2016 port freight statistics are encouraging

According to the Department for Transports recently published 2016 final figures, total freight tonnage handled by UK ports declined by 3% in 2016. This decline is attributable to a large reduction in demand for coal imports. Despite this, steady growth has been experienced in unitised traffic, which saw its fourth consecutive year of growth in 2016.

* total tonnage decreased by 3% to 484.0 million tonnes
* coal handled showed the biggest decline of any cargo category more than halving to 12.0 million tonnes
* liquid bulk goods, which account for 40% of total tonnage, decreased by 2%
* crude oil handled has halved since 2000, to 87.1 million tonnes
* unitised traffic rose by 2% to 24.1 million units
* container units reached a record high of 5.9 million units
* overall roll-on roll-off traffic rose 1.4% to 18.2 million units
* the volume of import and export motor vehicles increased 1% to 4.5 million units
* 18.2 million Ro-Ro units passed through UK major ports via roll-on roll-off services, up 1.4% compared to 2015.
* 10.2 million TEUs of LoLo container traffic passed through UK major ports in 2016, up 4% from 2015. Felixstowe had a 0.3% increase to 24.8 tonnes.
* Maritime freight with the European Union grew 2% to 206.8 million tonnes in 2016, and accounted for 44% of all tonnage through UK major ports.

In 2016, major port tonnage fell whilst minor port tonnage increased . There are 51 major ports in the UK. UK major port tonnage fell by 3% in 2016 to 472.8 million tonnes. The major port share of UK port tonnage has remained stable at 98% since 2005. Minor port tonnage increased to 11.3 million tonnes, an increase of 3% on the previous year.

Overall domestic major port traffic – coastwise and one-port – fell to 98.6 million tonnes in 2016, a drop of 5% from 2015. However, one- port traffic, rose 13% to 20.0 million tonnes in 2016.

The proportion of domestic traffic c carried by UK registered ships increased 3% in 2016, to 23.5 million tonnes. This makes up 24% of all UK domestic traffic.

Imports made up 56% of all tonnage handled between the UK and EU countries. UK major ports received 116.6 million tonnes from countries in the EU in 2016, an increase of 4% compared to 2015. Among EU countries, the highest amount of imports was from the Netherlands, 31.5 million tonnes, 10% higher than 2015. Freight received from ports in the Netherlands now makes up over a quarter of all inward tonnage from the EU.

In contrast, exports from the UK to the EU fell 1.6% between 2015 and 2016, down to 90.1 million tonnes. This is due, in part, to a fall of 11% in exports to both France and Germany, primarily driven by falling liquid bulk imports. In contrast, exports to Italy nearly doubled to 1.8 million tonnes, with an increase in crude oil imports from 0.4 million tonnes in 2015 to 1.3 million tonnes in 2016.

Container traffic with the European Union rose 8% in 2016 to 2.0 million units. In terms of twenty-foot equivalent units (TEUs), container traffic rose 9% to 3.6 million TEUs.

Container traffic between the UK and International deep sea destinations rose to 5.3 million TEUs, up 3% from 2015.
China is our largest partner for container traffic in 2016, resulting in 2.5 million TEUs, up 3% from 2015. This makes up 47% of all deep sea LoLo handled by UK ports. Second place is taken by the USA which contributes 0.4 million TEUs to our container traffic; this is 8% of all deep sea LoLo trade.

The full report can be found here

 

container port Southampton

Southampton on the list of top container growth in 2016

During 2016 126 ports handled more than 1 million teu containers.

According to DynaLiners report entitled millionaires roundup, 82 ports had experienced growth in the year with 5 ports showing growth of 25% or more.

These ports were Chittagong, Bangladesh (26%), London (26%), Salalah, Oman (29%), Tangshan, China (27%) and Southampton (26%).

14 ports reached over 10m teu. These included Antwerp, Belgium; Busan, South Korea; Dubai, UAE; Hong Kong; Kaohsiung, Taiwan; Port Kelang, Malaysia; Rotterdam, Netherlands; Singapore and Tianjin, Shenzhen, Guangzhou, Ningbo, Qingdao and Shanghai, China.

New entrants to the table included Itajai with 1,104,100 teu and growth of 12%, Izmit with 1,143,000 teu and growth of 16%, Port Qasim with 1,124,000 teu and growth of 16% and Qinzhou with 1,138,000 teu and growth of 24%.

No ports dropped out of the table but 43 saw negative growth on 2015, of which Freeport (Bahamas) recorded the largest decline of -14%. Lagos and Port Said each had a 12% decline, Santos had a 10% decline, Tanjung Pelepas had a 9% decline, Hai Phong had an 8% decline, Lianyungang had a 7% decline, Long Beach had a 6% decline and Kingston had a 5% decline.

The total teu handled by the ports was 589,350,800, with other ports not on the list accounting for 117,649,200.

China topped the list of teu growth by country in 2016, maintaining its position from 2015.

The Far East, North Europe and North America retained position one, two and three respectively from 2015, with the Far East seeing a 2% YoY growth, 3% for North Europe and 1% for North America.

Of the terminal operators included in the data, PSA remained in first place with 56,300,000 teu, growing 6%, Hutchinson Ports also maintained second place but with a 3% dip in growth, followed by APM Terminals also staying at number three with a 3% growth. DP World was fourth, keeping its rank but with zero growth, Cosco Shipping Ports also stayed at number five with a 4% growth.

The report took into account full and empty, loaded and discharged, including transhipment containers. It noted that “Chinese port statistics often include (large) unknown quantities of containerised river cargo. Without these, some of them might even not qualify for millionaire status.”

• Source: Port Strategy

low tariffs after brexit

Low tariffs post Brexit for British Manufacturers and Retailers

According to the Freight Transport Association (FTA) the government’s commitment (announced on 26 June 2017) to securing existing duty free access to UK markets for 48 of the world’s developing nations will ensure that British manufacturers and retailers can continue to trade efficiently and profitably. These agreements should ensure that the price of household items, ranging from textiles to tea, can be maintained at pre-Brexit levels.

Alex Veitch, Head of Global Policy at FTA says “Imports of many of our staple household items, which reach our shores in bulk shipments from around the globe, currently benefit from reduced or zero tariff agreements.  These keep prices stable, both for retailers and for manufacturers – a key requirement when other areas of the economy are currently more volatile.  FTA lobbying of government has been relentless in the past year on behalf of the members of the British Shippers’ Council, to ensure that their opinions have been considered, and we look forward to working with the Department for International Trade in the coming months to ensure that the nation’s shopping basket continues to be as affordable as possible.”

Since the EU referendum announcement, FTA has met representatives from the Department for International Trade on three occasions to discuss the priorities of the logistics sector.  “Today’s announcement is good news for British retailers, and great for developing countries.  Trade policy is set by EU member states, so after Brexit the UK will be free to chart its own course.  By committing to a policy of duty-free access to UK markets for these states, the government has stated its intentions to ensure that Britain will keep on trading outside the European Union.

As an EU member, the UK and companies based here can sell their goods freely to customers anywhere else in the EU without those customers having to pay additional taxes to import those goods. British consumers and companies can also import from elsewhere in the EU without tariffs.  The EU also has agreements allowing free trade with countries such as Norway, Switzerland, South Africa and South Korea. Outside the EU, the UK will need to strike new deals in order to have free trade with those countries or the remaining EU members.

According to analysis by Civitas, if the UK leaves the EU without a trade deal UK exporters could face the potential impact of £5.2 billion in tariffs on goods being sold to the EU. However, EU exporters will also face £12.9 billion in tariffs on goods coming to the UK.

Brexit is still making its mark on the logistics industry, and the period of uncertainly means that global trade is at a transition. The UK will have to feel its way, and hope that the agreements made stay in place to ensure that we are in a strong position to trade.

shipping alliance

The new shipping alliances are in place. How are they impacting?

The changes in shipping alliances recently put in place have have already had a big impact on European ports. Coming into effect on April 1st, shippers have experienced significant changes in their carriers’ service networks. On the trans-Pacific trade alone, the alliances will offer 18% fewer direct routes and 33% of the routes will have transit times that are shorter or longer by three or more days compared to the member carriers’ alliance offerings before April.

Rotterdam is feeling the change the most. According to CargoSmart, the Hong Kong based shipment services provider, Rotterdams services from the alliances have fallen by 3 to 23, but the number of vessels passing through and being deployed has increased by 30.  Southampton, Antwerp and Hamburg have also seen the number of deployed vessels increase by 18, 16 and 13 respectively.

Felixstowe have seen a decrease in services through the port by 21, and Bremerhaven by 17.  Bremerhaven has also seen the average vessel capacity rocket by 1000 ten, and Southampton and Le Have have both seen capacity jump by 1200 teu.

Hamburg Port Authority chief executive Axel Mattern, speaking to Container Shipping & Trade said that berth availability and hinterland connections are “key factors” when it comes to dealing with the new alliances and their services. “The challenges with the big ships are on the navigational side. You need to be able to cope with the volumes which are being churned out from all of these big ships. Facilities need to handle all these volumes in a very limited time frame. They are not designed for the storage of containers. They are designed for perfect handling. That is the challenge. You need the capability to enable the volumes to flow.”

According to the Wall Street Journal, American farmers are concerned that the restructuring will make it far harder for them to deliver US commodities abroad. Port calls have been falling since before the new alliances formed, though. Sailings to U.S. ports from Asia recently were running at a weekly rate of 57, down from 65 four years ago, according to Alphaliner, which tracks such activity. However, with larger vessels coming into use, overall capacity has risen 4% to the U.S. West Coast and 22% to the East Coast in that same period, the data show.

With the alliances only having been in place for less than 3 months, the full impact is yet to be seen. Vessels into ports and numbers of containers are bound to fluctuate whilst the alliances find their feet, but with less capacity and demand always changing, it will be interesting to see how the changes affect the ports long term.

Eurotunnel

Eurotunnel unveil 3rd generation freight shuttles

Eurotunnel brought 3 new freight shuttle carriers for lorries into service at the end of April. They will provide 20% more capacity and mean that Eurotunnel can offer up to 8 departures an hour at peak times instead of the current 6.

With a cost of 40 million euros, this could be seen as a strong investment in the future. The order is supported by a €30 million programme of investments in the expansion of the terminals in Folkestone and Coquelles which will ensure the fluidity of traffic across the Eurotunnel site.

Each carrier is 800m long with 32 flat carrier wagons, three loading wagons and a coach for the lorry drivers. The hope is that they are more aerodynamic, and much lighter than the previous generations.

Demand for Eurotunnel’s Le Shuttle freight service between France and the UK is expected to grow as a result of many companies attempting to reduce their carbon footprint. Eurotunnel aim to be transporting two million trucks a year by 2020.

Jacques Gounon, Chairman and Chief Executive Officer of Groupe Eurotunnel SE, said:”With the entry into service of three new freight shuttles, for the first time since January 1999 Eurotunnel starts a new phase of its development by offering, on top of the speed of crossing, an unrivalled frequency of departure.”

The shuttles went through a rigorous final testing phase in February, consisting of 80 loaded and uninterrupted crossings through the tunnel. A shuttle was loaded with 32 trucks, each filled up with water containers, so that each weighed between 36 and 39 tonnes, to create a realistic test environment.

Michel Boudoussier, Chief Operating Officer – Concession of Groupe Eurotunnel stated: “As the world leader in the rolling motorway industry, Eurotunnel has been able to draw upon its 20 years of experience in the design of these 3rd generation Shuttles. The consultation that we led confirmed that we are at the leading edge of railway development”.

air freight

Space issues causing trouble for shipping routes

Unusually tight capacity for the time of year is leading to rising rates, booking restrictions and backlogs for European exporters needing to ship from Europe to the Middle East and Asia.

This is in part attributed to exceptionally high levels of post Chinese New Year shipping cancellations, which have meant price increases for Europe to Asia container rates.

At this point, all bookings are being honoured, even though there seems to be a perception that this isn’t the case.

Hapag-Lloyd have introduced a US$200 peak season surcharge (PSS) for containers from Europe North Continent to East Asia, effective for sailings as of 15 March and valid until further notice. Many forwarders are recommending at least 3 weeks advanced notice of bookings.

The bankruptcy of the Hanjin shipping line last year has had a knock on effect from when it ceased to accept new cargo. Hanjin was the 7th largest container shipper in the world and the news has meant that their cargo has had to be distributed amongst an already nearly full to capacity fleet. Other shipping lines eventually took over their cargo, but at a price, with vessels already operating at high capacity.

Patrik Berglund, CEO of containerised ocean freight data specialist Xeneta said that data indicates that the current short-term rates for 40’ containers from North Europe to Asia averaged US$969. This level of pricing started in November and December ahead of Chinese New Year and had stayed high – and slightly continued to move upwards, Berglund said.
He said it was difficult to give a precise and short answer to the reasons for the current unexpected capacity crunch and high prices, but suggested it was due to a combination of carriers extracting more capacity than predicted demand and re-routing of capacity onto other corridors.

Xeneta had indicated in the lead-up to Chinese New Year that container lines operating on Asia-Europe trades were taking stronger measures than usual to maintain the recent recovery in ocean freight prices by making major cuts to capacity in the weeks after Lunar New Year. Since towards the end of 2016, the market has experienced a strong and sustained recovery, with container rates around 125% higher than they were around this time last year for Asia-Europe routes, Xeneta said. Xeneta’s sources had indicated that carriers were “taking stronger measures to deal with overcapacity to make sure the market stays up”, indicating that lines were attempting to prop up prices by reducing westbound sailings by 33% in the week immediately after Lunar new year and by around 43% from full capacity the following week. Xeneta noted at the time that this behaviour from carriers may mark a distinct difference compared with this period normally in previous years, when rates traditionally slide in the aftermath of Chinese New Year.

china uk

First rail freight service to China has departed from the UK

The first rail freight service from the UK to China departed on its 17 day, 7500 mile journey on April 10th.

British goods including soft drinks, vitamins and baby products are in the 30 containers carried by the train, which will be a regular service.The DP World locomotive left its terminal in Stanford-le-Hope, Essex, for Zhejiang province, eastern China. It will pass through France, Belgium, Germany, Poland, Belarus, Russia and Kazakhstan. It is cheaper to send goods by train than by air and faster than by sea, according to its operators.

The first rail freight service in the opposite direction, from China to the UK, arrived three months ago, the link to the news article we wrote is here. The new service is linked to Chinas One Belt One Road initiative, something we discussed in our news post here.

International trade minister Greg Hands said: ‘This new rail link with China is another boost for global Britain, following the ancient Silk Road trade route to carry British products around the world.‘It shows the huge global demand for quality UK goods and is a great step for DP World’s £1.5 billion London Gateway port as it also welcomes its first regular container ships from Asia.’

The train finally arrived in China on the 29th April (2 days later than the predicted 27th) and was greeted by traders and shipping company officials when it arrived at Yiwu West station.

air freight

Air freight rates climb in March

The latest figures from Drewry’s Sea and Air Shipper Insight report show that average ‘all-in’ air freight rates across 21 major east-west trade lanes increased by 7.9% year on year in March to reach $2.84 per kg. Prices were also up on February levels when airlines achieved an average price across the trade lanes of $2.73 per kg.

Drewry said that this time last year prices remained broadly flat compared with the previous month but added that current prices were still relatively low. The major airports reporting tonnage figure surged month-on-month displays that despite relatively low airfreight rates, there has definitely been growth in the trade. Capacity continues to rise, albeit at a slower pace than last year, although utilisation has gone up along with the rise in load factors.”

Major airports have seen double-digit rises, while key carriers also reported good tonnage increases – the biggest gains from Lufthansa, up 19% year-on-year, and American and United rose 24%. Meanwhile, airlines have reported that product launches are now no longer confined to the fourth quarter and perishables are in year-round demand.

Back in February, Drewry said it expected pricing to soften through March, due to lower volumes following the Lunar New Year holiday and the easing of congestion at the US West Coast ocean ports. However, beginning in April, rates should recover as air freight demand picks back up.

There was a two cent dip in prices paid compared with February, but month-on-month declines are expected at this time of the year and the rate of decline was much slower than that of both 2015 and 2016.

The improvement in airfreight prices comes as airlines have been seeing unusually high demand for the time of the year, with some suggesting this is down to a containership capacity shortage as shipping lines are in the process of launching a series of new alliances. Underlying demand also seems to be improving, while jet fuel prices have increased by around 30% compared with a year ago.

MOL Triumph

The worlds largest container ship takes its maiden voyage

The worlds largest container ship, the MOL Triumph, set off on her maiden voyage from Xingang, China on the 10th April. With a gross tonnage of 210678, deadweight of 197500 tonnes and length and breadth of 400m x 59m it certainly does pack a punch – with the ability to carry 20,150 twenty foot containers.

MOL will sail to Dalian, Qingdao, Shanghai, Ningbo, Hong Kong, Yantian and Singapore, before it transits through the Suez Canal. It will then continue on to Tangier, Southampton, Hamburg, Rotterdam and Le Havre before calling back at at Tangier and then Jebel Ali on the return voyage to Asia.

The new 20,000 TEU-class container ships are equipped with various highly advanced energy-saving technologies. These include low friction underwater paint, high efficiency propeller and rudder, Savor Stator as a stream fin on the hull body, and an optimised fine hull form. According to MOL, these technologies can further reduce fuel consumption and CO2 emissions per container moved by about 25-30% when compared to 14,000 TEU-class containerships. Additionally, the vessel has also been designed with the retrofit option to convert to LNG, in view of the implementation of the International Maritime Organisation’s new regulation to limit emission in marine fuels, which will come into effect in 2020.

MOL will take the delivery of the second 20,000 TEU-class vessel in May 2017. Eventually there will be six 20,000 TEU-class containerships unveiled, and they will be phased in gradually on the existing trade routes of MOL.

MOL Triumph takes the title as the world’s largest containership from the 19,224 TEU MSC Oscar and her three sister ships. The four vessels were delivered to Mediterranean Shipping Company in 2015 by South Korea’s DSME. They measure 395.4 meters in length and have a beam of 59 meters.

At this time, we are anticipating the ship arriving into Southampton on roughly the 11th May, and we will keep you updated with its progress.

one belt one road

China’s One Belt One Road Initiative – how will it affect global trade?

Since 2013 China have been advertising the One Belt One Road initiative, a scheme to join a network of roads, ports, railways and other links from East China through Southeast and South Central Asia to Europe.

This belt of land based links is paired with the Maritime Silk Road, which stretches from Australia to Zanzibar. The initiative involves developing six economic “corridors”: 1. a China-Mongolia-Russia corridor; 2. a new Eurasian “Land Bridge”; 3. a corridor from China to Central Asia and Western Asia; 4. a China-Indochina peninsula corridor; 5. a China-Pakistan economic corridor; and 6. a Bangladesh-China-India-Myanmar economic corridor.

Back in 2011, US President Barack Obama launched the Trans-Pacific Partnership (TPP) trading bloc across the Pacific region. The TPP is a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States (until January 23, 2017) and Vietnam.

Now that Obama successor Donald Trump has carried out his pledge to withdraw from the TPP, the expectations are that Chinese-backed strategies like the OBOR will gain momentum. China experts say that this is a positive development, but there is scepticism over whether Beijing will follow through with the large amount of funding needed, whether big debt-financed projects bankrolled by China will benefit the recipient countries, and whether those projects will actually make sense in the long run.

China experts and economists say that the initiative makes sense and that it will accelerate as the U.S. turns more insular under Trump. “It is unfortunate that many U.S. diplomats and members of the previous administration worked for nearly a decade to push toward the TPP and now it is torn apart,” says Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong. The U.S. is turning its back on the rest of the world at a time when the world needs an open and engaged America, he says. “It is very likely and understandable that China … will try to fill those gaps with this initiative, and that is very logical — it’s something the U.S. will later deeply regret,” Kuijs says.

One of the main factors driving the OBOR effort is the slowdown in China’s own economy. With this in mind the policies are seeing a drive to create new markets for Chinese goods, political influence in the region, and security for the country’s natural resources supply chain. The initiative is part of the larger plan to shift Chinese goods to markets and to create jobs for Chinese companies. The infrastructure also means that products can get from China to Europe in days rather than weeks – a significant reduction in cost and time.

It seems that moving forward without relying on trade from the US and other larger countries, and also Great Britain post Brexit, China is moving to become even more of a global trade super power. Realising that there has been a shift in the global trade agreements in recent years means that China is reacting proactively to an ever changing market. Forecasts show that the OBOR project may take half a century or more, but ultimately is more than likely to succeed.