Tag Archives: trade

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Transpacific trade volumes set for further decline

Transpacific trade won’t recover for at least a couple of years, says an article in the Loadstar.

Most of the tariffs remain in place. And much trade has shifted from China to other Southeast Asia countries, like Vietnam, rather than returning to China.  US container imports from China are off by more than 8% compared with last year.  Vietnam was up 33%, to 1.4m teu; Thailand was up 18%, to 570k teu,  and Malaysia was up 27%, to 335k teu.  But total trade from the region is down.

And US consumers have already overpaid by $38 billion for goods from February of 2018 to September of 2019.  That is the typical story in trade wars; the consumer pays for the war through increased prices for purchases.  It’s a premise of trade economics; when trade is restricted, the consumer must buy at higher prices because they can’t get them from the lower-cost location.

And it’s not clear at all that the trade deal between the US and China will change that trend away from China, and down in general.  Of course, we don’t know what is really in the deal yet, or which things will actually happen.  And we know there’s been little advance on the intellectual property front, and the US has ceded the opportunity to gain support for dumping claims through the WTO.

Not a pretty picture for the Transpac trade.

logo via Transpac volumes set for further decline, despite US-China trade pact – The Loadstar

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Are carriers boosting low-sulphur fuel surcharges to make up for low rates?

This story is a follow up to one I did a couple of weeks ago.  Fuel surcharges are varying wildly. A consultant found that there’s a wide disparity, the rate rationale is not very transparent, and rates vary even within alliances.   Conditions like this lead to confusion and annoyance among customers, especially smaller shippers.  I expect 3PLs will also be annoyed, but they will be figuring out how to explain the surcharges or where to hide them in their reselling agreements.  It doesn’t make for great credibility among the ocean carriers.

 

logovia Are carriers boosting low-sulphur fuel surcharges to make up for low rates? – The Loadstar

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ITF Study on shipping alliances makes EC exemption decision ‘puzzling’

Why did the EU decide to extend shipping alliances’ rights?  This article in the Loadstar points to a short piece on Linked in calling attention to a study by Olaf Merk (and others) critiquing alliances and what they have done to the ocean shipping and port industries.

The study points out alliances were useful in the distant past, but today they are serving to consolidate ocean shipping, reduce offers and most every service, and they also put great pressure on ports to engage in competition on facilities, a costly endeavor that results in over-allocation of capital for the use of few lines.

I’ve attached the Merk etal. article below. He’s an eminent port and maritime economist, and what he writes should be taken seriously.

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By Alex Lennane 22/11/2019

 

via Study on shipping alliances makes EC exemption decision ‘puzzling’ – The Loadstar

The Impact of Alliances on Container Shipping