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Revenue downturn
San Pedro Ports Face Import Wave Rivaling Pandemic Frenzy
Bloomberg August 19, 2024
The busiest port complex in the US is churning through import volumes near the highs set during the pandemic despite worries about a cooling economy.
The ports of Los Angeles and Long Beach, which account for roughly a third of all US container imports, had their third-strongest month ever in July, just shy of an all-time high reached in May 2021. Back then, a wave of inbound consumer goods caused supply bottlenecks on land and a queue of cargo ships waiting for a berth offshore was getting longer by the day.
Demand now is driven by retailers and other importers that are stocking up ahead of US tariffs on Chinese goods and a possible strike by a large group of American dockworkers — adding to the usual frenzy of pre-holiday ordering that occurs this time of year.
The marine terminals in Southern California’s San Pedro Bay are withstanding the crush so far, though some gauges of capacity constraints are starting to rise.
“We’re in a strong position heading into the peak shipping season as consumers purchase back-to-school supplies and shippers move goods ahead of potential tariff increases,” Port of Long Beach CEO Mario Cordero said in a statement. “We have plenty of capacity across our terminals and cargo continues to move efficiently and sustainably.”
In the latest rush to restock, fear of delayed shipments is a big factor.
Talks between the union representing longshoremen on the East and Gulf coasts and their employers have reached an impasse, six weeks before their contract expires Sept. 30. So some ocean freight that might come through ports from Boston to Houston is shifting to West Coast gateways until that uncertainty is resolved.
According to data from Sea-Intelligence, a Copenhagen-based maritime data and advisory firm, every one day of a strike would take about five days for ports to clear the resulting cargo backlog. A one-week strike starting Oct. 1, for instance, would take until mid-November to work through.
“If we get a two-week strike, then realistically, the ports would not be back to normal operations until we are into 2025,” Sea-Intelligence CEO Alan Murphy said in a research note released last week.
Companies are also racing to beat the imposition of more tariffs on Chinese goods and, in the event Donald Trump returns to the presidency next year, he fulfills a campaign pledge to step up the trade war with China and raise tariffs on all US imports.
According to data released this month by the National Retail Federation and Hackett Associates, US container imports through major ports this year will reach 24.9 million measured in 20-foot equivalent units, up 12% from last year and close to 2021 and 2022 levels that topped 25 million.
LA-Long Beach and other West Coast ports have been losing market share to their eastern rivals for years. Hackett Associates Founder Ben Hackett said fresh worries about labor disruptions at eastern ports has pushed the West Coast’s share of cargo “above 50% for the first time in over three years.”
Such factors are distorting the demand picture, making it hard to know whether peak shipping season started early and trade volumes will level off soon, or if importers will continue bringing in more than usual.
There’s also the chance that consumers’ ability to continue spending bottoms out, leaving warehouses full and companies with too much inventory.
The latest retail sales report reflects consumer resilience despite higher borrowing costs, a cooling labor market, and an economic outlook clouded by wars and the US presidential election in November.
But with pandemic savings now largely gone and wage growth cooling, many Americans are increasingly resorting to credit cards and other loans to support their purchases.
Cautious Consumers
Walmart Inc.’s latest earnings report underscores how US households are becoming more cost-conscious in light of economic uncertainty and high interest rates. Americans are also pulling back on travel, while deferring big home renovations.
“We are seeing that the consumer continues to be discerning, choiceful, value-seeking” and focusing on essentials, Chief Financial Officer John David Rainey said in an interview Thursday.
Home Depot Inc. and Whirlpool Corp. cut their sales forecasts for the year as their shoppers held back spending on big-ticket items and home improvement projects.
So far, though, a consumption slowdown isn’t visible in the industry that moves 80% of global merchandise trade. Asked whether he sees a recession on the horizon, the chief executive of the world’s No. 5 container carrier said not according to his bookings.
“All of us were surprised by the strong demand that we’ve seen since the first of May,” Rolf Habben Jansen, CEO of the German container carrier Hapag-Lloyd AG, said in an interview with Bloomberg Television last week. “That’s actually still continuing well into the third quarter.”
At the Port of LA, preliminary August figures show sustained momentum. Executive Director Gene Seroka said nearly all indicators of port efficiency are at or better than they were when the surge started, though “recently we’re seeing some micro issues.”
Dwell time for containers — a measure of how smoothly they’re moving through the port — has moved up, reaching more than six days. “That’s far too high, it needs to be between two and four days,” Seroka said.
Strains are also starting to appear in truck chassis availability — an issue blamed for the severe delays at LA-Long Beach during the Covid bottlenecks of 2021 and 2022.
Still, he doesn’t see anything that’s a cause for alarm. “We’ve been clipping out the last three months at really high productivity” Seroka said.
He said some industry observers believe that US imports may have peaked in July, a hypothesis that matches up with a recent decline in spot shipping rates.
“We’ll see if that holds true,” Seroka said. “So much of it depends on the economy.”
https://gcaptain.com/san-pedro-ports-face-import-wave-rivaling-pandemic-frenzy/
I keep an eye on several of the maritime sites. The big lines are trying to shift to West Coast. Matter of time before the backlogs return.
==Maersk Warns of Potential Supply Chain Disruptions as U.S. Labor Strike Looms
Mike Schuler August 12, 2024
A.P. Moller — Maersk has provided an update on the North American market, highlighting the ongoing labor negotiations between the United States Maritime Alliance (USMX) and the International Longshoremen’s Association (ILA). The current contract between the two parties is set to expire on September 30, raising concerns among industry stakeholders and shippers about potential disruptions at U.S. Gulf and East Coast ports.
The ILA has already filed required notifications with government agencies and negotiating parties regarding the possibility of a strike if no agreement is reached. However, due to a ‘no strike’ clause in effect until the contract’s expiration, no job actions are expected before October 1. The filing of notifications does not necessarily indicate that a strike will occur.
Maersk expressed confidence in the parties’ commitment to reach an agreement that ensures robust and efficient supply chains. Despite a history of successful negotiations, the possibility of a strike remains without a settled contract.
“Disruptions may be localized or more broad-based. Should a general work stoppage occur on the U.S. Gulf and East Coasts, even a one-week shutdown could take 4-6 weeks to recover from, with significant backlogs and delays compounding with each passing day,” Maersk update said.
In the event of disruptions, Maersk is prepared to assist customers in exploring alternative routes, modalities, or distribution schedules to maintain their supply chains. Customers are encouraged to stay in close contact with their Maersk representatives to communicate supply chain requirements and develop tailored contingencies if needed.
https://gcaptain.com/maersk-warns-of-potential-supply-chain-disruptions-as-u-s-labor-strike-looms/
Qclocks are awesome
Too bad you can't understand them
So out of ammo it's back to bustin on the Clockfags?
Mpox scare onboard bulk carrier in Argentina turns out to be chicken pox
Sam Chambers August 22, 2024
An Indian crewmember on a bulk carrier in Argentina struck down with symptoms similar to mpox has been told he is in fact suffering from chicken pox.
The entire ship’s crew were quarantined earlier this week over fears that the skin lesions found on one seafarer were a strain of mpox.
The World Health Organization (WHO) last week declared mpox a global public health emergency for the second time in two years as a new variant of the virus spread rapidly in Africa. A day later, a case of the clade 1b variant was confirmed in Sweden, the first sign of its spread outside Africa.
Mpox, a viral infection that causes pus-filled lesions and flu-like symptoms, is usually mild but can kill. The clade 1b variety of mpox has triggered global concern because it seems to spread more easily through routine close contact.
https://splash247.com/mpox-scare-onboard-bulk-carrier-in-argentina-turns-out-to-be-chicken-pox/
…because it seems to spread more easily through routine close contact. Yep, gay sex, then when kids turned up with it then monkeypox went away
Only 5% of Chinese steel producers are currently profitable
Sam Chambers August 22, 2024
The Chinese steel industry is going through a “winter”, according to the head of the world’s largest steel producer, with analysts warning the sector – vital for capesize owners – faces prolonged decline.
Steel production in July dropped by 9% year-on-year reaching 82.9m tonnes according to the National Bureau of Statistics, the lowest figure reported in 2024. Generally Chinese steel production has slowed in 2024 and is year-to-date 2.2% behind 2023 numbers.
The decline is driven, according to a new report from Greece’s Ursa Shipbrokers, by weak demand, reduced profitability for mills, and government directives to keep annual production growth at zero.
Ursa analysts note that only 5% of Chinese steel producers are currently profitable, as steel prices have dropped significantly, with rebar futures hitting a four-year low.
The prolonged slump in China’s property sector, with a 10.2% drop in investment, has heavily impacted steel demand.
Hu Wangming, chairman of the world’s largest steel producer, state-owned Baowu Steel, recently said the steel industry was going through a “winter,” adding that the industry was in the midst of a long-term adjustment period.
Following weaker domestic demand, Chinese steel producers are searching for new markets. In the first half of 2024 China increased exports by 24% year-on-year, and industry experts believe exports will grow 27% in 2024.
China’s steel exports have “flooded” global markets, according to a recent report from MB Shipbrokers, which has led to a 26% year-on-year drop in global steel prices. Consequently, many countries are now imposing restrictions to protect their domestic producers, raising doubts about whether China’s high export levels can be sustained.
“With weak domestic steel demand, high iron ore inventories, and concerns about the future of steel exports, iron ore imports could face a correction in the near future,” MB Shipbrokers warned, something that could have a negative impact on capesize freight for the rest of the year.
Excavator sales in China are expected to be down 8% year on year for fiscal year 2024, Citi wrote in an August note. Excavator sales are usually seen as a leading indicator of construction activity, and by extension, metals demand.
Despite the headwinds facing the property and steel sectors in China, capes have been trading in a narrow, profitable range of between $19,000 and just over $23,000 over the past month.
This comes despite a weakening steel market globally, with Chinese hot-rolled prices falling from $500 a ton to $450 a ton since mid-July.
“The softer steel prices have impacted iron ore prices as well though seaborne cargo movements remain elevated. This is due in part to much lower China domestic iron ore production recently,” analysts at investment bank Jefferies noted.
https://splash247.com/only-5-of-chinese-steel-producers-are-currently-profitable/
Would you be so kind as to repost that to the UK bread?
So you have neither patience nor discernment?
If you truly are new, you'll watch the shill antics
The shipyard order books are filled for several types of ships, fiberglass hulls?
Product Tanker Ordering Reaches 18-Year High, Sparking Oversupply Concerns
Mike Schuler August 21, 2024
Product tanker contracting so far in 2024 has reached an 18-year high, marking a 17% increase compared to the previous year, according to BIMCO.
The world’s largest association of shipowners reports that the first seven months of 2024 have seen contracting levels reach the second-highest on record, with 194 product tankers larger than 10,000 deadweight tonnes (DWT) being contracted, totaling a combined capacity of 13.3 million DWT.
The boom follows an already strong performance in 2023, which saw the third-highest contracting level. The order book has expanded rapidly, growing by 135% in 2023 and a further 45% so far in 2024, reaching a total of 37.1 million DWT
BIMCO notes that Chinese shipyards have emerged as the primary beneficiaries of renewed product tanker newbuilding, securing 72% of the current order book. The order book to fleet ratio has also seen a significant rise, jumping from 5.9% at the beginning of 2023 to the current 19.6%.
However, industry experts warn of potential oversupply in the coming years. Niels Rasmussen, Chief Shipping Analyst at BIMCO, notes that while demand for petrochemicals may continue to increase, the product tanker sector faces challenges from decarbonization efforts, particularly the electrification of cars. With 90% of the current order book scheduled for delivery between 2025-2027, there’s a significant potential for fleet growth that may outpace demand.
Despite an aging fleet, however, current strong market conditions don’t indicate an imminent increase in ship recycling. Even with aggressive recycling estimates, the fleet is projected to expand by 23.3 million DWT (12.5%) by the end of 2027.
As the industry undergoes this rapid growth, stakeholders are being advised to closely monitor market conditions and adjust their strategies to maintain a balance between supply and demand in the product tanker sector.
https://gcaptain.com/product-tanker-ordering-reaches-18-year-high-sparking-oversupply-concerns/
The shipyard order books are filled for several types of ships
Product Tanker Ordering Reaches 18-Year High, Sparking Oversupply Concerns
Mike Schuler August 21, 2024
Product tanker contracting so far in 2024 has reached an 18-year high, marking a 17% increase compared to the previous year, according to BIMCO.
The world’s largest association of shipowners reports that the first seven months of 2024 have seen contracting levels reach the second-highest on record, with 194 product tankers larger than 10,000 deadweight tonnes (DWT) being contracted, totaling a combined capacity of 13.3 million DWT.
The boom follows an already strong performance in 2023, which saw the third-highest contracting level. The order book has expanded rapidly, growing by 135% in 2023 and a further 45% so far in 2024, reaching a total of 37.1 million DWT
BIMCO notes that Chinese shipyards have emerged as the primary beneficiaries of renewed product tanker newbuilding, securing 72% of the current order book. The order book to fleet ratio has also seen a significant rise, jumping from 5.9% at the beginning of 2023 to the current 19.6%.
However, industry experts warn of potential oversupply in the coming years. Niels Rasmussen, Chief Shipping Analyst at BIMCO, notes that while demand for petrochemicals may continue to increase, the product tanker sector faces challenges from decarbonization efforts, particularly the electrification of cars. With 90% of the current order book scheduled for delivery between 2025-2027, there’s a significant potential for fleet growth that may outpace demand.
Despite an aging fleet, however, current strong market conditions don’t indicate an imminent increase in ship recycling. Even with aggressive recycling estimates, the fleet is projected to expand by 23.3 million DWT (12.5%) by the end of 2027.
As the industry undergoes this rapid growth, stakeholders are being advised to closely monitor market conditions and adjust their strategies to maintain a balance between supply and demand in the product tanker sector.
https://gcaptain.com/product-tanker-ordering-reaches-18-year-high-sparking-oversupply-concerns/
Oh gee, more RRN bullshit
Nice thing about gcaptain is there is more than one person contributing articles. Splash247 and maritime-executive.com have been good to me
Greta or Hogg?
Sing it with me!
His sex-change operation got botched
His guardian angel fell asleep on the watch
Now all he got is a Barbie Doll-crotch
He's got an angry inch
Six inches forward and five inches back
He's got a
He's got an angry inch
Six inches forward and five inches back
He got a
He got an angry inch