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PIL Lines boosts Asia-ECSA service from a fortnightly to weekly service
Wednesday, 20 June 2018 02:59

SINGAPORE-BASED Pacific International Lines (PIL) has added capacity to the Asia-to-east coast of South America (ECSA) service - a decision that will turn its fledgling entry into that trade lane from a fortnightly to a weekly service.

Sources earlier said the carrier was preparing to add more tonnage as the freight rates on this trade lane had been "surprisingly strong," despite PIL's addition of five vessels back in April, according to IHS Media.

In addition, sources in Brazil have confirmed that PIL will launch in June a weekly service from Asia to the ECSA, on the back of rising freight rates and growing cargo volumes to/from both Argentina and Brazil, and due to a lack of space to handle that growth, particularly on the head-haul southbound lane. PIL will add 16,000 TEU of capacity, which will boost overall capacity on the trade lane to 360,000 TEU.

Dozens of shippers have complained for months about the trade lane's lack of space. It had 18 carriers squeezed into three joint services as late as 2016, in order to stop massive losses for ocean carriers, who were dealing with sub-US$600 per TEU rates on the headhaul China to Brazil for most of 2015.

After Hanjin Shipping's bankruptcy and demise, and other mergers, there were 15 carriers squeezed into just three strings prior to the PIL launch.

Shippers complained about inadequate space and the subsequent high freight rates. The rates have been among the highest in the world during the past year, at times exceeding $3,500 per FEU for the Shanghai to Santos trade. More recently, spot rates have moderated somewhat and now average about $2,200 to $2,500 per FEU for Shanghai to Santos.

One freight rate analyst said he didn't think that the addition of five more vessels, with an average of about 3,200 TEU (which is an additional 16,000 TEU for the trade lane) would add sufficient extra capacity to have a "dramatic effect on freight rates" from China to Brazil and Argentina.

"If you do the calculation and add that 16,000 TEU to the existing 360,000 TEU, you are only increasing the capacity by around 4.44 per cent," said Patrik Olstad Berglund, the CEO of Xeneta, the rate management platform. "I don't think that will be affecting the freight rates too much.

"However, if the carriers increase vessel size and another full service with vessels averaging 9,000 TEU starts up (which would be 10 x 9,000 for a weekly service) then that would be a different ball game. You have to keep reminding yourself though, that this is a volatile trade lane and things can change very rapidly."

A consultant who works for PIL confirmed that the first vessel - the 3,200-TEU Kota Machan - will launch the new weekly service and will call at Ningbo, Shekou, Singapore, Rio de Janeiro, Santos, Paranagua, Itapoa, Navegantes, Montevideo, and Buenos Aires. On the return leg back to Asia: Buenos Aires straight to Singapore, Hong Kong, then Shanghai (plus Santos on inducement).

"We are confident the demand is there and that a weekly service is what PIL's customers require," the consultant said.

The end of the line is Buenos Aires and the Kota Machan will arrive there on July 3.

PIL said a northbound call at the Port of Santos will be added "subject to inducement," but the signs coming from shippers and terminals in the Brazilian port city are that there will be at least two if not three successful "induced" calls per month.

"PIL is working hard to get the northbound Santos call as a fixed-day regular call," the PIL consultant said. "PIL has connections in Brazil for all over the world, and of course en route to Asia there are connections to east coast of Africa, the Middle East, and Arabian Gulf and we may look to add calls to South Africa in the future; we are studying this."

The Singapore-headquartered company added that the slots it currently takes out on the Multicarrier Loop 1 vessel-sharing agreement (VSA) operated by CMA CGM, Cosco, Evergreen, and Yang Ming would continue "until the end of July."

 
ONE joins big 3 lines in levying emergency bunker surcharges
Monday, 18 June 2018 01:43

Japanese liner company ONE is the latest to impose an emergency bunker surcharge, joining industry giants Maersk, MSC and CMA CGM which all imposed surcharges last week. The charges, which it has billed as a Bunker cost Recovery Surcharge (BRS) will range between $20 and $60 per teu and will start taking effect from July 1 onwards.

"ONE has encountered progressive and significant inflation of fuel costs over recent months. Bunker fuel prices have increased by more than 25% during 2018 and could escalate still further," it said in a letter to customers.

ONE continued: "This sustained surge in fuel costs has greatly impacted our cost base.The escalating cost situation has now reached the point at which ONE are forced to respond by  adjusting our approach to bunker related pricing components."

ONE said it will implement these surcharges on all trade lanes except cargo from Mainland China, following Maersk's surcharge policy. The company however is differentiating itself from its competitors by imposing varying charges for the different trade lanes as well as excluding customers that have agreed to a floating BAF mechanism in their contracts.

Transpacific, Transatlantic, Asia-Europe and Asia-Med services will all see surcharges of $50 per teu for dry containers while charges could be as high as $110 per teu for reefers on the European trades. Latin America and Africa trades along with the Asia-Oceania routes will see the highest charges of $60 per teu for dry containers while Intra-Asia will have the lowest charge of $20 per teu and Asia-Middle East comes in between with a charge of $40 per teu for dry containers.

The surcharge for reefers on the European routes is the highest among all the trades and higher than the charges of $90 and $85 per reefer teu charged across the board by Maersk and CMA CGm respectively.

"The BRS quantum will vary by trade lane and will be derived via a logical and equitable calculation mechanism.  In the meantime, The BRS will not be applied if a customer has a mutually agreed floating BAF mechanism in place as a part of their contract construction," ONE said.

"ONE continues to explore all avenues to mitigate fuel consumption and costs for the benefit of the environment and supply chain costs of our valued customers." ONE concluded.

According to Alphaliner figures, the earlier move by Maersk, MSC and CMA CGM would have covered 45.1% of capacity in the liner shipping market. With ONE joining in, another 7.0% of capacity will be affected, meaning 52.1% or more than half of global container line capacity will be applying so-called emergency bunker surcharges to deal with the sustained sharp rise in fuel prices.

 
Lazada E-logistics to open automatic sorting centre in Hanoi
Friday, 15 June 2018 02:07

Lazada E-logistics Vietnam will officially open its automatic sorting centre in Hanoi on June 12 in a move to achieve sustainable growth and meet the boom in e-commerce.

The centre, which uses robots to sort parcels, is the second of Lazada E-logistics Vietnam, following the first in Ho Chi Minh City. The new facility has a capacity of tens of thousands of parcels per hour.

The move is part of Lazada E-logistics Vietnam's strategy towards going green and sustainable by investing in environmentally friendly vehicles and technology.

"We operate dozens of e-bicycles for delivery services and are planning to increase the number of this kind of vehicle to several hundreds by the end of 2018. We are studying investment in electrically-run three-and four-wheeler vehicles for distribution in the future," said Vu Duc Thinh, country manager of Lazada E-logistics Vietnam.

The green path is thus set, but developing it remains a big challenge, as three-wheeler vehicles are banned in Vietnam.

"We need support and detailed guidelines from government agencies to encourage Lazada E-logistics and others to widely develop electrically-run three- and four-wheeler vehicles in Vietnam in the future," he added.

Lazada E-logistics and Lazada Group have recently sprouted wings to fly high, as they have received an additional investment of $2 billion from Chinese tech giant Alibaba, thus increasing its total investment in the firms to $4 billion to date.

 
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