Modal Review Truck and Marine

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The following summary looks at trends in trucking and marine for the month of November 2020

By Kim Biggar

Trucking

November 10: COVID-19 Affecting Cargo Theft Trends – Truck News

North American cargo theft is on the rise this year, and the COVID-19 pandemic caused a spike in cargo crime in April.

April 2020 saw a 107% jump in cargo thefts compared with April 2019, according to CargoNet.

There have been 1,080 reported thefts in the U.S. and Canada so far this year, up to September 30.

“Most occurred within a five-month period,” said Keith Lewis, CargoNet’s vice-president of operations, referring to the height of the initial COVID outbreak in the spring. Cargo thefts decreased in September, but Lewis anticipates another increase will come in November, as holiday shipments ramp up.

November 16: IRU Warns of Trucking Insolvencies and ‘Irrevocable Damage to Supply Chains’ – The Loadstar

Road freight representatives have renewed their calls for governments around the world to provide more financial support to trucking companies amid warnings of widespread bankruptcies.

According to new research from the International Road Transport Union (IRU), the global road freight sector is poised to post a combined loss of $679 billion this year.

Despite the mounting losses, the IRU said governments around the world have done little to help a sector largely comprising small to medium-sized enterprises (SMEs).

“The vast majority of the more than 3.5 million road transport companies we represent are SMEs, and they are the glue that holds global supply chains and mobility networks together,” said IRU secretary general Umberto de Pretto.

“Most are struggling to pay their bills and this is a huge threat to the global economy.”

November 25: Trucking Companies Could See Double-Digit Rate Increases Next Year – Inside Logistics

Trucking providers should expect to see continued strong market conditions into 2021, when 10% contract rate increases could be the norm, as a lack of drivers keeps a lid on capacity and low retail inventories drive freight demand.

While carriers are scrambling to order trucks and trailers to keep up with demand, Paul Kroes, market insights leader for Thermo King Americas, predicts drivers will be the limiting factor in 2021.

Marine

November 3: Shippers Should Plan for Higher Ocean Freight Contract Prices – Lloyd’s Loading List

Cargo owners should start planning for an upwards correction in long-term ocean freight contract prices, according to container shipping consultancy Sea-Intelligence, which believes the current levels of contract rates are not high by historical standards and that the low rates enjoyed by customers in recent years are the “aberration.”

Having reviewed price developments over the past 22 years, Sea-Intelligence concluded that the current level of long-term contract rates “are not high,” except in contrast to the weak rates in recent years, which were caused by a severe vessel overcapacity resulting from the last global financial crisis.

But it also warned of major uncertainties ahead, with the coronavirus flaring up again in many major economies.

November 5: Double Whammy for Shippers: Record Rates and Surcharge Surges – The Loadstar

With shippers facing skyrocketing container freight rates and premium fees across main and secondary trades, ocean carriers are now pummelling their customers with a mass of equipment imbalance and intermodal surcharges.

The strategy of carriers is to get as many boxes back to Asia in the shortest possible time to take advantage of exceptionally strong demand and record-high rates, and to do so it is hitting shippers with extra costs.

November 6: Carriers Bullish as Shipping Contract Talks Loom: ‘It Won’t Be a Buyer’s Market’ – The Loadstar

European shippers are finding it increasingly difficult to begin annual contract negotiations with container shipping lines.

November is the traditional start of the annual contract negotiating season on the Asia-Europe trade, with deals mostly signed by the end of the year.

However, after the astonishing gains on a spot market that grew another 9% this week, it appears the relationship between carriers and their customers could be fundamentally different in 2021.

Anecdotal reports suggest some carriers are unwilling to offer shippers quotes for next year, while others are refusing to consider transferring spot customers to annual contracts.

“Some carriers have told us they are not taking any new BCO or NVO business until a review has been carried out in April, so unless you already have a contract with them, you can only book FAK cargo,” one forwarder said.

November 9: The Size of Container Vessels “May Exceed the Port of Vancouver’s Terminal Infrastructure Capacity to Accommodate Them Safely” – WorldCargo News

The Transportation Safety Board of Canada (TSB) has released its investigation report into an accident at Vancouver’s Vanterm terminal in January 2019. While berthing under the direction of a pilot, and with two tugs assisting, the 7,024-TEU vessel Ever Summit made contact with one of the port’s STS cranes. The boom of the crane collapsed on to the vessel and the crane was subsequently written off.

The investigation looked at communications with tugs during berthing, the suitability of the berth infrastructure for large container vessels at Vanterm, and overall risk management of the terminal. The report highlights a problem where the increase in vessel size has progressively whittled down the margin between safe berthing and a vessel hitting a crane at Vanterm to the point where there is very very little room for error.

November 11: Containers Are ‘the New Gold’ amid ‘Black Swan’ Box Squeeze – American Shipper

“It seems like containers are the new gold these days,” marveled Nerijus Poskus, global head of ocean freight at Flexport.

“Container availability in Asia is extremely limited right now,” added Flexport Head of North American Ocean Freight Jan Hinz during a company webinar on Tuesday. “It’s causing a lot of hardship for our customers and the shipping industry as a whole.

“We have heard anecdotal reports out of Asia that some ships are sailing with open slots simply because there is no equipment — even though there’s demand to fill the containers,” said Hinz.

November 20: Freight Forwarders Worldwide Rail Against Unfair Demurrage and Detention Charges – Handy Shipping Guide

After a six-year investigation, with the involvement of stakeholders the length of the supply chain, the U.S. Federal Maritime Commission (FMC) laid out its Final Rule on Demurrage and Detention and the reasonableness of these practices in the container shipping sector. The FMC concluded that there has most likely been a long history of unjust and unfair demurrage and detention practices. The FMC rule is intended to stop such practices to which shippers and freight forwarders alike say they have been exposed for years.

Now the British International Freight Association (BIFA) has joined FIATA (the International Federation of Freight Forwarders Associations) in calling for governments to support the key considerations and conclusions of the FMC findings. Whilst there are country and port-related variances, the FMC findings apply globally, as demurrage and detention is a common and widespread topic of contention.