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Hamburg Reports Steep Declines in Cargo Volume
Hamburg, Germany’s largest port, reported that despite remaining fully operational during the first quarter its cargo volumes declined nearly eight percent to just under 32 million tons.
“The partial shutdown of the Chinese economy, resulting in blank sailings in shipping, led to lower cargo handling in Hamburg,” explained Axel Mattern, Joint CEO of Port of Hamburg Marketing in a press release details the first quarter results. He attributed the slackening of import and export that the Hamburg port experienced to the interruption of transport and supply chains caused by the corona virus.
Like many ports around the world, Hamburg experienced a significant decline in container handling during the quarter. Containers were down nearly 7 percent to a total of just over 2 million TEUs.
The port handled 579,400 TEUs for China, which was a nearly 15 percent decline, but conversely container volume to the United States grew over 20 percent to 146,100 TEUs. This growth was largely due to four new containers services started between Hamburg and the United States at the beginning of 2019.
Container volume from Hamburg to Singapore also increased by 10 percent to over 111,000 TEUs. However, Hamburg reported that the transhipment sector, or container throughput between ocean-going and feeder vessels, was especially hard hit declining nearly 11 percent. First-quarter throughput of bulk cargoes was also down nearly 12 percent.
Commenting on the outlook, Mattern says that the Port of Hamburg expects to see a continuation of blank sailings and falling total throughput. “From June, it is entirely possible that with a gradual pick-up in the economy in China and Europe, we shall be seeing an increase in sailings and rising volumes on port throughput and seaport-hinterland services,” said Mattern.
Northwest Seaport Alliance Reports Steep Volume Declines Due to COVID-19
The ports of the Pacific Northwest experienced a steep decline in cargo traffic during April due to the economic impact of the COVID-19 pandemic.
According to the Northwest Seaport Alliance, a marine cargo operating partnership of the ports of Seattle and Tacoma, total container volumes declined more than 20 percent in April to under 250,000 TEUs. Full imports declined nearly 14 percent while full exports decreased nearly 18 percent compared to year ago period.
Like many other container ports, the Northwest Seaport Alliance attributed the considerable declines to the current public health emergency that is causing disruptions in manufacturing and trade as well as the repercussions from the lingering trade dispute with China.
“It’s difficult to predict how our cargo volumes will trend, given the current uncertainty about when and how the U.S. and other economies will emerge from this crisis,” said John Wolfe, CEO of the Alliance. “While we expect a difficult second quarter, based on the currently scheduled number of blank sailings, we are cautiously optimistic for gradual improvement in the third quarter, accelerating through the fourth quarter.”
The Northwest Alliance reported that it experienced a total of 39 void sailings through April, which contributed to a 17.5 percent decline in total container volumes this year. Year to date, the ports have handled just over 1 million TEUs with only a small decline in domestic container volumes so far this year, including traffic with Alaska and Hawaii.
Despite the current challenges, all marine cargo terminals in Seattle and Tacoma remain open and operational. Combined, the ports of Seattle and Tacoma are the fourth-largest container gateway in North America and also have operations for bulk, breakbulk, project/heavy-lift cargoes, and the shipment of automobiles and trucks.
Maersk warns of 20 – 25% drop in volumes in Q2
Operator of the world’s largest container line, AP Moller - Maersk, expects to see a 20 – 25% drop in volumes across its businesses in the second quarter of 2020 due to the impact of the COVID-19 pandemic.
In the Maersk Q1 results statement ceo Soren Skou said: “Looking into Q2 2020, visibility remains low as a result of the COVID-19 pandemic. We continue to support our customers in keeping their supply chains running, however as global demand continues to be significantly affected, we expect volumes in Q2 to decrease across all businesses, possibly by as much as 20-25%.”
Due to the impact of demand on the mainline east – west trades Maersk blanked 90 sailings in Q1 leading to a 3.5% reduction deployed capacity due to idle vessel. In Q1 volumes declined 5.7% China by the almost complete halt in Chinese exports in February. The Asia – Europe trade saw a 16% drop in volumes as a result.
As lockdowns due to the pandemic spread from China across the globe in Q2 the container line expects to blank close to 140 sailings.
Looking ahead Mearsk said: “While the outlook is very uncertain, it is expected that container demand will decline in 2020 compared to 2019. At present, it is difficult to predict the timing and the shape of the recovery in global trade volumes with confidence, as it will be determined by the interplay between the path of the virus and government policies in relation to the economy.
“As a reference point, WTO projects global merchandised trade to decline by between 13-32% in 2020, and the IMF expects a decrease of 11% (goods and services) but with a significant downside risk.”
Despite the impact of COVID-19 in the first quarter Maersk reported 23% increase in EBITDA to $1.5bn compared to the same period a year earlier, and a slight increase in revenues in Q1 this year to $9.57bn compared $9.54bn in the same period in 2019.
Container volumes at major Chinese ports declined in early May
The container volume of eight major Chinese ports kept declining during the first 10 days of May.
According to China Ports and Harbours Association, cargo throughput of the major Chinese coastal hub ports declined 5.6% during first ten-day period of May, while the cargo throughput of Yangtze river hub ports dropped 11.8%.
The container volume of eight major ports declined 7.3%, with half of the ports suffering an over 15% decline, especially serving the international trades.
The crude oil throughput of major coastal ports increased 6.1%, among which growth rate of Rizhao port and Yantai port exceeded 20% while Dalian port achieved over 40% growth. However, iron ore shipments volume declined 6.5%.
Ports along Yangtze river continue to face low cargo volumes. The three major Yangtze river ports, Nanjing, Wuhan and Chongqing posted a decline of 11.8% and 25.4% for cargo throughput and container volume.
COSCO Shipping, Dongfeng Corporation and China Mobile complete 5G smart ports trial
On Monday morning an automated driverless truck for containers delivered containers to load a containership and collected unloaded containers from the vessel at the Port of Xiamen, passing a trial run as part of a project aimed at developing 5G smart ports!
The project is being developed by terminal operator COSCO Shipping Ports, Dongfeng Commercial Vehicle and China Mobile (Shanghai) Information Communication.
The trio developed the first customized platform port for driverless trucks enabled by 5G and the smooth completion of the trial run has cleared the way for actual production and operation.
The trial run was attended by China COSCO SHIPPING, China Mobile Communications Group and Dongfeng Motor Corporation via a“5G+ Driverless-enabled Smart Ports” online conference, which took place in six cities, namely Beijing, Shanghai, Wuhan, Shiyan, Hong Kong and Xiamen.
The conference marked moving of the project into the implementation stage of the 5G smart port in Xiamen Ocean Gate Terminal.
Furthermore, COSCO SHIPPING Ports, COSCO SHIPPING Technology Co., Ltd and China Mobile (Shanghai) ICT have issued the Implementation Plan And Roadmap For 5G Smart Ports, which sets out the definition and vision of 5G smart port construction.
By 2025, the coastal container hub ports aim to initially establish an intelligent system with comprehensive perception, ubiquitous interconnection, and port-vehicle collaboration, as proposed in the Guiding Opinions on Building Word-class Port.
Hapag Lloyd gets 2020 off to a decent start despite COVID-19
For the first quarter of 2020, Hapag-Lloyd recorded earnings before interest and taxes (EBIT) of USD 176 million (EUR 160 million), which is below the corresponding prior-year figure of USD 243 million (EUR 214 million). The Group net result declined to approximately USD 27 million (EUR 25 million). Earnings before interest, taxes, depreciation and amortisation (EBITDA) decreased slightly to USD 517 million (EUR 469 million).
“Despite the coronavirus pandemic, we have gotten the year off to a good start. Higher transport volumes and better freight rates have boosted our revenues. The financial result is below the first quarter of the previous year as we faced higher bunker prices after the new IMO 2020 rules on 1 January and we had a significant negative bunker stock valuation after the decline in crude oil prices at the end of the first quarter,” said Rolf Habben Jansen, Chief Executive Officer of Hapag-Lloyd AG.
Revenues increased in the first quarter of 2020 by around 6 percent, to USD 3.7 billion (EUR 3.3 billion). This can primarily be attributed to a 4.3 percent increase in transport volumes, to more than 3 million TEU, and an improved average freight rate of USD 1,094 per TEU. Transport expenses increased by almost 10 percent, disproportionately to revenues, particularly due to higher bunker costs, which increased by USD 98 to USD 523 per tonne as a result of the transition to low-sulphur fuel oil required by the IMO 2020 regulation. This had a negative impact on earnings, as did a devaluation of bunker inventories of around USD 64 million (approximately EUR 58 million) due to the rapid decline in crude oil prices that began at the end of the first quarter.
Free cashflow was once again clearly positive at USD 302 million (EUR 274 million). At the end of the first quarter, the liquidity reserve stood at approximately USD 1.2 billion (EUR 1.1 billion), thereby remaining at a persistently good level.
Rolf Habben Jansen: “Although we were able to pick up a bit of tailwind at the beginning of the year, we anticipate that the coronavirus pandemic will have very significant impacts in 2020, beginning in the second quarter. Our main focuses will continue to be the safety and well-being of our employees as well as the supply chains of our customers. We have taken a wide range of measures designed to save an amount in the mid-triple-digit million range to safeguard our profitability and liquidity. We adjust our service network to the lower demand and seek savings in all cost categories, from terminal, transport, equipment and network costs to overhead.”
Taking into account the prevailing uncertainties and building on the planned cost cutting measures as well as based on the premise that the pandemic will peak in the second quarter and give way to a gradual recovery in the global economy in the second half of the year, the Executive Board has substantiated its earnings forecast from the start of the year. This means that Hapag-Lloyd still continues to expect EBITDA of EUR 1.7 to 2.2 billion and EBIT of EUR 0.5 to 1.0 billion for the current financial year. However, unless there is a recovery in demand for container transport services earlier and stronger than expected in the market studies cited in the financial report for the first quarter 2020, the upper end of the forecast ranges is barely achievable from today's perspective.
The opening four months of the year have seen the nation’s total import turnover rise to over US$78 billion, a drop of 0.3%, with China maintaining its place as the country’s largest import market, according to figures released by the General Department of Customs
Elsewhere, in terms of turnover scale, Asia represents the largest trading market for the nation.
Throughout the reviewed period Vietnamese trade with the Asian market reached US$103.61 billion. Despite suffering a slight annual decrease of 0.4%, the continent accounted for 65.2% of overall import and export turnover for the country.
Most notably, although declines occurred in the majority of major markets, Asia still maintains 80.1% of the nation’s total import turnover.
With a general decline occurring across the board, several import groups recorded slow or negative growth.
The only commodity group to enjoy increases over the four-month period were computers along with electronic products and components. Indeed, these items represent the nation’s largest import group of the reviewed period.
Since the start of the year, imports of computers, electronic products and components reached approximately US$17.6 billion, representing a 11.5% increase on-year.
In particular, FDI enterprises spent a total of US$14.7 billion during the period, equivalent to 84% of the total import value of computers, electronic products and components, an increase of 11.7% from last year.
The Republic of Korea remains the largest consumer of Vietnamese computers, electronic products and components with a value of US$5.44 billion, a drop of 6.1%, followed by China, Taiwan (China), and the United States.
Other import items which recorded remarkable growth include crude oil, in addition to telephones and components.
Despite a number of items recording growth, the General Department of Customs noted that several key import groups endured a decrease in turnover of up to hundreds of millions of dollars during the reviewed period.
The commodity group that suffered the largest fall in turnover was petroleum, with a total import volume of 2.4 million tonnes over the four-month period, a sharp decline of 41.7%, equivalent to US$800 million, in comparison with last year’s same period.
Completely built-up automobiles, along with iron and steel, also recorded sharp drops, with falls of US$430 million and US$290 million, respectively.
Indeed, the commodity groups which suffered the biggest drops in import turnover are those that make major contributions to the customs sector’s revenue.
(Source: Vncustomsnews,The Maritime Executive, American Shipper, Seatrade Maritime)
