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Singapore’s Container Figures at Record High
The Port of Singapore’s container throughput in 2019 hit an all-time high of 37.2 million TEUs, amidst challenging global economic conditions driven by geopolitical tensions and trade wars.
The port’s container throughput increased 1.6% from the 36.6 million TEUs registered in 2018, the Maritime and Port Authority of Singapore (MPA) said.
Overall, the port handled a total of 626.2 million tonnes of cargo in 2019, with the vessel arrival tonnage hitting 2.85 billion Gross Tonnage (GT).
The port’s bunkering performance was steady, registering a bunker sale volume of 47.5 million tonnes in 2019. When compared to the figures from the previous two years, the bunker sales were somewhat down as the bunker sale volume stood at 49.8 million tons in 2018 and 50.6 million tons in 2017.
Singapore, one of the biggest bunker ports in the world, is reportedly experiencing heavy queuing at the port as vessels wait in line to bunker compliant fuels now that the IMO 2020 regulation has entered into force.
What will be the impact of the new regulation on the port’s bunkering performance this year remains to be seen.
“The Singapore Registry of Ships continues to rank amongst the top ship registries in the world, reflecting Singapore’s reputation as a quality flag of choice for international ship owners,” the MPA added.
The total tonnage of ships under the Singapore flag reached 97.3 million GT in 2019.
THE Alliance Upgrades Service Network as It Welcomes HMM
THE Alliance has unveiled an expanded service network for 2020 as it is welcoming South Korea’s shipping company Hyundai Merchant Marine (HMM) as a new full member.
With the US Federal Maritime Commission’s acceptance of HMM membership, the carrier will join its three counterparts in the alliance, Hapag-Lloyd, Ocean Network Express (ONE), and Yang Ming.
THE Alliance plans to launch the upgraded product package around April 1, 2020. Based on the existing network of THE Alliance, the new package will offer increasing frequency particularly from South East Asia, as well as new direct port coverage and improved transit times.
As World Maritime News previously reported, HMM is expected to add some 34 ships to THE Alliance’s network this year, adding up to 519,000 TEUs. In the coming months, the company will start taking delivery of twelve 23,000 TEU and eight 15,000 TEU newbuilds. The 23,000 TEU giants will be deployed in the Far East-North Europe trade and will further strengthen THE Alliance’s service portfolio.
Specifically, the upgraded package includes a new pendulum service replacing the existing Asia-Europe FE5 and Transpacific PS7 services. This new service, to be further named, will be operated by eighteen 14,000+ TEU ships and provides added weekly Transpacific coverage between South East Asia and Southern California, thereby expanding the number of services directly covering this lane to three, in addition to FP1 and PS3. A modified PS3 will offer new direct coverage of Haiphong.
Further to the enhanced Transpacific coverage of South East Asia, a new Transpacific loop, PS8, focusing on Central China and Korea — including new coverage of Incheon — will be inaugurated around April 1, 2020.
For Asia and North Europe, the group will deploy two 20,000+ TEU vessel services in a newly revised FE2 and FE4 design which will bring economies of scale and environmental benefits.
THE Alliance Unveils Expanded Service Network for 2020
The members of THE Alliance, Hapag-Lloyd, Ocean Network Express, and Yang Ming are happy to welcome Hyundai Merchant Marine as a new core member of THE Alliance. With the FMC acceptance of HMM membership, THE Alliance offers an attractive upgraded product package and it will be launched around April 1st, 2020. Based on the existing comprehensive network of THE Alliance, the newly enhanced product package will offer increasing frequency particularly from South East Asia, as well as new direct port coverage and improved transit times.
The upgraded service package includes:
A new pendulum service replacing the existing Asia-Europe FE5 and Transpacific PS7 services with a new highly efficient design. This new service, to be further named, will be operated by 18 modern 14000+ TEU ships and provides added weekly Transpacific coverage between South East Asia and Southern California, thereby expanding the number of services directly covering this lane to three, in addition to FP1 and PS3.
A modified PS3 will offer new direct coverage of Haiphong creating more value and choice for the customers.
Further to the enhanced Transpacific coverage of South East Asia, a new Transpacific loop, PS8, focusing on Central China and Korea (including new coverage of Incheon) will be inaugurated around 1st April 2020.
For Asia and North Europe, the group will deploy two efficient 20,000+ TEU vessel services in a newly revised FE2 and FE4 design which will bring economies of scale and positive environmental benefits.
THE Alliance outlined its enhanced service network as follows:
Asia and North Europe
FP1 – From TPWC – Shimizu – Kobe – Nagoya – Tokyo – Singapore – (Suez Canal) – Rotterdam – Hamburg – Le Havre – (Suez Canal) – Singapore – Kobe – Nagoya – Tokyo – To TPWC
FE2 – Pusan – Shanghai – Ningbo – Yantian – Singapore – (Suez Canal) – Southampton – Le Havre – Hamburg – Rotterdam – (Suez Canal) – Port Kelang – Pusan
FE3 – Hong Kong – Xiamen – Kaohsiung – Yantian – (Suez Canal) – Rotterdam – Hamburg – Antwerp – Southampton – (Suez Canal) – Jebel Ali – Singapore – Yantian – Hong Kong
FE4 – Qingdao – Pusan – Ningbo – Shanghai – Yantian – (Suez Canal) – Algeciras – Rotterdam – Hamburg – Antwerp – London Gateway – Algeciras – (Suez Canal) – Singapore – Qingdao
FE5 – From TPWC – Laem Chabang – Cai Mep – Singapore – Colombo – (Suez Canal) – Rotterdam – Hamburg – Antwerp – Southampton – (Suez Canal) – Jeddah – Singapore – Laem Chabang – Cai Mep – Hong Kong – Yantian – To TPWC
Asia and the Mediterranean
MD1 – Qingdao – Pusan – Shanghai – Ningbo – SPRC – Singapore – Jeddah – (Suez Canal) – Damietta – Barcelona – Valencia – Tangier – Genoa – Damietta – (Suez Canal) – Jeddah – Singapore – SPRC – Qingdao
MD2 – Pusan – Qingdao – Shanghai – Ningbo – Kaohsiung – SPRC – Singapore – (Suez Canal) – Piraeus – Genoa – La Spezia – Fos – Genoa – Piraeus – (Suez Canal) – Singapore – SPRC – Pusan
MD3 – Pusan – Ningbo – Shanghai – SPRC – Singapore – Jeddah – (Suez Canal) – Ashdod – Istanbul – Izmit – Aliaga – Mersin – Ashdod – (Suez Canal) – Jeddah – Singapore – Kaohsiung – Pusan
Asia and the Middle East / Red Sea
THE Alliance will provide more details of 3 Asia – Middle East products in a subsequent PR. Full rotation will also be included in the next PR.
AR1* – Pusan – Shanghai – Ningbo – Shekou – Singapore – Port Kelang – Jeddah – Aqaba – Sokhna – Jeddah – Singapore – Pusan
*HMM will not participate on the AR1
Transpacific – West Coast
PN1 – Xiamen – Kaohsiung – Ningbo – Nagoya – Tokyo – PNW – Tokyo – Kobe – Nagoya – Xiamen
PN2 – Singapore – Laem Chabang – Cai Mep – Haiphong – Yantian – PNW – Tokyo – Kobe – Singapore
PN3 – Hong Kong – Yantian – Shanghai – Pusan – PNW – Pusan – Kaohsiung – Hong Kong
PN4 – Qingdao – Ningbo – Shanghai – Pusan – Prince Rupert – PNW – Pusan – Kwangyang – Qingdao
FP1 – From Europe – Singapore – Kobe – Nagoya – Tokyo – LA/LB – Oakland – Tokyo – Shimizu – Kobe – Nagoya – Tokyo – Singapore – To Europe
PS3 – Nhava Sheva – Pipavav – Colombo – Port Kelang – Singapore – Cai Mep – Haiphong – LA/LB – Oakland – Pusan – Shanghai – Ningbo – Shekou – Singapore – Port Kelang – Nhava Sheva
PS4 – Xiamen – Yantian – Kaohsiung – Keelung – LA/LB – Oakland – Keelung – Kaohsiung – Xiamen
PS5 – Shanghai – Ningbo – LA/LB – Pusan – Shanghai
PS6 – Qingdao – Ningbo – Pusan – LA/LB – Oakland – Kobe – Qingdao
PS7 – From Europe – Jeddah – Singapore – Laem Chabang – Cai Mep – Hong Kong – Yantian – LA/LB – Oakland – Japan – Hong Kong – Laem Chabang – Cai Mep – Singapore – Colombo – To Europe
PS8 – Shanghai – Kwangyang – Pusan – LA/LB – Oakland – Pusan – Kwangyang – Incheon – Shanghai
Transpacific – East Coast (via Panama and Suez Canals)
EC1 – Xiamen – Kaohsiung – Hong Kong – Yantian – Pusan – Tokyo – (Panama Canal) – Manzanillo – Savannah – Jacksonville – Charleston – Norfolk – Manzanillo – (Panama Canal) – Panama Pacific Call – Tokyo – Kobe – Xiamen
EC2 – Qingdao – Ningbo – Shanghai – Pusan – (Panama Canal) – Caribbean hub – New York – Wilmington – Savannah – Charleston – Caribbean hub – (Panama Canal) – Pusan – Qingdao
EC3 – Ningbo – Shanghai – Pusan – (Panama Canal) – Caribbean hub – Savannah – Norfolk – Charleston – Caribbean hub – (Panama Canal) – Panama Pacific Call – Pusan – Ningbo
EC4 – Kaohsiung – Hong Kong – Yantian – Cai Mep – Singapore – (Suez Canal) – New York – Norfolk – Savannah – Charleston – New York – (Suez Canal) – Singapore – Kaohsiung
EC5 – Laem Chabang – Cai Mep – Singapore – Port Kelang – Colombo – (Suez Canal) – Halifax – New York – Savannah – Jacksonville – Norfolk – Halifax – (Suez Canal) – Jebel Ali – Singapore – Laem Chabang
Transatlantic*
AL1 – Rotterdam – Hamburg – Antwerp – London Gateway – Norfolk – Philadelphia – New York – Halifax – Rotterdam
AL2 – Le Havre – London Gateway – Rotterdam – Hamburg – New York – Charleston – Savannah – Le Havre
AL3 – Antwerp – Hamburg – London Gateway – Charleston – Port Everglades – Houston – Savannah – Norfolk – Antwerp
AL4 – London Gateway – Antwerp – Hamburg – Le Havre – Veracruz – Altamira – Houston – New Orleans – London Gateway
AL5 – Southampton – Le Havre – Rotterdam – Hamburg – Antwerp – Savannah – Cartagena – (Panama Canal) – Balboa – LA/LB – Oakland – Seattle – Vancouver – Oakland – LA/LB – Balboa – (Panama Canal) – Cartagena – Caucedo – Savannah – Southampton
*HMM will not participate on the Atlantic Trade
The newly upgraded service network which is expected to commence from around April 1st, 2020 will offer the respective clients better choices with much broader coverage and improved service frequency. THE Alliance will continue to bring innovative product solutions to the East/West Trades.
THE Alliance members will continue to provide updates on the upcoming product changes as we approach the new service launch.
Ocean Alliance Launches Its Day 4 Product
The Ocean Alliance has signed an agreement for its Day 4 product which will start operation in April 2020.
The Ocean Alliance is the world’s largest operational agreement between shipping companies and involves container ships from CMA CGM, COSCO Shipping, Evergreen and OOCL.
The Day 4 Product will involve the operation of 325 container ships, 112 of which will be operated by the CMA CGM Group, 38 services and an estimated carrying capacity of around 3.8 million TEUs.
The evolution of the product will include:
• 19 services on the Transpacific trade
• Seven services between Asia and Europe
• Four services between Asia and the Mediterranean
• two Transatlantic services linking North Europe to the East Coast of the United States and the Gulf of Mexico
• Four services between Asia and the Middle East and
• Two Asia-Red Sea services.
The Day 3 product, effective from April 2019, involved a similar vessel deployment and carrying capacity with 19 Transpacific services (with 12 Asia - West Coast North America services), seven Asia - Europe services, five Asia- Mediterranean services, eight Pacific Southwest services, four Pacific Northwest services, seven Asia - East Coast North America and U.S. Gulf services, two Transatlantic services, four Asia – Middle East services and two Asia - Red Sea services.
The launch of the Day 4 product comes one year after the extension of Ocean Alliance until 2027. The alliance was launched in Spring 2017.
Imports at Top US Ports to Return to Normal After Year of Tariff Surges
Volume at the US major retail container ports is expected to return to its usual seasonal patterns during the first few months of 2020 after a year of fluctuations driven by the uncertainty of the trade war with China, according to the National Retail Federation and Hackett Associates.
“We’ll be more confident after we see the Phase One agreement signed, but right now 2020 looks like it should be back to what used to be normal,” Jonathan Gold, NRF Vice President for Supply Chain and Customs Policy, said.
“We’ve been through a cycle of imports surging ahead of expected tariff increases – some of which got delayed, reduced or canceled – and falling off again afterward. That’s not good for retailers trying to manage their inventory levels or trying to make long-term business plans. And tariffs are never good for consumers, businesses or the economy.”
“It is not surprising that even the Federal Reserve suggests that the impact of the trade war has a negative impact on the U.S. economy,” Ben Hackett, Hackett Associates Founder, pointed out, citing recent government data on declines in industrial production and increases in inventory-to-sales ratios.
“This combination of reduced output counterbalanced by increased inventory underlies the uncertainties of the tariff wars.”
President Trump is scheduled to sign a “Phase One” partial trade deal with China on January 15. In announcing the deal, the administration said it would lower tariffs that took effect in September and cancelled another round that was set to take effect December 15, but others remain in effect.
U.S. ports covered by Global Port Tracker handled 1.67 million TEUs in November 2019. That was down 11.2 percent from October and down 7.5 year-over-year.
With on-again, off-again progress on trade negotiations reported throughout the fall and other factors affecting shipping, an expected surge ahead of the canceled December tariff increase did not materialize.
December was estimated at 1.7 million TEU, down 13.4 percent from unusually high numbers seen in December 2018, when retailers had frontloaded imports ahead of a scheduled January 1, 2019, tariff increase that was ultimately postponed.
While numbers for the full year are not yet final, estimates indicate that 2019 came in at 21.6 million TEU, a 0.9 percent decrease from 2018 but still the second-highest year on record. Imports during 2018 hit a record 21.8 million TEU, partly due to frontloading ahead of anticipated 2019 tariffs.
January 2020 is forecast at 1.8 million TEU, down 5 percent from January 2019.
Hapag-Lloyd Sets Sights on New Orders
German shipping company Hapag-Lloyd is considering an investment in new ships after a long period of keeping its ordering appetite at bay.
“We will have to start replacing ships in our fleet from 2022, 2023,” Rolf Habben Jansen, CEO of Hapag-Lloyd was cited as saying by Reuters following a press conference in Hamburg last week.
The investments are likely to target ultra large containerships with the capacity of up to 23,000 TEU, following in the footsteps of its rivals like CMA CGM and MSC, which have already employed some of their colossal newbuilds on the Europe-Asia route.
Following the integration of its business with United Arab Shipping Company (UASC), Hapag-Lloyd became the fifth-largest container shipping company in the world and had no need to order new tonnage as UASC provided it with modern tonnage influx, including ships of 19,000 TEU.
A Hapag-Lloyd spokesperson confirmed to World Maritime News that orders of new ships “are most likely until 2021”.
The company did not provide further details on the targeted size of ships being planned.
Over the past decade, ordering in the containership sector has been dominated by the interest in large ships with over 10,000 TEU in capacity. Based on the data from Alphaliner, the total capacity of the world’s cellular containership fleet passed the 23 million TEU mark following the delivery of two more Pegasus class vessels to MSC last September.
Nevertheless, the ordering spree in the sector since 2017 has considerably widened the gap between the supply and demand, in particular as deliveries of ultra-large container ships continued sending relatively smaller ships onto other routes. As such, the question of overcapacity and filling of these mega-ships with enough cargo to avail of the economies of scale lingers.
Outlook for 2020
The fleet modernization commentary was made as Hapag-Lloyd was announcing its expectations for business performance in 2020.
Jansen believes that this year will be impacted the most by the IMO 2020 sulphur regulation’s entrance into force.
“The costs involved in converting vessels and using the new fuel will be high. Since the lion’s share of our fleet will sail with the new low-sulphur fuel oil, we expect additional costs of around 1 billion US dollars per year,” he said earlier this month in a market review.
The CEO of the German major believes climate action, especially in Europe, would exert further pressure on liners. Namely, shipping is proposed to be included in the European carbon market (known as the ETS) and pay for its CO2 emissions.
Hence, the search for alternative fuels will become even more important as companies rush to cut their carbon footprint and at the same time battle to keep their businesses healthy.
The perfect storm in container shipping is also facilitated by the ongoing trade tensions and geopolitical factors.
“We live in times that continue to be turbulent in political terms. Trade conflicts can have an impact on trade routes, and they can steer global economic growth in one direction, but also in the other. We will have to live with these possible fluctuations and manage them as best we can,” Jansen said.
“A year and a half ago, we adopted our Strategy 2023 and set ourselves the goal of becoming the number one for quality among carriers. We are continuing to pursue this goal. In the near future, we will publish a set of quality promises by which we will be measured going forward. We will continue to invest heavily in digital products and services. And we will continue to concentrate on expanding our business in growth regions, such as Africa, the Middle East and India.”
Investment in new terminals is also being considered, however, for this year Hapag-Lloyd will hold off from any new investments amid the expected impact from the IMO 2020 regulation on its business performance.
(Source: American Shipper, Seatrade News World Maritime News)
