News
- CIFFA: Air and Ocean Updates
- 2/5/2010
CIFFA News
Air Updates
• LH Cargo Increasing Its Tariffs
“ITJ” reports that Lufthansa Cargo AG, the freight division of the German airline Lufthansa, is to increase its airfreight rates by an average of 10% worldwide, with effect from 1 March. LH Cargo told customers that its massive drop in profit since the start of the global economic recession is behind the second price increase since last October.
• Martinair Cargo Increases Fuel Surcharge
Martinair has increased their fuel surcharge to CAD$ 0.62 per kg effective January 25, 2010 on all inter-continental routes originating in the Americas.
Ocean Updates
• Hanjin Increases Canada-to-Asia Rates
Hanjin Shipping will increase rates on Canadian exports to Asia effective March 1. The carrier will hike Canada-to-Asia rates on dry shipments $160 per 20-foot container and $200 per 40-foot container and on reefer shipments $200 per 40-foot container. Hanjin Shipping also on Thursday posted a loss on its operations in December, the first full month following its de-merger and the formation of a separate holding company.
• Chinese New Year Shutdown Drives Box Spot Rate Up 20 Percent
Container shipping companies plying transpacific routes are raising rates for eastbound capacity out of China with the spot rate from Hong Kong to Los Angeles soaring 20.5 per cent to more than US$2,000 per FEU in the last week, according to London's Drewry Shipping Consultants. Record highs in recent weeks were driven by an "emergency rate charge" levied on January 15 by the 15 carriers of the Transpacific Stabilisation Agreement (TSA). But the carriers have also managed to nearly double the spot rate compared to the TSA guideline.
The TSA called for a mid-contract emergency rate increase of $400 per FEU for January 15 from Asia to west coast ports to compensate carriers while they waited for the money from supposed increases in forthcoming contracts with shippers in 2010 and 2011 round. But spot rates in the most recent week jumped by $728 above the $1,284 per FEU rate prevailing in the first week of January as shippers bid on scarce vessel space.
The rise is attributed to a shortage of vessel space ahead of the one-week factory shutdowns on the mainland because of Chinese New Year from February 14, as well as having 10 per cent of the global container fleet laid up as a result of the economic downturn. Such effects have been confirmed by shippers and carriers alike. Importers say their cargo has been rolled over because of a space shortage. One carrier told a shipper that so many containers had piled up in Shanghai that they could have filled another ship bound for the west coast.
• Robust Two-Year Forecast for Maersk
Danish financial house Danske Market Equities is forecasting the parent company of ocean carrier Maersk Line will return to profitability in 2010 due largely to better container shipping freight rates reports “American Shipper”. DME is forecasting all-in freight rates will increase 16 percent in 2010, and is projecting net profit of $172 million for the A.P. Moller - Maersk Group on the conservative side. The analyst’s “bull scenario” sees Maersk earning more than $800 million during the year.
The report, released in late January, said container shipping on the transpacific and Asia/Europe lanes has turned a corner, with demand growth to exceed supply growth over the first half of 2010. That will allow carriers to maintain an upper hand in spring rate negotiations on the transpacific, the analyst forecasts. The report said Maersk Line’s estimated revenue for 2010 will return to near-2007 levels, and that its operating revenue will hit $383 million, also close to its 2007 return of $487 million. The report predicts an even more robust 2011, with operating profit of $1.4 billion on virtually the same revenue levels as 2010. Volume growth is predicted to rise 4 percent this year and a further 7 percent in 2011.
Canadian - Business - Government
• As Olympics Approach, Expect Delays in BC
“MM&D” - The Vancouver 2010 Olympic and Paralympic Games will take over Vancouver and Whistler, British Columbia, from February 12 to March 21. There will be a massive influx of people and a corresponding spike in demand for goods, not to mention an array of unique items to be moved. Plus, many roadways, particularly in downtown areas, will be closed to traffic. The streets and highways feeding the Games will certainly be more congested than normal, but there are plans in place to ensure that the supply chains supporting the Games run smoothly. The City of Vancouver and other agencies have issued plenty of information about what shippers and carriers should expect.
Downtown deliveries - The City of Vancouver has listed at a variety of ways to minimize the effects temporary road closures and restrictions will have on the delivery of goods and large vehicle movements. City representatives say that local businesses will be able to make and receive deliveries in downtown Vancouver throughout the month of February. But the city is also strongly encouraging businesses to be flexible about the timing of those shipments. In order to avoid congestion and traffic, the city recommends that all deliveries be planned between midnight and 6:00am. If companies are not able to make or receive deliveries before during that window, the next preferred timeslot is before noon. In some areas, co-ordinating those deliveries will take some extra effort. Throughout the Games, parking and loading zones will be temporarily removed from certain streets in downtown Vancouver. If a loading zone is affected, businesses are being encouraged to look for alternate drop-off/loading zones in parkades or lanes.
At the port - Port Metro Vancouver has consulted with the marine, rail and trucking industries, its commercial tenants and local governmental agencies to create its plans. With its stakeholders, it has developed traffic management measures to minimize the effects of any temporary road closures and restrictions on the movement of goods and large vehicles during the Games. In fact, the port says it expects that normal business operations will continue throughout the duration of the Games, with no significant change from current traffic volumes. That said, goods will not be moving as quickly as normal. The port warns its users that there will be rush hour conditions and congestion throughout the day, causing vehicular traffic to move much slower than normal. Since many of Port Metro Vancouver’s facilities are located in the downtown core, this is something trucking companies will have to factor in.
The Sea to Sky Corridor - Up the Sea to Sky Highway, Whistler expects to see its population increase from 10,000 to 55,000. Parking in the city will be significantly reduced, and organizers expect congestion. To manage traffic volumes going into or through Whistler, Olympic organizers and its transportation partners will be issuing permits for travel north of Squamish between the peak hours of 6:00am and 6:00pm between February 11 and February 28.
U.S. Updates - Business - Government
• CBP Announces C-TPAT Annual Accomplishments
U.S. Customs and Border Protection announced the Customs-Trade Partnership Against Terrorism 2009 program highlights. Strong validation numbers, continued member growth and increased quality assurance highlight C-TPAT accomplishments in 2009. C-TPAT is a voluntary government-business initiative to build cooperative relationships that strengthen and improve overall international supply chain and U.S. border security. Full details at: http://www.cbp.gov/xp/cgov/newsroom/news_releases/national/02032010_2.xml