Typhoon-related port congestion keeps intra-Asia rates high and capacity tight

Intra-Asia freight rates rose for the fifth straight week as typhoon-related congestion in China and bottlenecks in transhipment ports Busan, Hong Kong, and Singapore tied up vessel supply. On 3 September, the Drewry Intra-Asia Container Index (IACI) climbed 9% from 27 August, to $1,312 per 40ft, as typhoon-related port disruption tightened available capacity across key Asian trades. Drewry said: "Spot freight rates from China to South-east Asia and South Asia strengthened further this week as Typhoon Saudel disrupted port operations. Shanghai and Ningbo were closed from 26-28 August, adding to congestion that has built following a series of recent typhoons, including Bavi, Noul, Dolphin, and Narra." The operational impact was reflected in vessel waiting times. In Week 35, average waiting times hit 98 hours in Shanghai and 54 hours in Ningbo. Rates on several major intra-Asia routes rose sharply. Shanghai-Busan increased 30%, to $925 per 40ft, while Shanghai-Laem Chabang climbed 28%, to $1,310 per 40ft. Ongoing geopolitical tension in the Middle East also provided upward support, with Shanghai-Jebel Ali rates increasing 6% to $8,254 per 40ft. These trends were mirrored in the Shanghai Containerised Freight Index on 4 September, with the Shanghai-South-east Asia rate up 12% from 28 August, to $893 per teu, and the Shanghai-Busan rate gaining 7%, to $248 per teu. Disrupted berthing schedules in China cascaded to the major transhipment hubs, including Busan, Hong Kong, and Singapore, causing more delays to shippers. With weather-related interruptions and port congestion persisting, Drewry expects freight rates to rise further in the coming weeks. There were also network changes among regional carriers. Japanese operator Kambara Kisen will revise its NK1 service from 22 September, replacing Otaru with Sapporo, on a revised three-week rotation with three 1,091 teu vessels calling at Dalian, Qingdao, Shanghai, Toyama, Niigata, Sapporo, Kanazawa, and Dalian. Rising bunker prices will also add upward pressure to intra-Asia freight rates. The Baltic Exchange yesterday showed very-low sulphur fuel oil prices went up around $30 from last month, to around $850 per tonne, while prices of high-sulphur fuel oil were up around $50, to roughly $660 per tonne, in Singapore and Zhoushan ports.

To claim or not to claim: the question for shippers without deep pockets

Friday saw The Loadstar break the news that the South Korean consumer electronics giant Samsung is pursuing CMA CGM in the largest claim ever put before US maritime regulator, the FMC: $186m. Unusually for carriers when it comes to FMC stories, the French carrier was proactive, responding to The Loadstar's original story with a comment - unsurprisingly, a brief statement that gave little away. "CMA CGM has taken note of the complaint filed by Samsung Electronics America (SEA). This commercial dispute concerns transactions carried out under the exceptional circumstances of the Covid-19 pandemic," its spokesperson told The Loadstar. "Believing that it acted in accordance with its contractual obligations and applicable regulations and as these proceedings are ongoing, the group will not make any further comments." The contents of Samsung's allegations are fairly boiler plate by now: a carrier tacked on a series of what the claimant alleges were "erroneous" detention and demurrage charges, with an inference that they capitalised on the chaos of the pandemic to rake in vast profits. But that CMA felt the need to respond, speaks to something, with sources active in litigation pointing to the size of the claim - surpassing Bed, Bath & Beyond administrator Butterfly One's $161m levelled against OOCL last year - as a possible provocation. "It is a phenomenal sum of money, so I would think there is a mentality going on of 'we are going to defend this because we don't want everybody coming after us for tens of millions of dollars, so we're putting people on notice'," one source told The Loadstar. Asked if it was otherwise unusual to hear from a respondent before the outcome of an FMC claim the source said: "Being someone who litigates and deals with attorneys every day, you are taught to stay quiet." However, they did acknowledge that there could be some exceptions, the most likely being that responding, or providing any sort of comment, afforded the respondent the "upper hand", but added that "this could just be me". More generally, The Loadstar has at times struggled to gain comment from shipping lines on stories, although editor Gavin van Marle said of CMA CGM: "It is not that bad as far as liner shipping companies go - it can be very proactive addressing negative stories." But with this whopping FMC claim looming over it, and a realistic chance of being made to cough up - Butterfly One ultimately landed a record $45m from OOCL - it may be that carriers are looking to shut up shop on further actions against pandemic-era practices. Sources have told The Loadstar repeatedly that smaller shippers had to make a calculation when it comes to the FMC - the cost of bringing a claim often more expensive than anything they are likely to get back. And with the statute of limitations for claims through the regulator capped at three years, there have also been suggestions that more aggressive posturing by carriers on how they intend to defend themselves will put shippers off until it is too late. With much of the dodgy D&D behaviour that so enraged the shipping community having occurred between 2020 and 2022, one question is whether or not the regulator will adjust claims to reflect acts that occurred that far back, or whether the chain is broken. For shippers that feel they were exploited, one ray of hope: despite initial expectations that the Trump administration would bow to corporate interests, that seems to only happen where those interests are waving an American flag.

Rhine at low ebb - finding Plan B is getting harder

Low water on the Rhine is back, and with it come the usual consequences: barges taking less cargo, higher rates and surcharges, while shippers start asking what can be moved by rail or truck instead. We have seen all this before. Eventually it rains, water levels recover* and the subject disappears again. (*There has been some recent improvement, but 'shipping problems [are] not yet over') For retailers and importers using Rotterdam and Antwerp, however, the issue deserves more attention. The ...