Ocean carriers generally managed to navigate the supply-disrupted first three months of the year quite well, but the demand-disrupted next quarters are likely to tip the industry into significant financial loss, according to a senior analyst.
Based on the Q1 financial results of 11 carriers, and taking an average for the lines that do not report their financials, New York-based consultancy Blue Alpha Capital estimates the collective bottom line for the first quarter was a modest loss of $4m – much improved on the $434m for the same period last year.
Source: The Loadstar
The latest skirmish in the US-China trade war could “accelerate the demise” of Hong Kong as a major transhipment port.
While the ‘phase one’ trade deal was signed in January, subsequent tit-for-tat blame rhetoric has steadily raised tensions between Washington and Beijing again.
Source: The Loadstar
Carriers have used blank sailings to cut expenses and keep rates aloft at a time when demand for ocean shipping has been sliding.
"The Group continues to adjust its capacity and logistical resources to meet the needs of its customers in order to preserve its profitability and protect its cash flows and its liquidity," CMA CGM said Monday in a press release. CMA CGM's volume was down 4.6% in the first quarter, but the company's CFO, Michel Sirat, told Lloyd’s List it expects volume to be down around 15% in the second quarter.
Maersk expected volume to drop 20% to 25% in the second quarter across all its businesses, the carrier said when it released its earnings last month.
Source: Supply Chain Dive
Politically, the U.S. and China are barely on speaking terms. Trade-wise, they’re still very much in bed together.
Cargo from China is accounting for an even greater share of inbound container volumes than before the coronavirus crisis, according to new customs data.
China flows have pushed up trans-Pacific eastbound spot freight rates this month and helped blunt volume fallout along the U.S. West Coast. In fact, the Port of Long Beach disclosed on Tuesday that it had handled 312,590 loaded inbound twenty-foot equivalent unit (TEU) containers in May, up 7.6% year-on-year and up 23.3% from April.
Source: Freight Waves
On May 14, 2020, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), the Department of State, and the U.S. Coast Guard issued a Sanctions Advisory for the Maritime Industry, Energy and Metals Sectors, and Related Communities, reflecting increased scrutiny and enforcement attention by U.S. government agencies on curbing illicit shipping practices. The advisory complements earlier guidance, providing information regarding common deceptive shipping practices as well as compliance recommendations tailored to maritime shipping-related businesses; it also updates and expands on prior OFAC sanctions shipping advisories regarding North Korea, Iran, and Syria. As a whole, the advisory warns companies what compliance measures OFAC expects companies to implement to address this threat. In light of increased sanctions enforcement across the industry, the guidance also serves as a warning to companies that they should abide by applicable sanctions regulations.
Import volumes at U.S. containerports in April were higher than the previous month, but still below the levels of last year, according to the latest Global Port Tracker report by the National Retail Federation and Hackett Associates.
U.S. ports monitored by the report handled 1.61 million 20-foot equivalent units (TEUs). That was down 7.8% from a year earlier, but up 17% from a four-year low registered in March, and notably better than the 1.51 million TEUs previously expected.
The report's authors expect to see a similar pattern for each month from May through October — higher volumes than previously forecasted, but less than the same period of 2019. Imports for the six-month period from April through September are expected to total 9.74 million TEUs, a 3% improvement from the 9.46 million TEUs expected a month ago.
Source: Supply Chain Brain
The UK government will tell the EU on Friday it is not going to seek an extension to the Brexit transition period, the paymaster general, Penny Mordaunt, has said.
She told the House of Commons in an update on Brexit talks that she and Michael Gove would “emphasise that we will not be extending the transition period” when they meet EU counterparts at a Brexit joint committee meeting on Friday.
It led to an immediate accusation of the government behaving recklessly, with the Scottish National party MP Pete Wishart accusing the Conservatives of trying to “heap misery upon misery” with Covid-19 and Brexit “the twin horsemen of the economic apocalypse” denying any prospect of recovery.
Source: The Guardian