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PANAMA CANAL FINALLY OPENS & OCEAN FREIGHT RATES MAY
PLUMMET?
JOIN THE CONVERSATION ON TWITTER
@XENETA_AS
ABOUTXENETA
At Xeneta we believe there is an untapped potential for everyone in the industry, to systematically learn from our individual and collective efforts. We hold true that "if you cannot measure it, you cannot improve it". That’s why we think actionable metrics is the key to continuously evolve for every business, and ultimately the entire industry. Rethinking global logistics is the vision of Xeneta.
With international experience from the logistics industry, we have first-hand knowledge of the challenges related to high volatility and lack of transparency in the ocean freight market. By combining logistics background and information technology expertise, we found the solution to these challenges.
WE ARE TRANSFORMING GLOBAL LOGISTICS
ARE YOU PAYING THE RIGHT CONTAINER
FREIGHT RATES?
DISCOVER SAVINGS POTENTIAL IN REAL
TIME.
CONTACT US.
JUNE 26, 2016
THE 9,472 TEU COSCO SHIPPING PANAMA WAS THE FIRST PANAMAX-PLUS CONTAINER VESSEL TO TRANSIT THE PANAMA CANAL.
OPENING SOME THREE YEARS LATE, AT A COST IN EXCESS OF U.S. $ 5.25 BILLION, THE NEW LOCKS GIVE CONTAINER SHIPS (NEO-PANAMAX) CARRYING APPROXIMATELY 13,000 TEU'S ALL-WATER ACCESS FROM ASIA TO THE IMPORTANT US EAST COAST PORTS AND INLAND MARKETS.
JUNE 30, 2016
ONLY FOUR DAYS LATER, THE MOL BENEFACTOR 10,100 TEU'S WILL BE THE FIRST 10,000+ TEU VESSEL TO TRANSIT THE CANAL; ON THE G-6 ALLIANCE'S NEW ASIA- NEW YORK-SAVANNAH ROUTE.
THESE TWO VESSELS ARE THE ADVANCE PARTY OF A STRING OF POST-AND-NEO PANAMAX VESSELS STEAMING TOWARDS THE US EAST COAST; THERE ARE REPORTS OF SIX 6,000-10,000 TEU VESSELS FOLLOWING JUST DAYS BEHIND THE BENEFACTOR.
THESE TWO VESSELS ARE THE ADVANCE PARTY OF A STRING OF POST-AND-NEO PANAMAX VESSELS STEAMING TOWARDS THE US EAST COAST; THERE ARE REPORTS OF SIX 6,000-10,000 TEU VESSELS FOLLOWING JUST DAYS BEHIND THE BENEFACTOR.
DIVERSION OF CARGO TO THE GULF & EAST
COAST?
ARE YOU PAYING THE RIGHT CONTAINER
FREIGHT RATES?
DISCOVER SAVINGS POTENTIAL IN REAL
TIME.
THE 9,472 TEU COSCO SHIPPING PANAMA WAS THE FIRST PANAMAX-PLUS CONTAINER VESSEL TO TRANSIT THE PANAMA CANAL.
WHILE THIS IS A BOOM FOR PANAMA, SHIPPERS, US / CARIBBEAN CONSUMERS, AND BUSINESSES, WE SEE THIS AS A POSSIBLY IMPEDING FINANCIAL DISASTER FOR THE CARRIERS.
LET'S LOOK AT THE EXISTING CONTAINER ARRIVAL DATA FROM ASIA INTO THE US EAST COAST – MIDWEST:
ASIA – US WEST COAST
ASIA – US EAST COAST (PANAMAX-SIZED VESSELS)
ASIA – US EAST COAST VIA SUEZ CANAL:
68%
18%
14%
INTERNATIONAL TRADE EXPERTS SUCH AS CH ROBINSON AND ROSEMONT COLLEGE'S PROFESSOR ANDREW LUBIN EXPECT THAT WITHIN THE YEAR, SOME 10-14% OF CONTAINER TRAFFIC FROM ASIA INTO THE UNITED STATES WILL BE DIVERTED FROM US WEST COAST PORTS TO THE GULF AND EAST COAST PORTS.
THE NEO-PANAMAXS WILL KEEP THE RATES LOW IN ORDER TO ATTRACT CARGO,” LUBIN TOLD XENETA,”AND THE DIRECT SHIPMENTS TO THE EAST COAST GIVE THE SHIPPERS AN
ECONOMICALLY VIABLE OPTION TO THE WEST COAST LABOR UNIONS.
- ROSEMONT COLLEGE'S PROFESSOR ANDREW LUBIN
POSSIBLE DROP IN RATES TO ATTRACT
CARGO
ONE THEORY IS THAT THIS COULD PUT PRESSURE ON RATES AS MORE SHIPS CAN NOW COMPETE INTO THE US EAST COAST, AND AS THE NEWLY ARRIVING FLEETS OF 18-20,000 TEU MEGAS CAUSE MORE CASCADING, ONE OF THE LOGICAL CONSEQUENCES COULD PERHAPS BE THAT CARRIERS WOULD DROP THEIR RATES IN ORDER TO ATTRACT CARGO.
EARLIER THIS WEEK MSC ANNOUNCED THEY'RE RE-DEPLOYING THEIR 13,000 TEU VESSELS TO THEIR SECONDARY LANES; SOUTH AMERICA WEST COAST, WEST AFRICA, AND INDIA IN ORDER TO MAKE ROOM FOR THEIR 4 NEWLY-ARRIVING 18-20,000 TEU MEGAS THAT WILL COMPLEMENT THE MAERSK MEGAS THEY SHARE AS PART OF THE 2M ALLIANCE.
TWO YEARS AGO, ONE OF THE ADVANTAGES OF THE MEGAS WAS THEIR FUEL EFFICIENCY, BUT TODAY'S LOW BUNKER PRICES HURT THE CARRIERS MORE THAN HELP THEM AS THE 6,000-8,000 TEU SHIPS ARE KEPT IN SERVICE SINCE THEY CAN STILL OPERATE ECONOMICALLY AGAINST THE MEGAS.
HOW DO YOUR FREIGHT RATES
COMPARE TO THE MARKET'S? MAKE
SURE TO BENCHMARK.
INTERNATIONAL TRADE EXPERTS SUCH AS CH ROBINSON AND ROSEMONT COLLEGE'S PROFESSOR ANDREW LUBIN EXPECT THAT WITHIN THE YEAR, SOME 10-14% OF CONTAINER TRAFFIC FROM ASIA INTO THE UNITED STATES WILL BE DIVERTED FROM US WEST COAST PORTS TO THE GULF AND EAST COAST PORTS.
THE NEO-PANAMAXS WILL KEEP THE RATES LOW IN ORDER TO ATTRACT CARGO,” LUBIN TOLD XENETA,”AND THE DIRECT SHIPMENTS TO THE EAST COAST GIVE THE SHIPPERS AN
ECONOMICALLY VIABLE OPTION TO THE WEST COAST LABOR UNIONS.
- ROSEMONT COLLEGE'S PROFESSOR ANDREW LUBIN
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BUSINESS:
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