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...Maersk is a bellwether of global trade, carrying about a fifth of ocean freight....
...That seems to be the strategy adopted by big container shipping companies....
...Although the disruption caused by attacks by Yemen’s Houthis has caused a surge in freight rates since mid-November, boosting shipping lines, this may be outweighed by extra costs....
...Disruption in the Red Sea because of attacks by Houthi rebels in Yemen has led most container lines to send their vessels around the bottom of South Africa rather than through the Suez Canal, pushing freight...
...The shift in transport mode, mainly a result of decisions by big container shipping line to send ships around the Cape of Good Hope, has helped push up air freight costs....
...The collapse in freight rates pushed nine-month profits at Hapag-Lloyd down almost 80 per cent as the leading German container shipping group cut its full-year guidance on a continuing gloomy outlook....
...That explains why freight rates and share prices were in the doldrums....
...Oh, and the Red Sea and Suez Canal aren’t the only pain points for container shipping! A severe drought in the Panama Canal also delayed shipping and raised freight costs late last year....
...How long it lasts depends on when order is restored to shipping lanes....
...“It is always inevitable that Hong Kong would contract as a port,” said Tim Huxley, chair of Hong Kong-based shipping investment company Mandarin Shipping. “Manufacturing moved elsewhere....
...“Almost all the major shipping companies began rerouting their ships in December already,” Volkswagen said. “This will ensure that freight reaches its destination, albeit with a slight delay.”...
...The shipping industry is heavily exposed to geopolitical ructions and swings in freight rates, which soared at the height of the Covid-19 pandemic when aeroplanes were grounded and ports jammed....
...Recent Houthi attacks on container ships in the Red Sea have begun to push up air freight rates and shown fresh pockets of demand for such services....
...The global shipping industry is contending with falling freight rates, weak consumer demand and too many ships....
...Container freight rates on east-west trades have more than doubled in four weeks....
...It’s not surprising that the shipping industry and international traders have learnt to absorb shocks without noticeable effects on world trade and inflation....
...shipping rates,” said Emily Stausbøll, market analyst at Xeneta, a shipping data firm....
...Shipping companies are widely seen as beneficiaries from the Red Sea problems as freight rates increase and investors bet that what is bad news for the global economy and retailers could bring better profits...
...Simon Heaney, senior manager in container research at London-based Drewry Shipping, said the diversions had reversed a steady downward trend in freight rates since the end of Covid restrictions....
...Freight rates are still far below the peaks of up to $14,000 reached during the pandemic....
...“The Red Sea shipping route is of great importance to Chinese merchant ships,” Yin said....
...Chinese companies have increased exports because of overcapacity in their domestic factories, and have no alternatives to using sea freight....
...Logistics companies have looked anew at routes through Russia following the decision of most large container shipping lines to divert Asia to Europe sailings that would normally go through the Suez Canal...
...But it added that it was “facing additional surcharges from carriers in relation to the longer shipping routes being taken”....
...A US-led international coalition to provide security for freight is gaining momentum. Meanwhile water levels in the Panama Canal have improved slightly....
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