Rising inflation and shipping disruption shift power to labour

US container import records continue to be broken: Port Tracker

ANOTHER record breaking number of imports passed through American major container ports showing no sign of a slowdown in consumer demand, according to the US National Retail Federation (NRF).


"Cargo volume is expected to remain high as we head into the peak shipping season, and it is essential that all ports continue to operate with minimal disruption," said NRF vice president Jonathan Gold.


US ports handled 2.4 million TEU in May - up 2.7 per cent from last year - setting a new all-time record number of imported containers in a single month since the NRF began tracking imports in 2002 through Global Port Tracker.


At the nation's busiest port in Los Angeles - the port processed 967,900 containers in May, the third best month of all time. And in the first five months of this year, the Port of Los Angeles is on track to equal last year's record-setting pace.


But despite a record number of containers - the number of cargo ships waiting to dock at the ports in Los Angeles and Long Beach is down from its high of 89 vessels November 2021 to 26 last week.


So while maritime congestion has eased - congestion on land is serious - the number of containers clogging the Port of Los Angeles has risen in the last 30 days to an average of 4.3 days and an average of 7.5 days nearby railyards with the peak dwell time coming in at 11 days.


In October the twin ports of LA and Long Beach announced a "container dwell fee" that has been put on hold through. The plan is to delay fee another week and revisit it then, according to LA port spokesman Phillip Sanfield.


Since the programme was announced - the two ports have seen a combined decline of 27 per cent in cargo on docks, according to the Port of Los Angeles. The fee would charge ocean carriers US$100 per container and $100 additionally for each day the container sits at the port.


Adding to the stress, the current contract between the International Longshore and Warehouse Union which represents about 22,000 US west coast dockers expired on June 30. The union said members will continue to work through the expired contract - as negotiations continue.


Ports surveyed in the report include Los Angeles/Long Beach, Oakland, Tacoma, Seattle Houston, New York/New Jersey, Hampton Roads; Charleston, Savannah, Miami, Jacksonville, Fort Lauderdale and Port Everglades.


For the following months, Port Tracker issued the following projections: June, at 2.25 million TEU, up 4.8 per cent annually, which would increase the first half 2022 total to 13.5 million TEU, for a 5.4 per cent annual increase; July, at 2.31 million TEU, up 5.3 per cent annually, which would be the fourth-busiest month on record; August, at 2.26 million TEU, down 0.5 per cent annually; September, at 2.12 million TEU, down 0.8 per cent annually; October, at 2.12 million TEU, down 4.1 per cent annually; and November, at 2.06 million TEU, down 2.5 per cent annually.


China diplomats counter US initiative to strike Asian trade deal

FOREIGN Minister Wang Yi has secured a fresh pledge from Thailand to complete a US$5.2 billion rail link between the two countries and expressed a willingness to open a "golden age" of ties with the Philippines' newly elected president, Ferdinand Marcos.


Mr Wang also attended a regional summit in Myanmar, which the military regime hailed as a sign of growing recognition of its rule, more than a year after ousting the civilian government in a coup.


The minister's 11-day trip was part of China's push to offer an alternative to the US's Indo-Pacific Strategy and assuage regional suspicions of its own intentions by emphasising shared economic benefits.


The urgency of that effort has been increased by Russia's invasion of Ukraine, which has fueled concern that China could take military action to resolve territorial disputes in places like Taiwan.


US Secretary of State Antony Blinken is expected to press the US's case that Russia's actions set a dangerous precedent during G-20 meetings in Bali, Indonesia.


Mr Wang, for his own part, has been promoting the Global Security Initiative announced by President Xi Jinping in April, in an effort to appeal to developing nations that may be wary of the Western-led campaign to punish Russia with sanctions.


In Bali, Mr Wang and Russian Foreign Minister Sergei Lavrov pledged to jointly safeguard the common interests of developing countries while further expanding bilateral cooperation, reports Xinhua.


In another meeting with India, a nation that has moved closer to the US after military clashes on its border with China, Mr Wang told Indian External Affairs Minister Subrahmanyam Jaishankar that ties have improved of late and called for more efforts to put the relationship back on track.


Mr Blinken and Mr Wang were to meet Saturday on the sidelines of the G-20 in a high-level meeting expected to set the stage for a phone call between President Xi and US President Joe Biden.


Mr Wang told his Indonesian counterpart Retno Marsudi on the sidelines of the G-20 meetings that Beijing wants to work with Asean to "oppose any resurgence of the Cold War mentality and bloc politics in the region," China's Foreign Ministry said.


That contrasts with Biden's effort to expand a coalition of "like-minded democracies," via groupings like the Quad - with Australia, India and Japan. Most countries in the region count China as their largest trading partner and the Indo-Pacific Economic Framework for Prosperity that Biden rolled out in May remains largely conceptual.


China suffers worst wave of capital flight in 7 years: IFF

CHINA is undergoing its worst wave of capital exodus for seven years, a global financial industry association has warned, reports Hong Kong's South China Morning Post.


Overseas investors withdrew US$2.5 billion net from Chinese bonds in June, according to data from the Institute of International Finance (IIF), while $9.1 billion net flowed into other emerging markets' bonds last month.


But a net $4 billion was withdrawn from emerging markets' equities and bonds combined in June, marking the fourth straight month of net losses, the Washington-based IFF said.


Overseas investors still deposited $9.1 billion into China's equities in June, compared with outflows of $19.6 billion in other emerging markets, said the IIF.


Ukraine faces grain market woes while Russians thrive

WAR-TORN Ukraine finds itself crippled in getting its grain to market, finding seaports closed and having to resort to more costly rail and river transport, reports Bloomberg.


Meanwhile, its Russian rival is about to reap one of its biggest-ever harvests, though war-related logistical and financial constraints remain key questions about how much it can sell.


The sales pace from the Black Sea - which accounts for a quarter of global trade grain trade may be in focus more than ever, said the report.


Despite slumping recently, wheat prices are much higher than normal for the time of year. That's contributing to food inflation and prompting world leaders to pledge to do more to fight hunger.


"We in grains have never traded a war market before, so this is all new," said Dan Basse, president of Chicago-based AgResource. "The Russians are going to have a situation where they're going to export wheat, but it's not going to be as easy."


Wheat shipments from top exporter in Russia have remained largely normal since it invaded Ukraine, going to traditional customers. With new crops rolling in, the coming months will show whether it can sell the big volumes usually seen when exports peak.


Ukrainian export prospects remain bleak. There has been little progress toward restarting seaborne trade, terminal closures threaten to limit grain shipments to less than half their potential and Russian strikes have damaged crop facilities at ports. Volumes in June were 44 per cent below last year.


Despite Russia having lots of wheat, its exports face challenges. Its agriculture sector hasn't been targeted by sanctions, but unofficial measures have seen some banks and shipping companies cut bank credit lines and services.


Russia's and Iran's Caspian Sea ports move cargo in new deal

RUSSIA's Astrakhan Region, on the northern Caspian Sea shore and Iran's Mostazafan Foundation have signed an agreement to establish a shipping company to develop the north-south transport corridor, said the deputy chairman of the regional government, Denis Afanasyev, reports Moscow-based Interfax agency.


Russia lies at the northernmost coast of the inland and largely fresh-water Caspian Sea while Iranian territory lies on its southernmost shore. There is also an east-west Kazakhstan-Azerbaijan rail water route from China to Europe made all the more important after Russia's invasion of Ukraine.


"The leadership of the Mostazafan Foundation, one of the largest Iranian funds, which includes, among other things, shipping companies, visited us. An agreement was signed on the creation of a joint shipping company," said Mr Afanasyev.


He said the Astrakhan port is seeing a significant increase in cargo traffic, which is expected to grow by a third by the end of August.


Belarus has confirmed its willingness to ship some cargo through Astrakhan ports, Mr Afanasyev said.


"Approval is underway with the Transport Ministry of Russia on the volumes that will go specifically in the direction of Astrakhan. We're talking about at least one million tonnes from Belarus in the near future.


"We can double the figure for this route if we have an understanding regarding discounts for railway transit," Mr Afanasyev said.


He said Astrakhan Governor Igor Babushkin plans to hold negotiations on discounts with the management of Russian Railways (RZD).


Local rivals blocking Maersk, MSC from Santos privatisation

SMALLER independent terminal operators are working to block Maersk and the Mediterranean Shipping Co (MSC), the world's two biggest shipping companies, from participating in privatisation of the Brazilian Port of Santos, reports Fort Lauderdale's Maritime Executive.


Santos currently handles 4.4 million TEU annually and the new terminal will play a key part in the planned growth to 7.9 million TEU by 2040.


At stake are the rights to one of the crown jewels in Brazil's portfolio, a nearly 150-acre site in Santos for a new container terminal Cais do Saboo, more commonly called STS10.


Maersk and MSC are joint venture partners in the Brasil Terminal Portuario in Santos and have interests in terminals in other ports around the country. Maersk and MSC already account for 60 per cent of the container volume that comes to Brazil.


Brazil has been systematically auctioning off port facilities around the country. The programme is designed to raise badly needed funds for the country while also supporting efforts to expand and modernise the ports.


The Santos Port Authority has been working to expand the capabilities of the port announcing in 2021 that they had completed efforts to significantly increase the size of containerships calling at the port from 9,000 to 14,000 TEU.


The government in March 2022 published the preliminary terms for the auction for STS10 despite efforts by the trade association representing the independent terminal operators to block the release of the prospectus.


They fear market concentration if the major shipping companies were to take over the operation of the terminal and possibly too much capacity that would also hurt the independent operators.


While the government refused to delay the process, they did include a restriction preventing the major carriers from joining together to bid for the terminal.


PSA inaugurates first stage of Sines Container Terminal expansion

SINCE the start of the terminal in 2000, PSA Sines has invested over US$207 million in developing the facility, reports Colchester's Seatrade Maritime News.


PSA Sines has embarked on an expansion project for $309 million, called Phase III.


The expansion plan will be completed by 2028, doubling the terminal's annual handling capacity to 4.1 million TEU.


The inauguration of the additional 204 metres of quay length marks the completion of the first stage of Phase III.


"Portugal and Singapore have both stood at the crossroads of busy sea lanes connecting the Asia and Europe. PSA Sines is situated in a strategic location and is positioned to be an important transshipment hub in Europe," said Singapore Foreign Minister Vivian Balakrishnan.


"This expansion demonstrates our strong partnership as two like-minded states, united in maintaining free trade, economic integration, freedom of navigation, and compliance with international law."


Said PSA CEO David Yang: "PSA has always believed that the Port of Sines, with a deep-water port strategically located at the intersection of the north-south, east-west routes, offers a unique opportunity for the successful development of a best-in-class container terminal.


"Today, PSA Sines has already exceeded our highest expectations and has become a major regional hub capable of serving the most important shipping routes and receiving the largest container ships," he said.


World Shipping Council joins UN, customs group to fight drugs

THE World Shipping Council (WSC), the UN Office on Drugs and Crime and the World Customs Organisation have come together to address the frequency with which overland and waterway routes are being used for drug trafficking.


"The resilience of drug markets during the pandemic has once again demonstrated traffickers' ability to adapt quickly to changed environments and circumstances, with recent developments including increasingly large shipments of illicit drugs," said a statement from the conference in Brussels.


The goal of the conference was to counter these developments by enhancing relationships and communications between the ocean liner industry and customs officials.


The customs authorities of Ecuador, Panama, Belgium, Netherlands, United Kingdom, France, Germany, Italy, Spain, Portugal, Malta, Turkey, India, Australia, New Zealand, Canada and the United States shared information on drug traffickers' tactics.


WSC member carriers provided insights into the everyday operations of the ocean liner industry and the strategies and procedures employed to prevent crime, as well as opening lines of communication to build relationships with customs authorities.


Rising inflation and shipping disruption shift power to labour

RISING inflation and Covid crisis lockdown have caused unionised labour within containerised supply chains meant for industrial action, reports IHS Media.


European transport unions in June held a series of 24-hour "warning strikes" in Hamburg, Bremerhaven, and Lower Saxony amid collective wage agreement discussion.


National strikes in Belgium shut down Brussels Airport and slowed cargo flow at the port of Antwerp, Europe's second-busiest container gateway.


Unions in Italy, Spain, France, and Malta have also announced strike actions.


Furthermore, a national UK rail strike over pay, the first in 27 years, has crippled the network.


Container shipping disruption tied to the Covid crisis demonstrated how critical it is for goods.


Yet, for many freight workers, their pay hasn't matched the increases in prices of everything.


Global consumer inflation is currently at seven per cent, according to S&P Global, the parent company of JOC.com.


"You've got a bit of a perfect storm for industrial unrest, and I'd go a step further, social unrest, without advocating for it," said International Transport Workers' Federation (ITF) general secretary Stephen Cotton.


The ITF sees an opening to push for safer conditions, increased training, and higher wages across the supply chain.


"By necessity, we have gotten smarter - it's about Point A to Point B. It's not just a docker in Long Beach; it could be a warehouse worker in Berlin or a railway operator in China," said Mr Cotton.


Meanwhile, if automation isn't the main point in labour talks, it's at least being discussed.


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Rising inflation and shipping disruption shift power to labour
Rising inflation and shipping disruption shift power to labour