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Russia is closing up

Updated: Apr 22, 2022



 

This week's overview 👀

🌍 Russia now cut off from global trade

🚢 Ocean: Global spread of congestion

 

💡 The figure of the week


+40 %


The index increase on low sulfur fuel oil (LSFO) since Decembre. The Russia-Ukraine conflict is affecting this price spike. Since most container ships use this fuel, surcharges are expected (BAF).


 

💬 The Quote of the week


“Three global alliances, made up entirely of foreign companies, control almost all of ocean freight shipping, giving them power to raise prices for American businesses and consumers, while threatening our national security and economic competitiveness.”

White House February 28th declaration amidst the announcement of a historic agreement between the Department of Justice and the Federal Maritime Commission (FMC).


 

Ocean: Access to Russia now closing up



While Ukrainian ports have remained cutoff ever since the beginning of the Russian invasion, global sanctions are now compelling ocean carriers to also turn away from Russian ports.

On Tuesday, Maersk announced the interruption of all stopovers in Russia, except for food, medical or humanitarian commodities. The Danish group has however confirmed that it will honor all orders placed up until the release of sanctions. Ocean Network Express (ONE) has also postponed all bookings to Novorossiysk and Saint-Petersburg.

The first companies to refuse bookings to or from Russia were Hapag-Lloyd, on Friday, and MSC, on Monday.

CMA CGM has also announced that for the time being, all cargo headed to Ukraine would be rerouted to ports of Constanza (Romania), Tripoli (Lebanon) and the Piraeus (Greece).


 

The Californian mirage: a global spread of congestion


Global headlines have mainly focused up to now on the US West Coast congestion, particularly outside the twin ports of Long Beach & Los Angeles. These are currently seeing gradual drops in congestion, but at a certain cost: new bottlenecks are now being uncovered, namely on the US East Coast with Charleston’s queue of 33 waiting vessels exceeding Savannah’s 2021 highest congestion point of 28 waiting ships.

Congestion has now spread globally, as consultancy firm eeSea points out in a recently published map of hotspots around the globe. All trades are currently affected. In their public communication, Maersk has confirmed growing congestion on its Asia-Med lines, and HMM brings forth an alarming figure: 12.4% of global vessel capacity is unavailable due to congestion, contrasting with this same indicator at 2% pre-pandemic.

In light of this disrupted situation, Savannah port has planned for a gradual 60% increase in container capacity by 2025. This permanent and long term solution contrasts with Long Beach and LA’s temporary renting of off-dock properties to reduce congestion.


 

Air: new lines to open up on the transatlantic trade



The French carrier CMA CGM, traditionally mainly ocean-based, is rapidly planning further expansions into air freight. Now applying for official authority in France, and with new orders to convert commercial planes into freighters, the shipping company’s air fleet is set to grow.

This expansion will open up new routes based out of Paris CDG (France) rather than Liège LLI (Belgium) and though no official confirmation has come through, the company’s website does present a number of new schedules, subject to permit approvals, on trade lines to and from Asia and to and from the United States (Chicago ORD in particular). An expansion to closely follow and monitor.


 

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👋 See you next week,

The Anchor Team

 

Sources :




 

hello@easygroupage.com - 59, rue Ponthieu - 75008 Paris - FRANCE

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