cosco oocl

Cosco’s acquisition of OOCL could be the most expensive take over in shipping history

On Sunday 9th July a joint statement was issued by Orient Overseas International Ltd (OOIL) from Hong Kong, Chinese state owned Cisco Shipping Holdings Ltd (Cosco) and Shanghai International Port Group Co (SIPG). 

Cosco and SIPG are acquiring all of OOIL shares at an offer price of HKD 78.67 (USD 10.07) per share, an overall pace of £4.9 billion. The price represents a 31% premium on Fridays closing price of HKD 60 and values OOIL at around 42.9 billion.

On the completion of the deal, Cosco will hold 90.1% while SIPG will hold the remaining 9.9% stake in OOIL. The joint buyers said they will keep the OOIL branding, retain its listed status and maintain the companies’ global headquarters in Hong Kong along with all management. Employees will retain the existing compensation and benefits, nor will any lose jobs as a result of the transaction for at least 24 months.

It was only in May that the Orient Overseas Container Line (OOCL) had the worlds largest container ship, the OOCL Hong Kong but just months later the 7th biggest container shipping line is being sold to a Chinese rival.

China’s vision of dominating world trade seems to be becoming more of a reality with the take over, and aims to become less dependent on Hong Kong.  The take over of the OOCL parent company (OOIL) will also propel Cosco from 4th to 3rd of the global container shipping marketing share.

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.

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.

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.

china uk

6 Top Tips for importing goods from China

In the current economic climate post Brexit, leaving the EU means that foreign relations have become more important than ever. Here are our 6 top tips for importing goods from China…

1. Ensure that the goods are permitted in your country, and that they are correctly classified. International trade is heavily regulated, and Supreme Freight can make sure that all your goods have the correct classifications, such as CFSP, IPR, OPR and warehousing entries, not forgetting BTI classification.

2. Do you need an import license? Do you need to pay VAT and Duty? This is dependent on the classification of the goods. Here at Supreme we can give expert advice to help simplify the process for you to make sure that the correct documentation is in place for your shipment.

3. Choose the right method of transportation. When importing from China the usual methods are either sea or air freight. If there are no time restraints and larger quantities, then sea freight may be preferable. If you would like your goods quicker and with higher levels of security, then air freight would be recommend. If you choose sea, then we can handle all types of cargo including full container load (FCL), less container load (LCL) and NVOCC groupie shipments. If air is your preference our team at Heathrow Airport offer a range of direct and indirect shipment services. Choice and flexibility are paramount and we work closely with both our client and supplier to design a schedule and transit time that will suit your requirements.

4. Track your cargo. Make sure you choose a forwarder who can track your goods. Our tacking page offers detailed information and insight to the status and progress of your shipment, for both sea and air freight. [link to tracking page]

5. Arrange collection of your shipment. We offer a door to door service if required which is convenient and flexible, and also offer container and cargo storage which is a crucial aspect of the supply chain.

6. Don’t forget the Chinese New Year! How can you avoid delays?! By making sure that your order is placed in plenty of time, November at the latest.

Happy importing!
进口快乐

London gateway

Big changes in shipping alliances open the door to the world for London Gateway

New London Gateway services are now available to and from the Far East in the wake of big changes in shipping alliances.

The recent changes are affecting the location and timing of many international shipments, one of the notable benefits however is that the London Gateway now has deep seas connections for the first time. The Alliance will be using London Gateway for two transatlantic loops and 2 Asia – Northern Europe.

Supreme customers looking to import their shipments to London and the surrounding area can take advantage of this.

Interested in London Gateway arrivals? Please contact our import team to discuss your requirements, we’d be happy to help.

 

bad-weather

Weather Warning – Strong Winds in the UK Predicted on Thursday 23rd Feb

The MET Office have a severe weather warning in place for Thursday 23rd February covering the Port of Felixstowe with wind gusts forecasted between 60 – 80mph.

Weather Forecast MapsWind speed, 10 m above ground, 51°N 1°W, 2017/02/23 08:00 (UTC), © VentuSky.com

Due to the forecast we are expecting Felixstowe Port to close from1000hrs tomorrow morning through to the early hours of Friday morning the 24th
With this in mind, potentially there could be some disruption and delays to deliveries.

If you have deliveries booked for Thursday PM or Friday morning we would suggest bringing them forward (if possible) to tomorrow morning so we can collect containers early to avoid the MET office severe weather warning.

If you require any further information please get in touch.

We thankyou for your understanding and continued cooperation during this time.

bad-weather

Weather Warning – Poor sea conditions in Southern Europe

We have been advised that due to weather issues of waves of up to 11 meters in Southern Europe, vessels may be forced to slow down or seek shelter until conditions improve. This will have an impact on vessel ETAs into the UK.

Below is a quote from a carrier :

“Sea conditions are expected to deteriorate to the point where vessels are unable to transit the Bay and will seek shelter either in the Med or NEU waters, waiting out the storm”

If any of your shipments are affected then your account manager will be in contact in due course. If you have any questions please get in touch.

Southampton freight terminal expansion

Southampton’s freight terminal plans further expansion

The planned expansion of Southampton’s container terminal will help cement it’s reputation as one of the fastest, most productive freight terminals in the UK.

With the mega vessels arriving in Southampton getting bigger and bigger, Southampton’s freight terminal are scaling up to match. DP World Southampton are investing heavily in new equipment, land and quayside cranes. This increase in capacity is great news for the local freight industry, and will only help to improve the speed and productivity of the Southampton Terminal, which is already widely regarded as one of the best in the country.

The terminal recently acquired an additional 11.2 acres of land at the north east edge of the terminal, creating 640 extra ground spaces to store containers and bringing the size of the terminal to almost 100 hectares.

As well as creating more container capacity, the 11.2 acres supports operations at SCT 5 – the freight terminal’s newest and largest deep-water berth, which opened in March 2014. The new land behind this berth enables shorter run distances for straddle carriers taking containers to and from the stack, improving productivity overall.

Nick Loader, Chief Executive Officer, DP World Southampton, said:

“Container ships are getting bigger all the time. The 11.2 acres of new land will allow us to increase the utilisation of SCT 5. It will also help us to be much more efficient so that DP World Southampton can continue to load and unload vessels faster than any other container terminal in the UK. Our customers tell us that we are the most productive terminal in the UK and we intend to stay that way.”

The terminal operator’s expansion plans also include:

• Investment in 17 new straddle carriers, being manufactured by Kalmar in Poland, to replace older equipment and bring DP World Southampton’s fleet more up to date.

• The purchase of a two additional new super post-panamax cranes scheduled for delivery in early 2018.

The size of container ships importing and exporting goods around the world has nearly doubled in just under 10 years. The world’s largest container ships regularly call at DP World Southampton including the MSC Diana at 19,462 TEU. However, there are already 21,000 TEU vessels on order for delivery during 2017.

The growth of the Southampton freight terminal will help to future proof it for dealing efficiently with increasingly larger vessels, which is great news for Supreme Freight as one of the major freight forwarding companies in the area.

Feel free to get in touch to see how this could effect your freight requirements.

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