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South Africa releases plans for South African Shipping Company

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Archives, Global Logistics, Global Trade Daily

South Africa releases plans for South African Shipping Company

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The Department of Transport of South Africa has released the first draft of the South African Shipping Company Bill 2022 slated to establish the country’s first national carrier.

South African Shipping Company (SASCO) follows the government’s target to bolster its maritime sector amid supply chain disruptions brought by the COVID-19 pandemic.

Plans to establish a state-owned national carrier have been on the cards since 2017.

READ: South Africa looks for investors to greenify ports

According to the bill, all ships would be flagged in South Africa and will operate alongside logistics services and infrastructure.

SASCO will also engage in tanker services, bunkering services, container services, bulk cargo services, and coastal shipping services – on top of traditional carriage of export and imports.

Funds will be provided under an Industrial Development Fund (IDC) and through the government itself.

Specific details on the financing are yet to be defined.

The Department of Transport said meetings with stakeholders will commence this month to explore interest and commitment to the shipping company.

Works at container terminals around South Africa ground to a halt last month as liners omit calls around the nation’s ports.

The congestion is a result of strike action from the United National Transport Union (UNTU) and the South African Transport and Allied Workers Union (SATAWU) in a walkout over a pay dispute that rolled on for months.

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Archives, Global Logistics, Global Trade Daily, Ocean Ports

Port of Melbourne Welcomes Largest Ship Ever to Call at Victoria Container Terminal

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The CMA CGM Group has deployed the largest vessel to ever call at the Port of Melbourne (PoMC).

With a nominal capacity of 10,926 TEU, the CMA CGM Estelle berthed at Victoria International Container Terminal (VICT) in Webb Dock.

The ship operates on the North Europe Mediterranean Oceania (NEMO) service.

The previous record was held by the CMA CGM Ural, with a handling capacity of 10,622 TEU.

“VICT would like to congratulate the CMA CGM Group on their continued drive for efficiencies through deploying larger vessels with clear environmental benefits in the Oceania trades to support the demand of the economy and utilise the ability to increase economies of scale,” said Tim Vancampen, VICT CEO.

“In partnership with PoMC in the Webb Dock Development, we are committed to supporting the Victorian shipping industry with our $235 million investment that will increase our ability to accommodate increasing vessel sizes.”

READ: CMA CGM launches new US-South America new service

“It’s really exciting to see this vessel arrive at Port of Melbourne,” added Saul Cannon, PoMC CEO.

“We are investing across the port to ensure we can accommodate the larger vessels that are calling at Melbourne.”

“The global shipping fleet is deploying larger vessels. Port of Melbourne is well positioned to meet global shipping trends to serve the growing freight needs of Victoria and south-eastern Australia now and into the future.”

The Port of Melbourne reported strong volumes in August amid peak season.

August 2022 saw total container throughput (full and empty) up 9.5 per cent over August 2021 with a total of 284,487 TEU.

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Archives, Global Logistics, Global Trade Daily, Ocean Ports

CMA CGM Launches Green Early Container Return Incentive

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CMA CGM group has launched an early container return incentive in the US.

TEUs to Trees is designed to increase climate change mitigation in the United States while assisting in the overall effort to improve both the fluidity and velocity of the supply chain.

The group’s new program will provide customers 2.5 tons of carbon credit per container to offset emissions and support US socio-environmental projects.

The carbon credits CMA CGM will purchase on behalf of its customers will notably be used to expand US forestry, support urban resilience projects in vulnerable communities and drive the creation of additional offset projects in the US.

The program will be in effect from 1 October 2022, to 30 December 2022.

READ: CMA CGM, ENGIE plough €150 million to Salamander biomethane project

Credits will be provided to CMA CGM customers that return both dry and refrigerated containers originating from nearly 20 Asian countries to CMA CGM-approved return locations in port cities throughout the United States (rail ramps not included).

Throughout the program, each applicable importer of record (consignee listed on the Bill of Lading) will receive: 2.5 tons of carbon credits per container returned during calendar days 1–4. To calculate the credit, CMA CGM will utilize EDI transaction data and will not require invoices or additional documentation from customers.

Customers will also receive a progress report every 30 days. At the end of the program, customers will be issued an official carbon offset certificate for total credits earned.

In September the group announced a new $1.5 billion Special Fund for Energies to accelerate its energy transition and achieve net-zero carbon by 2050.

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Archives, Global Trade Daily, News, Ocean Ports, Uncategorized

MSC, Shell and Partners launch Initiative to Reduce Industry Methane Emissions

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A collective of firms including MSC and Shell have launched a new strategy to reduce methane emissions from vessels.

According to a report from Reuters, initiative supporters include ship certifier Lloyds Register.

In a statement, the supporters noted there were no globally recognized methods for measuring methane slip – unburned fuel that is not fully combusted in a vessel’s engines – and reaffirmed the importance of clarity in methane emissions measurements.

The Reuters report notes that shipping firms are increasingly trialling low or zero-emission fuels including biofuel, Liquefied Natural Gas (LNG), and methanol.

READ: Maersk signs green bio-methanol partnership with Debo

However, LNG-powered vessels, for example, can leak unburned methane into the atmosphere when a ship is running – a much more potent greenhouse gas (GHG) than CO2.

Members will pilot new technologies to gauge and drive down methane slip from LNG-powered vessels. The statement added that once the solutions have been validated, the collective will look to implement them in industry from 2023 onwards.

Earlier this month the CMA CGM Group announced a new Special Fund for Energies to accelerate its energy transition and achieve net-zero carbon by 2050.

Shipping group Maran Gas Maritime, among the seven partners involved, said it had “long been convinced of the advantages of LNG as a clean burning fuel”.

“However, in light of the strong warming potential of methane releases to the atmosphere, keeping tight control over methane emissions is critical to ensure that LNG’s overall GHG footprint delivers as much GHG reduction as possible,” Andreas Spertos, EVP-Technical Director with Maran Gas Maritime said.

Earlier this month ZIM shipping signed a 10-year LNG agreement with Shell.

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Archives, Global Logistics, Global Trade Daily, Ocean Ports

Maersk Completes $3.6 Billion Acquisition of LF Logistics

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Maersk has announced the completion of its acquisition of LF Logistics, a Hong Kong-based contract logistics company.

LF Logistics offers capabilities within omnichannel fulfilment services, e-commerce, and inland transport in the Asia-Pacific region.

As consequence, LF Logistics will be rebranded to Maersk.

Following the acquisition, Maersk will add 223 warehouses to the existing portfolio, bringing the total number of facilities to 549 globally, spread across a total of 9.5 million square meters.

“I am thrilled to welcome LF Logistics to Maersk. Maersk in Asia has historically been primarily focused on ocean transportation out of Asia and related logistics services,” said Ditlev Blicher, Regional Managing Director of Asia Pacific at A.P. Moller – Maersk.

“With the addition of LF Logistics, Maersk gains unique and best in class capabilities to servicing the important and fast-growing consumer markets in Asia. Furthermore, LF Logistics expertise in omnichannel fulfilment positions us well with the global e-commerce market.”

LF Logistics employs 10,000 people.

READ: Maersk kicks off construction of green warehouse in Denmark

The firm specialises in B2B and B2C distribution solutions within retail, wholesale, and e-commerce, and a strong base for Maersk to expand within Asia-Pacific and globally.

“LF Logistics has an enviable track record of profitable growth in the region for more than two decades. Maersk’s global presence provides an ideal platform for our next phase of organizational expansion and development,” said Joseph Phi, Group CEO of Li & Fung and CEO of LF Logistics.

The value of the transaction is $3.6 billion (enterprise value) post-IFRS 16 lease liabilities. It is expected that revenue and EBITDA in the in-country logistics business will more than double by the end of 2026.

As part of the transaction to acquire LF Logistics, Maersk has entered a strategic partnership with Li & Fung to develop a comprehensive range of end-to-end global supply chain services with Li & Fung focusing on the upstream supply chain and Maersk focusing on the downstream supply chain.

Earlier this week, APM Terminals (APMT), part Maersk, announced it will divest its minority stake in Russian container terminal operator Global Ports Investments PLC (GPI).

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Port St. Petersburg Traffic Plummets as MSC, CMA CGM Only Carriers to Call

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Global fleet capacity deployed to the Russian port of St. Petersburg has plummeted since the beginning of the Russia-Ukraine war.

According to the latest statistics from Alphaliner, fleet capacity deployed on regular intra-European services to and from St. Petersburg has been reduced by a staggering 82 per cent since the beginning of the conflict.

MSC and CMA CGM are the only carriers left to advertise sailings to/from the Russian port; however Unifeeder and COSCO Shipping have continued to send ships to St. Petersburg in the past weeks on off-schedule voyages.

Earlier this month Global Ports Investments PLC (Global Ports) noted that Russia’s container market has decreased by 17.3 per cent to 899,000 TEU in the first half of 2022.

MSC officially still advertises St. Petersburg calls on its North Europe – West Africa ‘NWC to/from Morocco – West Africa’ service but this line has been excluded from Alphaliner’s analysis as the last physical call at St. Petersburg already dates from 21 May. No ship is currently assigned to this loop heading for St. Petersburg.

MSC has added St. Petersburg to the rotation of its intra-Baltic ‘Loop 2’ served by the 1,683 TEU MSC VANQUISH now calling at Klaipeda, St. Petersburg and Kotka.

CMA CGM’s schedules for its Antwerp – Hamburg – Baltic ‘SSLEUR Baltic Shuttle Service A’ still mention St. Petersburg calls for the 2,487 TEU CMA CGM LOUGA and CMA CGM PREGOLIA in June; however Alphaliner has yet to have seen a continuation of this service in July.

Alphaliner noted that some of the larger vessels have been to Transatlantic routes: eight 1,380 – 3,600 TEU ships representing a total capacity of 24,200 TEU have been redeployed on the Transatlantic trade, where there is a huge demand for extra capacity.

Around half of the 43 ships that have left service to/from St. Petersburg continue to trade on North European services, focusing on destinations in Finland, Poland, the Baltic States and Scandinavian countries. These 22 ships represent a capacity of 37,800 TEU.

Before Russia’s invasion of Ukraine at the end of February, Sealand (Maersk) deployed the most capacity to/from St. Petersburg on intra-North European services. All seven of its Baltic 3,596 TEU jumbo feeders (aka Winter Palaces) were making regular calls at the Russian port.

The Danish carrier continued calling at St. Petersburg until 29 April to recover empty boxes. On 4 May Maersk stopped all vessel operations in Russia and service with Belarus due to the ongoing conflict.

In April Russian vessels were banned from accessing EU ports.

Earlier this week Russia launched a missile attack on the Ukrainian city of Odesa less than a day after signing an agreement to resume grain shipments from the port.

Container flows at the Port of Rotterdam have dipped for the first half of the year as a result of the loss of container traffic to Russia and continued disruption to logistics networks around Europe.

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DP World Combines Unifeeder With P&O Ferrymasters

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DP World has combined Unifeeder Shortsea with P&O Ferrymasters to offer an enhanced proposition to its European customers.

The agreement will take place with immediate effect and will establish a single brand – P&O Ferrymasters – combining the strengths of both multimodal operators under DP World’s wing, offering customers Intra-European multimodal transportation solutions via trailer, container, and rail.

“By joining the forces of the two leading multimodal specialists we will establish a single brand standing for unique intra-European multimodal transportation and logistics services,” said Timm Niebergall, CEO of P&O Ferrymasters.

“It will enable our valued customers to benefit from the widened outreach and network, as well as direct access to a full range one-stop shop for multimodal supply chains services in Europe, while our vendors will benefit from opportunities for closer collaboration.”

All present agreements with P&O Ferrymasters and Unifeeder Shortsea will be honored and remain in place and there will be no changes to the daily business or operations.

In other recent news, DP World has commenced construction of a new container terminal, vertical quay, and silo in the Port of Novi Sad to support the Serbian agricultural industry.

The project is part of DP World’s €30 million ($21 million) investment in the port and the most significant proportion of the investment to date.

The ground-breaking ceremony was attended by the Minister of Construction, Transport and Infrastructure, Tomislav Momirović, and Mayor of Novi Sad, Miloš Vučević on 13 May.

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Maersk Finds Possible Buyers for Stake in Global Ports Investment

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A.P. Moller – Maersk (Maersk) is reportedly in talks with potential buyers for its stake in terminal operator Global Ports Investment.

The news comes as the Danish giant withdraws from Russia following a final cargo shipment this week, according to a recent report from Reuters.

Global Ports operates six container terminals in Russia and two in Finland. Russian state nuclear company Rosatom is also one of the major shareholders of the group.

The company initially announced its intention to divest its 30.75 per cent stake in Global Ports on 10 March, after the start of the Ukraine war.

Maersk has also recently stopped all vessel operations in Russia due to the ongoing conflict.

“We will not return until we think that Russia again plays a good and constructive role in the world,” Chief Executive Officer Søren Skou said in a press briefing.

The European Commission has recently implemented its fifth round of sanctions against the invading country. This included banning all Russian vessels from accessing EU ports.

The company also recently released its Q1 2022 financial results for its Ocean, Logistics, and Terminals businesses.

Maersk’s Ocean business generated $15.6 billion in revenue in the period of January to March 2022.

“The increased earnings are driven by freight rates and by contracts being signed at higher levels. While global supply chains remain under significant pressure, we continue to demonstrate superior ability to help customers overcome logistic challenges,” Skou said in a statement.

Freight rates have risen significantly due to the war, as well as China’s zero-tolerance policy to COVID-19.

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3pls, Archives, Global Logistics, Global Trade Daily, Ocean Ports

Maersk Maritime, Logistics Businesses Deliver Record Q1 2022 Results

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A.P. Moller – Maersk (Maersk) has released the Q1 2022 financial results of its Ocean, Logistics and Terminals businesses, posting significant upsurges in revenue.

The Danish giant previously reported whole company total revenues of $19.3 billion for Q1 2022 (period ending 31 March), a 55 per cent year-on-year increase.

EBIDTA more than doubled to $9.1 billion and free cash flow also rose to $6 billion.

These record figures were driven primarily by higher freight rates and strong long-term partnerships with customers seeking end-to-end supply chain support.

“In Q1 we delivered the best earnings quarter ever in Maersk with growth across Ocean, Logistics and Terminals,” said Søren Skou, CEO of Maersk.

“The increased earnings are driven by freight rates and by contracts being signed at higher levels. While global supply chains remain under significant pressure, we continue to demonstrate superior ability to help customers overcome logistic challenges.

“In Logistics, we enjoyed strong demand for products and solutions across our portfolio leading to the 5th quarter in a row with organic growth of more than 30 per cent while Terminals presented its best quarter ever.”

Maersk’s Ocean revenue for the period rose 64 per cent to $15.6 billion. As a result of retail slack season, global demand has fallen 1.2 per cent. Due to this, volumes declined by 7 per cent, however, this was offset by strong rates.

Income for the full year is expected to continue to be strong as the increase in freight rates on Maersk’s long-term contract portfolio will add approximately $10 billion to its revenue in 2021. Maersk noted this will offset the recent 21 per cent rise in costs due to higher fuel and inflationary pressure.

The company’s Logistics business also saw a large upturn in revenue, rising 41 per cent to $2.9 billion. Maersk continues to invest in acquisitions including the recent takeover of Pilot Freight Services which was finalized on 2 May.

In Terminals, revenue amounted to $1.1 billion in Q1 2022, up from $915 million in Q1 2021.

Looking forward, Maersk foresees global container demand to fluctuate slightly between -1-1 per cent, down from an earlier expectation of 2-4 per cent. This comes as trade flows and consumer confidence in Europe is negatively impacted by the Ukraine war.

As previously announced on 28 April, the whole company now expects its EBITDA for the year to come in at around $30 billion, underlying EBIT to amount to $24 billion, and free cash flow to be above $19 billion. Previously EBITDA was expected to total $24 billion in 2022.

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Maersk Dyros Undergoes Inspections

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The Maersk Dyros vessel that suffered container loss and damage last month has arrived in Lazaro Cardenas and is undergoing inspections.

On 21 March, the 4,578 TEU box ship lost around 90 containers in the North Pacific Ocean due to rough weather conditions.

Approximately another 100 containers were damaged but no crew members were injured.

In a recent customer advisory, Maersk wrote that the ship had been diverted to Lazaro Cardenas, Mexico.

“On 3 April, the ship arrived at Lazaro Cardenas, Mexico, and inspections of the vessel are already underway. The vessel is expected to come alongside on 7 April,” a representative from the Danish shipping line told PTI.

“Once alongside, the vessel will undergo further assessment and we will have more specific details on the extent of damaged containers at the end of this week.

“The discharge operations will also begin once alongside and are expected to take two weeks. The vessel will also need to be assessed for any necessary repairs, which could add additional time at Lazaro Cardenas.”

The vessel was on its way from Yantian, China, to Seattle, USA when the incident occurred.

In other news, recent bottlenecks in Far East Asia have led Maersk to change a number of its shipping schedules.

This was arguably mainly driven by the recent lockdown in Shanghai, China which has recently been extended.

Despite operations at the Port of Shanghai remaining active, Maersk-operated depots and warehouses across the city are remaining closed.