Newsletter – October 21, 2021

AIR FREIGHT UPDATES

Airbus to expand freighter conversion lines to US, China

freightwaves.com
Airbus plans to open by year’s end a production line in the U.S. for converting used A321 passenger jets into freighters as part of an expansion strategy that will triple output by 2024 for the narrowbody aircraft and the larger A330, according to a company official.
Investments by the aircraft manufacturer, and aftermarket competitors, are designed to address rapidly growing demand from express delivery and regular all-cargo operators with heavy shipment volumes. Read more here.

OCEAN FREIGHT UPDATES

Shippers warned to brace for fuel surcharge rises

lloydsloadinglist.com
Shippers are being warned to prepare for higher bunker adjustment factors on top of already high freight rates as carriers seek to claw back rising fuel costs.
“Bunker fuel prices are impacted by the increasing energy costs globally and the recent escalations will also have an impact on rates in the coming months,” said Sea-Intelligence chief executive Alan Murphy. Read more here.

Drewry Container Market Outlook

ciffa.com
A Drewry Container Market Outlook webinar on October 19 discussed some of the highlights from the latest Container Forecaster report. The presentation provided a summary of how the container shipping industry is coping amid global supply chain turmoil. The event was hosted by Simon Heaney, Senior Manager, Container Research at Drewry, and Nilesh Tiwary, Manager, Drewry Maritime Financial Research.
World port handling is expected to increase by 8.2% this year, a downgrade on a previous guidance of 10.1% a few months ago, since when turmoil in the supply chain has worsened.
For 2022, Drewry predicts a 5.2% uplift, although rising inflationary pressures stand out as a downside risk.
According to the report, fleet growth will lag behind demand growth this year and next, but “the story will flip from 2023 onwards as the record amount of recent newbuild orders start to be delivered. The anticipated mismatch between supply and demand from 2023 presents a risk to carriers of overcapacity returning to the market. Drewry is expecting average global rates to rise by 126% in 2021. For 2022, strengthening contract rates will offset a softer spot market resulting in an overall increase of about 6%,” the webinar stated.

Oakland pitches for boxes as other North American terminals clog up again

splash247.com
Just like the ebbs and flows of tides, congestion is back up at many of North America’s top gateways leading one opportunistic port to pitch for more work.
Once again there are more than 70 container vessels in the water outside Los Angeles and Long Beach, showing that the gradual improvement over the past few weeks has been undone. Read more here.

Alibaba makes waves on the transpacific

Alibaba is taking the transpacific trades by storm, fixing ships fast to move its own boxes while also shifting more and more containers with Israeli partner carrier ZIM. However, the growing shift into ocean logistics has not been all plain sailing for China’s largest e-commerce player.
Singapore-based Transfar Shipping is one of the transpacific’s newest entrants, having shelled out huge sums to charter in ships of up to 3,091 teu in size. Transfar is owned by Chinese 3PL Worldwide Logistics, a company which Cainiao, Alibaba’s logistics arm, bought a 10.33% stake 13 months ago. Read more here.

GROUND AND RAIL FREIGHT UPDATES

CN Rail launches global search for new CEO as Ruest plans exit

bnnbloomberg.ca
Canadian National Railway Co. said Chief Executive Officer Jean-Jacques Ruest plans to retire by the end of January, handing an apparent victory to a major shareholder that had been pressuring him to step down.
The surprise announcement comes one day after TCI Fund Management Ltd., CN’s second largest holder, released a presentation on its plans for change at the railway. TCI argues that CN must “urgently” take measures to improve efficiency and profitability.  Read more here. Read more here.