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Wan Hai starts slotting on OCEAN’s Asia-USWC ‘PSW6’
Wan Hai Lines has started to co-load on the OCEAN Alliance AsiaUSWC ‘PSW6’ loop operated by its Transpacific partner COSCO Shipping who now brands the service as ‘SEA’. Wan Hai is using the new ‘CP8’ brand for this weekly service turning in seven weeks and calling at Kaohsiung, Cai Mep, Nansha, Hong Kong, Yantian, Kaohsiung, Long Beach, Kaohsiung. The ‘PSW6’ is in the process of being upgraded and its fleet of six OOCL-operated 8,900 teu ships is being replaced by seven 13,400 -14,500 teu vessels of COSCO. The ‘PSW6/CP8’ service allows Wan Hai to continue offering sailings from Cai Mep, Nansha, Hong Kong and Yantian to Long Beach.These four Asian ports had recently been removed from the schedule of Wan Hai’s Indian Subcontinent - Far East - USWC pendulum service. Jointly with COSCO, this service was recently affected by the withdrawal of PIL, Wan Hai’s former partner on the transpacific route.
CMA CGM receives Sub-Panamax newbuild
French container shipping major CMA CGM has taken delivery of CMA CGM Sinnamary, a Sub-Panamax newbuild vessel.
The 2,300 TEU ship was built at Jiangsu New Yangzijiang shipyard in China.
The Cyprus-flagged containership has left Shanghai and will soon operate on the company’s NEFGUL service that connects French Guyana and Brazil to Northern Europe, CMA CGM said on its social media platforms.
CMA CGM Sinnamary was ordered by Credit Agricole back in 2017 as part of a three-vessel order. Its sister ships, CMA CGM Kourou and Douce France were completed by Jiangsu Yangzijiang earlier this year, according to data provided by VesselsValue.
Container lines divert 20 services via the Cape of Good Hope
At least 20 container line sailings between Asia -Europe/US East Coast have diverted to going via the Cape of Good Hope rather than the Suez Canal, according to analyst Alphaliner.
The impact of the COVID-19 pandemic and much lower bunker prices has seen a sharp upturn in the number of container line services between Asia and Europe and Asia and the US East Coast diverted by the Cape of Good Hope including three fronthaul services.
At least 20 container line sailings between Asia -Europe/US East Coast have diverted to going via the Cape of Good Hope rather than the Suez Canal, according to analyst Alphaliner.
The impact of the COVID-19 pandemic and much lower bunker prices has seen a sharp upturn in the number of container line services between Asia and Europe and Asia and the US East Coast diverted by the Cape of Good Hope including three fronthaul services.
“A unique combination of a container tonnage surplus and rock-bottom bunker prices has increasingly prompted ocean carriers to avoid the canal - and thus its fees - and re-route vessels via the Cape of Good Hope,” Alphaliner said.
According to Ship and Bunker the price of Very Low Sulphur Fuel Oil (VLSFO) stood at $252 per tonne in Singapore on 5 May compared to well over $700 per tonne early in the year.
“Typically, the drawbacks of the longer routing would be mitigated by increasing voyage speed by a few knots, skipping ports, and adding a handful of days to service rotations,” Alphaliner said.
Alphaliner said that nine backhaul Europe - Asia sailings and eight eastbound US East Coast - Asia sailings had opted to sail via the Cape of Good Hope. More unusually it reported that CMA CGM had rerouted three fronthaul Asia – Europe services via the Cape as well.
The distance of sailing via the Cape of Good Hope is 11,720 nm compared to 8,440 nm transiting the Suez Canal adding significantly to the length of voyages.
As reported by Seatrade Maritime News earlier this week the Suez Canal Authority (SCA) has deepened discounts for containership transits in an attempt to stem the switch to sailing via the Cape of Good Hope.
The impact of lines choosing to sail via the Cape of Good Hope to the Suez Canal comes on top of that from blanked sailings on the Asia – Europe trade due to the drop in demand in Europe caused by COVID-19.
ONE expands its reefer fleet with 5,000 new units
The Ocean Network Express (ONE) company has announced the expansion of its reefer container fleet capacity with the addition of 5,000 units (40 "HC), including 200 units equipped with advanced controlled atmosphere technology (AC), to meet the growing demand for refrigerated cargo worldwide. "With this new investment, ONE demonstrates its firm commitment to meet the growing demand for trade in reefer containers," the company stated.
In 2019, the global volume of refrigerated containers grew by more than 7%, driven in part by the increase in the expansion of the middle class in Asia that is constantly demanding healthy food options.
Despite the challenges posed by the coronavirus pandemic, the prospect of refrigerated container transport continues to be strong in 2020 and ONE expects it will continue to grow in the remaining months of the year.
ONE is currently working on the application of the latest IO technology in its refrigerated container fleet. This technology allows checking critical information and key indicators, such as temperature and humidity inside the container, in real-time, thus improving the perishables transport value chain.
"As one of the world's leading reefer container carriers, ONE is continually investing in new reefer containers to meet the growing demand for perishable cargo worldwide. We are committed to providing our customers with the most up-to-date refrigerated containers so that they can ship their perishable products and expand to new markets around the world," stated Jun Shibata, Senior Vice President of Strategic Performance Management.
ONE's global refrigerated strategy is developed by the Global Refrigerated Business Planning (GRBP) team, based at ONE's headquarters in Singapore, which carries out the company's shipping and global refrigerated business through close monitoring of market demand and collaborating with regional reefer container management boards located in different parts of the world.
Hapag-Lloyd CEO: We are well-positioned to weather the storm
The COVID-19 pandemic seems to have shattered the ability of analysts to predict the outlook for the global economy putting a veil of uncertainty on different market prospects including shipping.
Predictions are being revised downwards ever more frequently as new metrics and factors are being considered as they emerge.
One thing is definitely certain, it is likely to get worse before it gets better. Even the IMF believes that the Great Lockdown is set to bring worse times for the global economy than the Great Depression.
What about container shipping?
Clarksons recently downgraded its forecast for the container shipping industry for 2020, announcing a decline of around 11 percent.
Numerous parallels are being made between 2020 and the 2008 economic crisis, however, analysts disagree on the mode of the recovery, which is not expected to be V-shaped this time around.
When it comes to comparing 2020 with the scenario the container shipping market was faced with back in 2008 and 2009, one crucial factor is completely different.
The order book for container shipping in 2008 accounted for 50 percent of the global fleet which considerably hampered the recovery of the sector post-economic crisis, CEO of the German container shipping company Hapag-Lloyd Rolf Habben Jansen said in a press briefing this morning.
The tremendous amount of ships coming into the fleet aggravated the supply and demand balance prolonging the recovery tempo of the sector.
The situation today is materially different, Jansen pointed out, as the order book currently stands at a record low level with 0.2 percent of the world fleet.
Low order book combined with little to no incentive to order new ships at the moment should balance out the demand-supply situation and provide relief in the expected recovery.
A high level of idle fleet due to drydocking and scrubber retrofits should also provide some ease.
As such, Jansen expects to see a recovery for the market starting in the third quarter of this year and moving into 2021.
Prepare for the worst, hope for the best
The German liner giant said that it has secured additional liquidity just in case it might need it, stressing that the company has a healthy cash balance at the moment and a solid balance sheet.
“We are well-positioned to weather the storm,” Jansen said.
The company has no plans to cut the number of its employees at the time being, but this might change if the situation turns for the worse.
Like its numerous counterparts, Hapag-Lloyd has been cutting costs where possible through capacity adjustments and blanking of sailings, cutting between 15 and 20 percent of its capacity.
Furthermore, all non-essential investments, including ordering of new ships are being reconsidered and delayed.
Another way the company is cutting costs is by avoiding the Suez Canal, and, sending ships around the Cape of Good Hope.
As explained, the cost involving the Suez Canal crossing is very significant, while bypassing the canal doesn’t change the transit times that much.
Pandemic’s impact on crew changes
The impact of the pandemic on the crew changes across the world has been one of the burning issues in the industry and Hapag-Lloyd has not been spared either.
Commenting on the challenges surrounding the signing off of crew members and signing on new crew members, the company’s Managing Director of Fleet Management, Captain Richard von Berlepsch, said the situation was not impacting the company’s business operation at the moment.
However, the changing state rules on lockdown measures and travel restrictions have impacted at least 200 seafarers employed on the company’s ships whose sign-offs were delayed.
As explained, the situation is getting more difficult every day due to the changing rules, adding to the frustration of seafarers.
The company said it was in dialogue with relevant bodies and companies trying to mitigate the impact of this issue on its seafarers, but a more coordinated response from governments would be key in resolving the crisis.
Until now, Hapag-Loyd hasn’t had any infection cases on board its ships.
The German shipping company is scheduled to announce its figures for the first quarter of this year next week.
(Source: MaritimeNews, American Shipper, Seatrade Maritime)
