
Container production doesn’t stack up
|
|
Demand for
shipping containers will outstrip supply in the peak shipping season this year,
as manufacturers are unable to keep pace with demand for new equipment,
information service Alphaliner predicts.
Writing in the most recent issue of its weekly newsletter, Alphaliner
said it expects global production of containers this year to be 1.5 million to
2 million. That's up from the 300,000 to 350,000 that is estimated to have been
built last year, but far below production in prior years.
John Maccarone, chief executive officer of Textainer, the world's
largest container leasing company, said container building averaged about 3
million per year from 2004 to 2008. About 1 million containers per year had
been scrapped, so that the world fleet grew in size at about at about an 8
percent annual rate, after disposals, between 2004-2008, he said.
Alphaliner estimates the world container fleet at about
27.25 million TEUs.
Construction of new dry cargo boxes came to a virtual halt in the
fourth quarter of 2008 and container manufacturers did not reopen until the
last couple of months of 2009. Maccarone said there was some continued
production of reefer boxes.
He adds that retirement of old equipment accelerated during the
downturn because demand was so low during the recession so that the world
population of containers actually declined by about 4 percent in 2009.
Container production is centered in China, with two companies --
CIMC and Singamas controlling about 3.5 million TEUs of the world's 5
million-TEU of capacity. Alphaliner predicts those two companies will
only produce 1.35 million TEUs in 2010.
Maccarone said he has seen some estimates that as many as 1.9
million TEUs might be built, but he said "the problem is they lost all
their labor and it has taken them quite some time to ramp up again. Even at the
moment they are not able to produce on a double shift basis," he said. It
may take until late this year or early 2011 until factories are producing at
capacity again, he added.
Strong demand for containers has boosted the cost of equipment.
Alphaliner estimates the current price of containers has
climbed to $2,750 for a 20-foot box compared to $2,000 at the end of 2009.
Maccarone said that a rule of thumb is that a 40-foot dry
container costs about 1.6 times what a 20-foot box costs and a high-cube
container about 1.7 times what a 20-foot box costs.
Maccarone said demand for containers has increased as ships have
come out of layup.
The shortage of containers has also be been magnified by
super-slow steaming. Maccarone said lines tell him it takes 5 percent to 7
percent more containers to carry the same amount of cargo because of super-slow
steaming.
Carriers are much more efficient in their use of containers than
they once were -- Alphaliner said that where they would have three
containers for every vessel slot, they now need only two, because equipment is
turned around more quickly, especially on the main routes from Asia to Europe.
Many carriers are also adding "special loaders" or
"sweeper ships" to pick up empty containers and return them to Asia,
where they are in great demand.
According to Alphaliner, Maersk said it is deploying five
ships to collect empties and bring them back to the Far East, and it said it
has identified 10 from other carriers, that are on trips to the Far East and
are likely being used primarily for empty container repositioning