What’s happening in and around our oceans?
This is our weekly ocean freight update, highlighting interesting news and background articles we came across this week. We focus on general ocean freight news, innovation, and sustainability.
General Ocean Freight News
As we are creating an alternative shipping route to the Panama Canal, we closely follow the developments of the world’s largest canals. Good news for the Suez Canal.
The Suez Canal has recorded its highest-ever monthly revenues in March, hitting $832.2, up 38.5% from $601.7 million in the same month of 2022, Al Mal reported on April 5th, citing data from the Suez Canal Authority (SCA) and Egypt’s Information Portal.Suez Canal records highest-ever monthly revenues in March
In China, container depots are filling up as exports from China are slowing down.
Container xChange’s latest report suggests China’s container depots are working at 90% utilisation, adding: “Oversupply makes it harder for the depots to move boxes. And because depots make money by moving these boxes, as opposed to storing them, the current circumstances are rendering the depots inefficient in both operations as well as revenue generation.”
The increasing number of idle containers at terminals does not only mean ports are getting congested, but repositioning empty containers has become more expensive and inconvenient, making it difficult for the NVOCCs and shipping lines to open new markets globally.China’s container depots fill up as exports feel the pinch
At the same time, cargo throughput is still on the rise.
China’s major ports and rail lines rebounded strongly in the first quarter of 2023 as the nation emerged from the pandemic.
Analysts said that the rebound was driven by rising domestic consumption, upgraded transport services and improved market expectations, despite high global inflation and weak demand abroad.
There is a clear trend showing the Chinese economy is rapidly recovering and the growth in cargo transport is a direct reflection of the growth, He Dengcai, deputy director of the China Federation of Logistics and Purchasing (CFLP), told the Global Times on Sunday.Cargo throughput, profits of ports, railways, cranking up in Q1 in China
The market is still positive about the future because demand for newbuilds is increasing.
Higher prices and lower earnings haven’t deterred ship owners from investing in the newbuilding market. In its latest weekly report, shipbroker Allied Shipbroking said that “with dry bulk, tanker and gas markets remaining firm, and container operators continuing to invest in alternative-fuelled vessels despite waning earnings, last week saw a fair amount of deals across sectors coming to light.Demand for Newbuildings Increases, Despite Higher Prices
The world’s largest owner of containers has just been sold.
Toronto-based Brookfield Infrastructure Partners is buying Triton International, the world’s largest owner of containers, for $4.7bn.Box giant Triton sold for $4.7bn
And the container lines are showing lower numbers but are still above pre-COVID levels.
Early numbers on the first quarter are starting to trickle in from container shipping lines. They show a big step down from the fourth quarter, but they also confirm that earnings are still well above the pre-COVID “normal.”
Spot rates in the trans-Pacific eastbound market have collapsed, yet carriers continue to be shielded by annual contracts signed in 2022. Meanwhile, spot rates in the trans-Atlantic westbound market remain much higher than they were prior to the pandemic.
Average revenue per forty-foot equivalent unit — the big driver of container shipping net income — remains higher than it was before 2020.Container lines still up vs. pre-COVID despite fall from peak
Something to keep an eye on. The number of port strikes is increasing.
The number of port strikes around the world has been growing over the past year, causing headaches for supply chain providers as well as distress for seafarers denied shore leave.
The number of protests and strikes affecting port operations quadrupled last year to 38 incidents, according to Crisis24, a maritime security consultancy. From trucker stoppages in South Korea to dock strikes in Britain, worker shortages have prompted shipping lines to divert or delay cargoes globally.
With the cost of living crisis affecting most nations, strikes at ports have proliferated in the opening months of 2023, especially across Europe.Port strikes take their toll on supply chains and seafarers
Sustainability & Innovation
An interesting read on green shipping:
Shipping is the most carbon efficient means of transportation (on a CO2 per ton-km basis – …). However, global shipping still accounts for 1 billion tons of CO2 per year, which is ca.3% of annual global GHG emissions.
To reach a 1.5°C scenario the sector drastically needs to decarbonise. In a business-as-usual scenario, the OECD forecast maritime trade volumes to triple by 2050, bringing with it up to 250% increase in CO2-equivalent emissions.
It will require between $1–1.4tn of cumulative investment across the shipping industry and its value chain, to reach the IMO’s target of reducing absolute emissions by at least 50% by 2050 (or $50–70bn annually between 2030–2050). To fully decarbonise the industry, cumulative investment between $1.4–1.9tn will be required between 2030–20509.
These estimates are based on a scenario in which ammonia becomes the primary zero carbon fuel choice. However, even if other fuels such as hydrogen or e-methanol become more dominant, the magnitude of investment needed does not significantly change.Green shipping: a $1.9tn investment opportunity?
The major shipping lines are already working on lowering their carbon emissions by using alternative and greener fuels. Some examples:
HMM reduced the CO2 emissions generated when transporting 1 TEU of container for 1km to 29.05g in 2021, from 68.7g in 2010, representing a reduction of 57.7% over the last decade.
This result has been achieved amid a more than two-fold increase in fleet capacity, from 337,407 TEUs to 755,209 TEUs, in the same period.
HMM said it has constantly upgraded its fleet by securing energy-efficient mega-vessels and has also improved its operational efficiency by optimising service routes, speeds, and cargo stowage.HMM cuts carbon emissions by half in last decade
French carrier CMA CGM has placed orders for 16 dual-fuel containerships at China State Shipbuilding Corporation (CSSC) in a record deal worth around $3.06bn.
The world’s third-largest liner has booked a dozen methanol powered 15,000 teu units and a quartet of 23,000 teu LNG-fuelled ships in what is being called the biggest order for large boxships in the history of Chinese shipbuilding.CMA CGM signs for $3bn worth of methanol and LNG powered boxships in China
Carbon dioxide capturing on board ships is also a way to lower emissions.
The Global Centre for Maritime Decarbonisation (GCMD) has awarded its concept study on offloading liquefied CO2 (LCO2) captured onboard ships to Lloyd’s Register, supported by their partner Arup.
The Singapore-based GCMD concept study will address safety and operational considerations surrounding offloading of LCO2 that has been captured onboard tankers, bulkers and container liners, including articulating the temperatures and pressures under which this process would optimally take place and the different receptacles to be used for this purpose. The outcome of the study can also provide insights for off-loading CO2 as a cargo under currently less-established operating and storage conditions.Liquefied carbon dioxide offloading concept study gets underway
That’s all for this week!