misinformation

SHIPPING NEWSLiner freight rates sinkThese are worrying times for oceancarriers, with spot rates in many tradesat historic lows. Data published by theShanghai Containerised Freight Index(SCFI) Shipping Exchange reveal thatto date, 2015 has seen prices for oceantransport plummet on several routes.The main reasons for the decline arethe delivery of ultra large container carryingvessels into a “soft” Asia/Europe/Asia trade, the resulting cascading of bigships into emerging markets and intensecompetition between ocean carriers andrival alliances.In the key Asia/Europe headhaultrade, rates had fallen to just US$205/TEU between China and northern Europeanports for the week ending 19June 2015 and US$274/TEU to portsin the Mediterranean. These spot ratescompare with prices well in excess ofUS$1,100/TEU last year.While fuel costs are much lower thanlast year, they have been creeping up recentlyand ocean carriers’ losses in theAsia/Europe trade are mounting.This year has seen several plannedrate restoration programmes by carriersChina freesup cabotagemarketChina’s Ministry of Transport (MoT)has taken further, albeit limited steps toliberalise the country’s tightly restrictedcabotage laws. It means that Chinesecompanies deploying foreign flaggedships will now be able to carry containersto/from all ports located in thecountry’s free trade zones. Previously,this privilege only applied to Shanghai.An MoT announcement read: “Chinese-ownedcarriers registered in thecountry can ship international cargoesbetween ports in the free trade zonesand other Chinese ports with theirwholly owned or controlled vesselsflagged abroad, after reporting them tothe transport ministry.”In all, six additional ports will be ableto accept foreign flagged coastal ships.These are Chiwan, Haicang (Xiamen),Jiangyin (Fujian province), Mawan(Shenzhen), Shekou and Tianjin.With new free trade zones locatedin Guangdong, Fujian and Tianjin, it ishoped that the new cabotage law willboost investment levels in these areas,while generating more shortsea andfeeder traffic for the ports.The new legislation does not allowforeign-controlled liner shipping companiesto offer domestic or local feederservices for international cargo in China,something the industry has been campaigningfor, for many years. It is onereason why ocean carriers call at somany ports in China and why regionalhubs have not emerged in the country.China is not unusual in this respect,with many countries, including the US,restricting their coast trade to domesticcarriers.Previously a privilege applied only to Shanghai(pictured), Chinese firms deploying foreignflagged ships can now carry containersto/from all ports located in China’s free tradezoneson the route fail and prospects do notlook good for proposed increases (rangingfrom US$900 to US$1,150/TEU) inJuly by lines such as Maersk Line, CMACGM, MSC and NYK Line.A similar situation prevails in the othermain east-west trade, with the SCFIfor 19 June revealing rates of US$1,268/FEU between China and southernCalifornia ports and US$2,904/FEU toNew York/New Jersey. These are downabout 20% and 4%, respectively, on thecorresponding period of 2014.Elsewhere, the most recent SCFI figuresshow that spot rates have drifted totheir lowest levels since the global financialcrisis in trades linking China withthe Middle East, West Africa, East CoastProspects do not look good for proposed rate increasesin July by lines such as Maersk Line (pictured),CMA CGM, MSC and NYK Lineof South America and Australia.Overall, the composite index publishedby SCFI for all trades out ofShanghai for the week ending 19 June,was just over US$581/TEU. This wasaround 48% lower than in the correspondingweek of 2014.Mobilisations across 8000 nm,Modifications of span of 12 m,Modernisations of drive & PLC,and 8 months later, 2 QCs stand fully operationalat our Béjaïa Mediterranean Terminal, AlgeriaMitsubishi shipping fundJapan-based Mitsubishi Corporation(MC) has raised US$300M for itsMC Seamax Shipping OpportunitiesFund (SSOF), which will acquire, manageand then charter out container vessels.According to MC, which has committedUS$50M to the private equityfund, investors from North America,Europe and Japan have made contributionsto it.The group said that the aim of SSOFis to generate a stable income for its investorsby buying ships and then leasingthem to established liner companies, achallenging strategy, it has to be said,given the significant amount of overcapacityin the industry.A spokesperson at MC said: “Pressurescontinue to be felt due to deliveriesof large vessels, but the containershipping market is expected to recoveras demand increases globally and thefund will continue to deploy its capitalin an effort to acquire prime assets.”Currently, SSOF owns six containershipswith an aggregate capacity of45,000 TEU, all of which are hired toleading liner companies.SSOF is managed by MC-SeamaxManagement Ltd, which is a jointventure between US-based MC AssetManagement, a wholly owned subsidiaryof MC, and Seamax Partners LLC,a specialist US-based shipping advisorycompany.Our triple M approachSince 1988, our engineering team has been working with the world’s ports of call to match their everydayneeds with our customised solutions. Our full spectrum of port equipment competencies include theMobilisation, Modification and Modernisation of cranes - also known as our triple M approach. Come speakto us about how we can work with you in maximising throughput and accelerating growth!www.portek.comA Mitsui & Co., Ltd. SubsidiaryJune 2015 13