This article from the Loadstar indicates that supply chain firms such as Flexport are struggling to align themselves for the volatile tariff situation we have now. Some firms are leaving China but others are staying in and look for an alternate shipment method with more speed and smaller inventory.
SF Airlines (Wikipedia) is a Chinese cargo airline with headquarters in Shenzen, Guangdong Province. They have about 55 aircraft. SF submitted an application to the USDOT last week for a 3x per week service on the Hangzhou-New York route. We will see if approval is granted.
Flexport indicated they are seeing a dropoff in trade with China. But 3PLs like Flexport work to help companies transport goods from anywhere. Rearrangement of transport becomes the norm, and their business depends on success for their customers.
via Flexport confirms access to SF Airlines’ services between Hangzhou and New York – The Loadstar
Asim Anand writes in Platts agriculture report that China is suffering from substantial losses in their pig population due to African swine fever (ASF). The pig herd has declined by 20%, and that translates to less need for soybeans. Estimates run to 22 million mt less.
I’ve been watching the world soybean flows since 2014 when my colleague Cris Clott and I, working with Althea and Libby Ogard, and with help from Scott Sigman, wrote an article about the soybean flows and the possibilities for containerization of soybeans as opposed to bulk transport.
US soybean exports to China have fallen by 85% due to the imposition of a tariff of 25% on US products by China. So world wide there is a glut of soybeans and prices are dropping fast. Prices of US soybeans are under $9 per bushel, the lowest since 2016. (See graph from USDA-NASS).
Graph from https://www.nass.usda.gov/Charts_and_Maps/Agricultural_Prices/pricesb.php retrieved 2019-05-14.
We can expect this trend to continue, and as the trade war with China escalates, US soybeans will cease to be exported to China at all. Exports represent about half of the US production each year, and China is the largest customer. We can hope for a change, but I’m guessing this market is virtually gone for the US, as the other soybean-producing countries, Brazil and Argentina especially, move in and establish supply chains around the world.
via Swine fever set to reduce China’s soybean imports further: USDA | S&P Global Platts
May 14, 2019 in Logistics, My Research, Shipping, Supply Chains
Tagged China, economics, Logistics, soybeans, supply chains, technologies, trade, transportation
Sam Whelan penned a report on the alliance of four companies managing terminals at the Kwai Tsing terminals in Hong Kong.
Apparently shippers are furious. They believe there will be collusion and rates will rise as a result. Rates are already higher in Hong Kong than the mainland, and the Hong Kong fees add more cost.
The firms say it’s only to make the port more efficient and gain higher throughput. Volume handled has been declining in 2018 compared to the prior year.
It’s true that greater cooperation would most likely improve port throughput. Coordinating yard movements and berth use would offer possibilities for gains. I’m not sure it would have to be at the level of fixing prices. Improving port and yard bottlenecks is an important activity for firms in port management today.
But you can bet shippers will be on their guard for any collusion on pricing, especially when there’s a falling need for services. And since it’s China that is involved– these are Chinese firms– we can’t rule out geopolitical considerations that would be collusive. WE need to watch this one and see how the volumes and prices play out, just like the shippers will.
via Shipper hackles rise as Hong Kong box terminals announce operating alliance – The Loadstar
January 10, 2019 in Logistics, Ports, Production Operations, Shipping, Strategy, Supply Chains
Tagged alliances, China, performance, port management, ports, Shipping, supply chains, transportation