Many of our customer are asking what will be the effects of Brexit on non EU imports and exports, China, or India for example?
The main point to consider is how or if this business will be caught up in the near certain short-term chaos that may drastically trade with the UK and EU countries.
Our view is that this will be limited – ports used for deep sea trade have only small amounts of EU business.
It seems there has been a ceasefire from the USA side on escalating the duty surcharge from China to 25% from 1 January 2019.
The idea, as announced at the Argentine G20 summit over the weekend is that this will allow talks to proceed between President Xi of China and president Trump.
The US are stating that China will agree to purchase a very substantial amount of agriculture, energy, industrial and other products from the USA.
US container imports to the USA are at record levels at the present time. This comes as no surprise and is a direct consequence of the ‘Trump Tariff’, the threat of 25% surcharges on Chinese origin goods entering the United States after 1 January 2019.
The consequence, unsurprisingly, is a surge in rates into the USA as well as container ‘roll overs’, where bookings are postponed to a following weekly service due to overbooking.
With the introduction of the fuel surcharge of around $ 60.00 per 20 foot container earlier this month it may seem that container freight rates are at an all time high.
The reality is somewhat different. If we go all the way back to 1998 and adjust for inflation freight rates are in fact around a half what they were back then. Even as recently as 2013 rate were 50% higher than they are now.
The fire on the Maersk Honam earlier this month which sadly cost the life of four of the crew on route from Singapore to Suez has again drawn attention to what happens when a ship owner declares ‘General Average’.
Many companies transporting goods by sea to and from China, India, the USA and all other parts of the world for that matter often do not appreciate that should a ship be in danger that will cause a ship owner or cargo owner loss,
Freight rates in the container shipping industry have declined over recent years as the world economy stagnated and the industry became clogged with over-capacity. Typically rates have decreased by 40% in real terms over a four year period on major world trade lanes.
One of the big causes of over capacity has been the increase in the size of ships, with all major carriers ordering ships in the 18000 – 22000 TEU unit size (TEU = twenty foot equivalent unit).
Shipping Line Alliances:
You may be under the impression that there are a whole host of shipping lines operating on the world’s major trade lanes, all competing against each other to carry your business.
The reality has been rather different for quite some time as the shipping lines operating on the major trade lanes have formed a series of alliances that have pooled their ships and operational infrastructure and so operationally they operate as one company.
We thought you might be interested to know the trends in 2017 for the sea freight container market from the Far East and China in particular to the UK.
According to consultancy Xeneta, container lines operating on Asia-Europe trades are “taking stronger measures” than usual to maintain the recent recovery in ocean freight prices. These stronger measures amount to a 33% cut in sailings immediately prior to Chinese New Year followed by 43% cuts in sailing post Chinese New Year.
If you or your suppliers send goods by sea in containers will become mandatory for all containers worldwide to have their Verified Gross Mass (gross weight) declared prior to loading on a ship from 1 July 2016.
This is an important change from the current system where weights are advised at the time of booking by the party loading the container and this weight is passed to the ship’s owner,
From July this year an import change to the SOLAS (Safety Of Life At Sea) regulations comes into effect that will impact on all containers sent by ship, worldwide. Each container’s gross mass will have to be declared at export using weighing equipment that has been certified as being accurate.
The background is that overweight containers played a key role in the breakup and beaching of the MSC Napoli in the United Kingdom in 2007,