by INTERNATIONAL FREIGHT TRANSPORT, INC.
In This Issue...
Low Rhine River Levels Impact Shipping
CMA CGM Introduces Low Sulphur Surcharge in China
Number of Crew Members Held Hostage Increasing
Shippers are finding it increasingly difficult to transport cargo on German inland waterways due to the record-low water levels in the Rhine River. As a result of this, an already tight European trucking market is struggling to handle a huge spike in demand.
The Rhine River is currently lower than the previous record low levels set in 2003. The dry spell that began in August and has extended through October, has caused barges to be unable to travel past Ludwigshafen, south of Frankfurt. Forecasts point to little expectation that river levels will rise before the heavier rains that are predicted for mid-November.
While the Asia-Europe trade is in its slow season, that still means that roughly 25 percent of containers entering Europe's two busiest gateways of ports of Rotterdam and Antwerp are shipped along the inland waterways. The supply chain director for a German importer using the ports of Rotterdam and Antwerp said the low water was a serious concern for his company. "We only go as far as Duisburg and luckily we can still manage, but I don't know for how long".
Barge operators have been forced to dramatically reduce capacity on the vessels or cancel services to certain areas. Water levels, the degree of loading of barges, and freight rates are closely linked, and when water levels fall below a certain threshold, the cost of transport rises and freight rates increase more strongly. Subsequently, there is growing pressure on road freight that has been short of capacity all year. Atlantic Container Line (ACL) said in a customer advisory that the low water meant the intermodal provider would not have the ability to offer barge-truck moves, even as shipper requests for truck transport has quadrupled for the next few weeks.
"All one-way truckers are fully booked for the next couple of weeks as this is a general issue in the market," ACL said. The advisory noted that, "guaranteeing carrier haulage delivery and pick-ups on a timely basis as part of a through rate is extremely difficult. Accordingly, please note ACL cannot be held responsible for any third party costs that may be associated with our inability to secure adequate truck power to deliver or collect shipments, or spot containers."
These costs could include storage fees, additional warehouse labor, and demurrage.
Some carriers have been charging a low-water surcharge on full containers in the summer, as the intermodal operators have been unable to fully load their barges because of the shallow draft. But, as of October 19, one carrier said its barges can no longer safely navigate the river and it has now discontinued barge activities on the Upper and Middle Rhine.
Felix Heger, head of ocean freight Europe for DHL, said river levels were at all-time lows and barge operators were now at or below 30 percent of capacity with some services stopped entirely.
"Of course this is pushing the demand for rail and road haulage, and hence road haulage availability and rates," he said.
Set to begin on November 15, 2018, French container shipping company CMA CGM will implement a low sulphur surcharge from/to the ports of Shanghai and Ningbo in China. The 0.5% sulphur limit is applicable to these ports since October 1, 2018.
According to CMA CGM, the move comes in an effort "to ensure the sustainability and reliability of our (CMA CGM's) services in a challenging environment."
Other ports in the People's Republic of China will also incorporate the 0.5% sulphur limit, applicable as of January 1, 2019. A few years ago, Chinese authorities decided to introduce sulphur limit for ships operating within three domestic emission control areas (ECAs). The country has been implementing in phases the low sulphur requirement for ships calling at its eleven core ports.
The International Maritime Organization's (IMO) Marine Environment Protection Committee (MEPC 73) adopted last week the MARPOL amendment to prohibit the carriage of non-compliant fuel oil on board ships. As of January 1, 2020, ships will be banned from burning any marine fuel with a sulphur content above 0.5 pct. The exception will be ships fitted with exhaust cleaning technology, the so-called scrubbers.
The first nine months of 2018 saw a total of 156 incidents of piracy and armed robbery against ships according to a report by the ICC International Maritime Bureau's (IMB) Piracy Reporting Centre (PRC). This is in comparison to 121 for the same period in 2017.
Out of the 156 incidents, 107 vessels were boarded, there were 32 attempted attacks, 13 vessels were fired upon and four vessels were hijacked. There were no vessels reported as being hijacked in the third quarter of 2018. According to IMB's PRC, this is first time since 1994 that no vessel hijackings have been reported in two consecutive quarters.
It was reported that the number of crew members held hostage increased in comparison to the same period in 2017-from 80 incidents to 112 by the third quarter of 2018.
"While the record low number of hijackings in the second and third quarters of 2018 is of course to be celebrated, incidents of maritime piracy and armed robbery remain common. ICC urges governments to leverage the timely data available from the IMB Piracy Reporting Centre to concentrate resources in these hotspots," Pottengal Mukundan, Director of IMB, said.
The Gulf of Guinea statistically accounts for 57 of the 156 reported incidents. While most of these incidents have been reported in and around Nigeria (41), IMB said that the Nigerian Navy has actively responded and dispatched patrol boats when incidents have been reported promptly. There has also been a noticeable increase in the number of vessels boarded at the Takoradi anchorage, in Ghana. Based on the IMB's reporter, 37 of the 39 crew kidnappings for ransom globally have occurred in the Gulf of Guinea region, in seven separate incidents. A total of 29 crew members were kidnapped in four separate incidents off Nigeria-including a 12-crew kidnapping from a bulk carrier off Bonny Island, Nigeria in September 2018.
In other world regions, incidents of piracy and armed robbery are comparatively a much less frequent occurrence. No new incidents have been reported off the coast of Somalia in the third quarter of 2018, while two fishermen were reported kidnapped off Semporna, Malaysia in September 2018.
Incidents in the remaining regions, including some Latin America countries, border on low-level opportunistic theft.
Did You Know...
Our IFT staff has the capabilities of assisting our customers in various languages such as English, Korean, Chinese (Mandarin), German, Finnish, Spanish, Polish and Russian. We pride ourselves in being able to help our customers in their own language along with knowing the cultural background of different countries.
In the Industry
Trends In European Shipping
For the better part of ten years, European carriers weren't able to take advantage of the lower oil prices due to weak demand coupled with overcapacity that brought freight rates to record lows.
After six straight years of losses, 2017 finally saw container carriers post a profit. Unfortunately, the recovery of demand coincides with an increase in oil prices. Oil prices have risen to their highest levels in four years. Increasingly there is talk of the price reaching as high as $100/barrel, particularly with tensions rising between the US and Saudi Arabia.
Drum Roll, Please IFT is currently in the operation of transporting equipment used in the food processing industry from the US to India. The machines, drum dryers, are used for drying highly viscous fluids and pastes. The drum is heated on the inside to remove moisture in the process of drying products for packaging. Such a large machines require special handling in the shipping. The dryers stands approximately 7 feet tall and has a length of about 24 feet. The formidable units also weigh in at over 50,000 pounds each. They were loaded onto flat racks for the journey that will bring them from the northwestern US to their final destination in eastern India.
New At IFT
IFT is currently in the process of importing a large piece of equipment originating in Italy. The cargo, a metal cutting shear, is marked for delivery to the State of Oregon in the US.
The oversized unit, an important machine utilized by the steel and associated industries, required some special planning and the experience that IFT always brings to bear was well up to the task.
The cutting machine, weighing in at approximately 80 tons, requires the use of a 40 foot open top container for transport. Due to these specifications, IFT needed to hire a trailer that would be able to handle the equipment, and a 350 ton crane to get the equipment seated on the trailer and aboard the vessel for the ocean going leg of the journey.
Once aboard the ship in Italy, the sea voyage will take it to the port in Corpus Christi for unloading. From Texas, the machine will make it overland on it's way to Oregon.
Joke of the Month
Sarah: "Whenever one door closes another one opens!" Farrah: "That's nice, but until you fix it, I'm not buying this car." Q: What's the saddest dog? A: The melancollie. Boss: "Wages are $12 an hour. After six months that goes up to $18. When can you start?" Ross: "In six months." Joe:"Somebody's been adding layers of dirt to my garden!" Moe:"So...the plot thickens!"
Our Prized Customers
We here at IFT appreciate our customers for all they do during the year. As our way of showing you, we are holding a prize drawing. It's nice and easy. All you need to do is click on the link below and then fill out the form on our website. It will just take a minute, and hey you never know!
Good Luck to all who participate!