Newsletter – June 29, 2021

OCEAN FREIGHT UPDATES

CMA CGM suspends Le Havre calls amid congestion

lloydsloadinglist.com
CMA CGM said it plans to stop calling at the French port of Le Havre for three months, citing congestion.
The French container line said the move was to maintain the quality of its Eurosal service, which connects northern Europe with the west coast of South America and the Caribbean.
CMA CGM told customers that heavy congestion and lack of productivity had affected the route’s reliability. Read more here.

Extreme Freight Rates Begin to Change Shippers’ Calculations

maritime-executive.com
The containerized shipping industry has been essential to global commerce for its low shipping costs. However, high freight rates are starting to have an impact on consumer goods. Already, consumers have started to feel the pinch of the surge on items such as furniture and coffee. Along the transpacific route, Alan Murphy, CEO of Sea-Intelligence recently estimated that freight rates for assembled furniture now account for a whopping 62 percent of the total retail value. It’s the same case for large appliances, for which up to 41 percent of the retail price is the shipping. As container rates continue to rise unabated, these commodities might be priced out: their thinner margins make it impossible to absorb rising costs. Read more here.

Box Rates Up 332% Year on Year, Schedule Reliability Hits Dire New Lows

splash247.com
Shippers might be paying 332% more per box that they were this time last year, according to the latest data from Drewry, yet they’re having to put up with the worst schedule reliability in the history of containerization.
In the first five months of 2021, 401 vessel arrivals on the transpacific and 144 on Asia-Europe were over 14 days late, according to data from Sea-Intelligence. Putting these numbers in perspective, the combined 2012-to-2020 total of such late vessel arrivals was 388 on the transpacific and 69 on Asia-Europe. Read more here.

Demurrage and detention charges double in a year

lloydsloadinglist.com
Demurrage and detention charges imposed on shippers by containers lines have soared at unprecedented rates globally over the last year – more than doubling, on average, at the world’s 20 largest container ports – according to the Demurrage & Detention Benchmark 2021 report published today by Container xChange, a leading global online platform for the leasing and trading of shipping containers. Read more here.

HMM orders 13,000 teu series to take fleet past the 1m slot mark

splash247.com
South Korean flagship HMM has signed newbuilding contracts with Daewoo Shipbuilding & Marine Engineering (DSME) and Hyundai Heavy Industries(HHI) for twelve 13,000 teu container vessels, at a total cost of $1.57bn. The orders will take the HMM fleet past the 1m slot mark for the first time.
Under the agreement, DSME and HHI will build six vessels each, all scheduled for delivery in the first half of 2024. All ships will be installed with hybrid scrubbers and designed to be LNG-ready. Read more here.

INTERNATIONAL BUSINESS – GOVERNMENT UPDATES

The Upheaval In Order Fulfillment Processes

forbes.com
It is no exaggeration to say that the COVID-19 pandemic caused an upheaval in order fulfillment processes. The question today is to what degree did these changes occur and how will processes change in the future. Will they revert back to the prior state as if the pandemic never occurred? Will they continue along the same trajectory brought about during the pandemic? Or will the processes be a mix of both, and how so? Read more here.

Chip Shortage Will Get Worse, Intel CEO Says

ttnews.com
Intel Corp. CEO Pat Gelsinger predicted the shortage of semiconductors that’s hurting industries from automotive to consumer electronics will bottom out in the second half of this year before starting to improve.
“I don’t expect the chip industry is back to a healthy supply-demand situation until ’23,” he said in an interview. “For a variety of industries, I think it’s still getting worse before it gets better.” Read more here.

US government in legal move that could sever Amazon from its logistics arm

theloadstar.com
Amazon’s logistics arm, built around its Fulfilment By Amazon (FBA) product, is in danger of being cut off from its online marketplace.
Legislation by the US government that could pave the way for such a move advanced in Congress last week, when the House Judiciary Committee voted narrowly in favour of the Ending Platform Monopolies Act.
The bill, co-sponsored by representatives from both major parties, aims to “eliminate the ability of dominant platforms to leverage their control across multiple business lines to self-preference …Read more here (login required).