What We're Reading: BDP Trendwatch Week 34

Container Ship Panama Canal

Panama Canal shipping rebounds in hopeful sign for global trade

The Panama Canal is seeing signs of a rebound in global trade as ship transits recover from the depressed levels caused by the pandemic.

Total transits through the waterway rose to 933 in July, from 845 in June, which was the fewest since the canal opened an expanded set of locks four years ago to accommodate bigger ships.

Initial August numbers show further improvement, Canal Authority Deputy Administrator Ilya Espino de Marotta said in a phone interview.

Container shipping between the U.S. and Asia, the canal’s most important route, began to increase this month, she said. But cruise ships continue to cancel their slots, and the trade in Liquid Natural Gas may also take more time to recover, she added.

Source: AJOT

 

China’s rail shipments to Europe set records as demand surges for Chinese goods amid coronavirus

The volume of China’s belt and road railway cargo to Europe has set records for five consecutive months as Covid-19 has limited transport by air and sea while causing an increase in the demand for Chinese-made medical supplies abroad, according to the China State Railway Group.

The latest figures from the state-owned railway builder, also known as China Railway, showed that a total of 1,232 trains were arranged from different Chinese cities to European destinations in July. It was the highest monthly figure ever, and an increase of 68 percent from a year earlier.

Source: South China Morning Post

 

California ports benefit from retailer restocking as imports bounce back

The major ports in California saw increased numbers during July in terms of container volumes. Long Beach, Los Angeles and Oakland achieved high performances in a period when Covid-19 pandemic's second wave seems closer than ever.

Port of Long Beach (POLB) celebrated a new all-time record, as July was the busiest month in the 109-year history of the port. Terminal operators and dockworkers moved 753,081TEU, topping a record set two years ago (June 2018).

"It was a good month, a bright spot, in the midst of the devastating effects of the coronavirus on the economy," commented Mario Cordero, Port of Long Beach (POLB) executive director.

Source: Container News

 

Q&A: COVID, the rise of China, and the future of ocean shipping

It’s getting really weird out there in the ocean shipping markets. Global oil demand collapses yet oil tanker rates spike. Tanker profits soar yet stock investors flee. Unemployment surges and businesses fold yet imports flood into ports and container rates skyrocket.

The COVID-19 pandemic has made the ever-confounding task of forecasting shipping markets more confounding still.

For insight on what’s next, FreightWaves interviewed Peter Sand, chief shipping analyst at BIMCO. Sand, based in Copenhagen, is one of the industry’s most respected prognosticators. BIMCO is the world’s largest association of shipowners, charterers, shipbrokers and agents.

Source: Freight Waves, American Shipper

 

Brexit talks resume with just seven weeks left to reach a deal

U.K. and European Union officials have the next seven weeks to find something that has eluded them since March: an agreement over their future relationship.

After a brief summer hiatus, face-to-face discussions will resume in Brussels on Tuesday. Over dinner, Prime Minister Boris Johnson’s top negotiator, David Frost, will discuss a path to a deal with Michel Barnier, his EU counterpart. Then, about 50 officials from either side will thrash out the technicalities on Wednesday and Thursday before the two chiefs reconvene Friday morning.

Britain and the bloc want to reach an agreement before the negotiations are scheduled to conclude Oct. 2 — but, so far, neither has made adequate concessions for the other. Each is waiting for the other to blink first, according to officials in both camps. Given that, there is little prospect of a breakthrough this week, said one EU official, who spoke on condition of anonymity because the talks are held in private.

Source: Supply Chain Brain, Bloomberg

 

Calls intensify for government to step in to end Montreal port strife

As the indefinite strike by longshoremen at the port of Montreal enters its second week, calls have intensified for the Canadian government to step in and end the conflict.

Ministers of the provincial governments of Quebec and Ontario asked the federal government to intervene in the stand-off, warning of dire consequences for the national economy.

Longshoremen at the port, who have been without a contract since December 2018, have held a series of strikes since early July, which escalated to an indefinite industrial action a week ago.

Source: The Loadstar

 

Asian lines record Q2 profits as cost-control pays dividends

Liner operators Evergreen Marine Corporation, Wan Hai Lines and Regional Container Lines (RCL) all reported profits for Q2 as blanked sailings and lower bunker costs mitigated the impact of reduced cargo volumes.

Evergreen recorded a net profit of TW$3.19 billion (US$108.28 million) and Wan Hai made a net profit of TW$1.68 billion (US$56.82 million).

The Covid-19 pandemic tested the liner industry’s ability to practise capacity discipline and route configurations.

Source: Container News

 

WorldACD: Normality in air cargo still a long way off

The latest data from WorldACD suggests that normality is still a long way off for the air cargo industry.

The data provider said that the demand side of the industry was slowly improving, with volumes in July up 8.2% compared with June.

However, demand is still down by 18.5% year on year, there is a “huge capacity drop” on last year and the price of air cargo is 62% up compared with 2019 levels at $2.83 per kg (in June the figure stood at $3.12 per kg).

“There is such a lack of capacity in the market that ‘normality’ still seems a long way off,” WorldACD said.

Source: Air Cargo News

 

Hong Kong and Singapore battling COVID-19 despite increased rules

Fears over the further spread of the coronavirus had prompted both Hong Kong and Singapore to once again tighten their rules related to crew changes and ship movements in and out of their ports. Despite the efforts by authorities in both ports, they are nonetheless confronting new clusters of the virus.

Over the weekend, Hong Kong’s public health authorities went public regarding a large and growing cluster of the virus at the territory’s primary container port. About a week ago, the authorities began listing the Kwai Tsing Container Terminal as one of the areas with a cluster of the virus. At first, they reported 10 cases of COVID-19 but according to the Hong Kong Standard, it has grown to a total of 65 cases tied to the port as of today, August 17. 

Source: The Maritime Executive

 

American Airlines to conduct 1,000 cargo-only flights in September

American Airlines will fly 1,000 cargo-only flights in September after only returning to all-cargo operations in March.

The airline re-launched cargo-only flights in March, with 20 strategic flights to two key destinations. The airline’s last freighter flight took place in 1984.

“A plan that began as an experiment has now grown exponentially over the last six months,” the airline said.

Source: Air Cargo News

 

Pacific services on a bull run in a tricky China trade

According to the Organization of Economic Co-operation and Development (OECD)’s latest Economic Outlook for 2020, the pandemic could over the course of this year follow two differing developmental paths, the virus could recede under control from Government, or it could rapidly erupt into a second wave.

Neither scenario is palatable, and neither will lead to greater economic activity as a result, as the OECD points out.

“Both scenarios are sobering, as economic activity does not and cannot return to normal under these circumstances. By the end of 2021, the loss of income exceeds that of any recession over the last 100 years, outside wartime, with dire and long-lasting consequences for people, firms and governments.”

Source: Container News