What’s happening in and around our oceans?

This is the second edition of our weekly ocean freight update, where we highlight interesting news and background articles we came across this week. We focus on general ocean freight news, innovation, and sustainability.

The Panama and Suez Canals

Ever since the grounding of the Ever Given in the Suez Canal in 2021 the vulnerability of shipping canals is top of mind again. Some people relived the Ever Given situation as a container ship ran aground in the Suez Canal last week.

The authority said in an earlier statement that the MSC ISTANBUL, sailing under the flag of Liberia, became stranded while transiting the canal on its way from Malaysia to Portugal.

Four tugboats had been working to move it, and traffic in the vital waterway had not been affected, the statement said.

Container ship refloated in Egypt’s Suez Canal after breakdown- Canal Authority

The Panama Canal was also dealing with potential disruption this past week when there was a near-miss incident with a container ship in the Canal. 

An OOCL vessel involved in a near-miss incident while under tow through the Panama Canal may face a ‘disruption charge’, a new tariff which came into force this year.

The Panama Canal Authority (ACP) introduced the controversial new charge for vessels disrupting canal operations, and it varies by ship size, the largest neopanamax vessels facing a $250,000 fee in the event of a serious incident.

OOCL vessel has near-miss in Panama Canal as new charges come in

Rates, Newbuilds, and Containers

The rates for shipping freight across our oceans are still going down.

Spot indexes are not plummeting like they were in the second half of 2022, but they’re still inching downward week after week. The market bottom is proving elusive as transport capacity continues to exceed demand.

The spot market is signaling where annual contract rates are heading in 2023.

Contract revenues are more important to carriers’ bottom lines than spot revenues and carriers are entering this year’s trans-Pacific contract negotiation season with an extremely weak hand amid a backdrop of still-falling spot rates.

Container shipping market yet to bottom as spot rates keep slipping

While rates are decreasing, a lot of new capacity is still being added to the existing fleets.

809 vessels were added to the orderbook in 2022, a c.41% decrease from the 1,383 vessels ordered in 2021. Following the extraordinary growth in the prices of vessels ordered seen in 2021, values tailed off slightly in 2022 falling by c.7.4% to USD 87.9 bn. The 2022 figures cannot compare to the staggering increase of 124% in 2021 but have remained at high levels.

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Despite 2022 seeing a drop from the exorbitant number of vessels ordered in 2021, where 602 Container orders were placed to 364, this is still an increase of more than 200% from 2020 levels. 2022 Boxship orders amounted to USD 39 bn, 44% of the year’s total.

2022 Cargo Review: Newbuilding

The last news highlighted in this section is about new containers. As our zero-emission shipping corridor through a tunnel in Northern Colombia is specifically for containers, we especially like news items like this. We are more than happy to whisk them through our tunnel in under 30 minutes once it is finished.

Evergreen Marine Corporation has ordered 12,500 containers from Singamas Container Holdings for US$34.3 million, as the Taiwanese liner operator works towards expanding its business, despite the weak market conditions.

Evergreen splashed out on containers again

Sustainability

The shipping industry has a major impact on the world’s carbon footprint. It’s a good thing many companies are working on innovations to reduce carbon emissions.

Finnish marine technology group Wärtsilä has received its first order for carbon capture and storage (CSS)-ready scrubbers for delivery in 2023.

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The company is currently testing its CCS system at 70% capture rate and a pilot installation will take place within the next twelve months. The shipowner behind the order was undisclosed, but Wärtsilä said that CCS-ready solution would allow it for continued regulatory compliance for SOx emissions and enable smooth CCS system adoption in the future.

Boxships first to feature Wärtsilä carbon capture-ready scrubbers

Some carriers are more carbon-efficient than others. Installing CCS Scrubbers on your ships might get you higher on this list…

Yang Ming is the most carbon-efficient carrier on the Asia-Europe tradelane, according to research by Xeneta – but independent researcher Searoutes.com ranks the Taiwanese carrier second, after HMM.

What began as Xeneta’s ‘heroes and villains’ project – hastily rebranded to ‘naming and faming’ – uses Xeneta’s carbon efficiency index (CEI), a CO2 equivalent per tonne-mile measure which differs dramatically from IMO’s chosen CII measure.

Yang Ming top carrier for carbon efficiency – but not everyone agrees

Innovation

Being a tech start-up ourselves, we couldn’t agree more with what Maersk is saying.

“I think the pandemic showed what we already knew but maybe the rest of the world wasn’t aware of: how fragmented and fragile supply chains are,” El Zarkani tells Global Venturing. “Everybody suffered in the last couple of years in some shape or form and we believe the underlying cause is a lack of technology.”

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Supply chains have become increasingly global in recent years, with raw materials being transferred to other countries to be assembled into products consumed elsewhere. But the complexity of that approach, which relies on a ‘just-in-time’ structure, makes it vulnerable to delays, something that became very clear during the pandemic.

Maersk: startups are key to solving the supply chain crisis

Fast Company has issued a list of the 10 most innovative logistics companies of 2023. We’re aiming to be on the list for 2024. 😁 The list is a bit last-mile-heavy if you ask us.

Our favorite is number 8 on the list: Altana Technologies.

Altana’s platform, Atlas, uses artificial intelligence to understand a vast network of public and nonpublic data, so the world’s 500 largest enterprises by revenue as well as government agencies and logistics providers can model complex, global supply chains and build more resilient networks. 

The 10 most innovative logistics companies of 2023,

The Port of Antwerp-Bruges, is looking to the skies to, for example, monitor what is happening in the vast port area.

The Port of Antwerp-Bruges and its partners Dronematrix, Skeydrone, and Proximus received approval to start their drone in a box network D-Hive.

This means that an operational authorisation was given for BVLOS (Beyond Visual Line of Sight) automated drone flights to take place on a daily basis in the Antwerp port area.

Port of Antwerp-Bruges receives final approval for drone network

COSCO and OOCL are looking into blockchain technology to make transporting chemicals safer.

Hong Kong-based blockchain platform Global Shipping Business Network (GSBN) is collaborating with COSCO, Orient Overseas Container Line (OOCL), and the Shanghai Research Institute of Chemical Industry Testing (SICIT) to improve the safe transportation of chemical cargoes, including lithium batteries. The blockchain news comes at a time where container shipping has been hit hard by a series of accidents relating to the carriage of hazardous cargo.

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By harnessing GSBN’s blockchain-enabled platform, a new streamlined process has been designed to ensure that safe transportation certificates and the information they contain can be verified from the original source, and the information is accurate and reliable.

Chinese collaborate to harness blockchain technology for chemical cargoes

That’s all for this week!