NEWS

>> Transpacific - port coverage from April 1st.more.

>> Are direct services becoming less attractive for shipping lines?. more.

>> What happens to the small ships post Panama Canal expansion?. more.

>> Maersk to acquire Hamburg-Sud and reinforce its presence on the Latin America routes. more.

>>£0.5 trillion of trade passes through UK ports. More.

>> The future of rail freight and private investment. More.

>> The Northern Freight and Logistics report. More. 

>> Oxford Cambridge Expressway Study. More.

>> The potential impact of Brexit on trade. More.

>> India - the impact of shipping lines’ consolidation and the cabotage rule change. More.

>> Iran – changes in maritime services post-sanctions. more.

>> 'India: The only way is up' say MDST in an article published by Lloyds List. More.

>> Hanjin’s collapse - A wake-up call to the industry? More.

>> Peak season 2016: could the seemingly more rational shipping lines restore stability to the market?. More.

>> Panama Canal Expansion: the major announcements so far have been made by the CKYHE Alliance and G6 Alliance: each have indicated the upsizing of some of their vessels on the services passing through the Panama Canal as shown in MDS Transmodal's analysis. More.

>> CMA-CGM’s acquisition of Neptune Orient Lines and Cosco’s merger with China Shipping Container Line (CSCL), prompted the need for a few changes in the current capacity-sharing agreements amongst the shipping lines. More.

>> MDST has been appointed by Transport for the North (TfN), in partnership with York Aviation and Regeneris Consulting, to carry out a review of international passenger connectivity in the North of England. More.

>> Chris Rowland, Managing Director of MDST, presented the draft conclusions from the Transport for the North (TfN) Freight & Logistics Strategy at the Freight in the City Conference in Manchester on 3 March 2016. More.

>> With 22 maritime services, Iran is expected to see an increase of around 250% in the capacity of container shipping passing through its ports in spring 2016, as shipping lines seek to benefit from the removal of sanctions. More.

>> MDST Chairman, Mike Garratt, wrote to the editor of RAIL magazine in March about the future of rail freight in Great Britain. More.

>> MDST has examined the evidence for Chinese ‘dumping’ of steel on the global and UK markets using its World Cargo Database, which allows it to monitor world trade by both volume and value and for detailed commodities. More.

>> East Asia export box trade sees growth of 1.7% in 2015, says MDST in an article published by Lloyds List. More.

>> The UK Department for Transport (DfT) has published road traffic forecasts which used MDST’s GB Freight Model (GBFM) to develop forecasts to 2040 for HGV traffic on the British road network. More.

>> Ports should be at the centre of distribution chains says MDST. More.

>> Based on its analysis of Eurostat port statistics and its own World Cargo Database, MDS Transmodal has concluded that ports handled 640 million tonnes in 2014, a market share of 40%. More.

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Panama Canal expansion

 After a series of delays, on 26th June, Panama will inaugurate the expanded Canal where larger locks will then allow the passage of vessels that can carry up to 14,000 TEU (vessel capacity before the improvement being a maximum 5,000TEU).  This will enable shipping lines and shippers to benefit from economies of scale as well as improvements in transit times (as demonstrated by MSC with their new SAWC-USA-NWC service which combines the Europe-North America service and the North America WC - South America service into one service).

However, with the expansion of the Panama Canal imminent, no major changes are expected to be seen in the immediate future. Focusing on the Asia-North America East Coast & Gulf trade lanes, and based on the announcements made so far, we estimate that the number of services on these routes will be reduced from 24 to 21 with total deployed capacity estimated to decrease by 0.9% (from 7,540,074 TEU to 7,474,450 TEU) in June 2016 compared to July 2016 and a reduction of 1.1% (from 7,559,925 TEU to 7,474,450 TEU) from July last year to this year.

The major announcements so far have been made by the CKYHE Alliance and G6 Alliance: each have indicated the upsizing of some of their vessels on the services passing through the Panama Canal as shown in the following tables.

Table 1: CKYHE Alliance (currently comprising Cosco, Hanjin, K-Line, Yang Ming and Evergreen)

Service

 

Regions Served

Routing

Average vessel size (TEU)

Deployed capacity (TEU)

CKYHE ALLIANCE - AUE/AWE8

Current

Far East - USEC

Suez

8,530

483,874

From July

Far East - USEC

Panama & Suez

8,462

480,007

CKYHE ALLIANCE - AWE 1

Current

Far East - USEC

Panama

5,060

263,120

From July

Far East - USEC

Panama

6,060

346,606

CKYHE ALLIANCE - AWE 2 (1)

Current

Far East - USEC

Panama

4,899

254,743

CKYHE ALLIANCE - AWE 3

Current

Far East - USEC

Panama

4,471

232,471

From July

Far East - USEC

Panama

7,332

419,380

CKYHE ALLIANCE - AWE 4 (2)

Current

Far East - USEC

Suez

8,261

429,563

From July

Far East - USEC

Panama

8,311

432,172

EVERGREEN - NUE (3)

Current

Far East - USEC

Panama

4,411

229,351

From July

Far East - USEC

Panama

6,904

430,830

Source: MDS Transmodal Containership Databank, July 2016

(1) It will cease to operate                                                                

(2) It will pass through the Panama Canal instead of Suez                                                                                                        

(3) Other members of the CKYHE Alliance will operate on this service                                                                                   

 Table 2: G6 Alliance (currently comprising APL, Hapag-Lloyd, Hyundai, MOL, NYK and OOCL)

Service

 

Regions Served

Routing

Average vessel size (TEU)

Deployed capacity (TEU)

G6 ALLIANCE - AZX

Current

Far East – Gulf &ISC – Med - USEC

Suez

6,624

373,152

From July

Far East – Gulf &ISC – Med - USEC

Suez

6,655

346,069

G6 ALLIANCE - CEC

Current

Far East – Gulf &ISC - USEC

Suez

8,720

494,681

From July

Far East – Gulf &ISC - USEC

Suez

8,663

491,419

G6 ALLIANCE - NCE (1)

Current

Far East - USEC

Panama

4,913

255,476

G6 ALLIANCE/ZIM - SCE (1)

Current

Far East - USEC

Panama

4,841

251,732

G6 ALLIANCE - NYX (1)

From July

Far East - USEC

Panama

10,011

468,520

G6 ALLIANCE - PA1

Current

Far East – USWC – USEC – N  Europe

Panama

4,911

272,421

From July

Far East – USWC – USEC – N  Europe

Panama

4,911

272,421

G6 ALLIANCE - PA2

Current

Far East – USWC – USEC

Panama

5,168

268,752

From July

Far East – USWC – USEC

Panama

6,095

316,930

G6 ALLIANCE/EVERGREEN - SVS/AUE3 (SUEZ)

Current

Far East – Gulf & ISC – USEC

Suez

6,989

429,492

From July

Far East – Gulf & ISC – USEC

Suez

7,315

311,215

Source: MDS Transmodal Containership Databank, July 2016

(1)     G6 ALLIANCE - NYX will replace G6 ALLIANCE - NCE and G6 ALLIANCE/ZIM - SCE                                                                                                                                                 

With all the major shipping lines, directly or indirectly, affected by the proposed two new Alliances (Ocean Alliance and THE Alliance), it appears inevitable that any expected changes in maritime service structures following opening of the new Panama Canal will suffer some further delay. This is because the Alliances’ intention to reshuffle early next year is subject to the approval of the Regulatory Authorities. Therefore, given the relatively short period of time between now and then, it would appear sensible for the shipping lines to delay for a few more months any possible post new Panama Canal changes to their services.

Another factor that could affect the speed with which the shipping lines readjust their current services and take advantage of the wider Panama Canal is the economic climate affecting the Central and South American countries.

These two factors will both play an important part in determining the future of the Panama Canal. However, without enough cargo to be moved, in particular on the Asia-US EC routes where the extended Panama Canal is expected to bring the main volumes, Panama would need to look at other roles it might play, maybe becoming the ‘Jebel Ali’ within the Central and South America network.

Our trade data estimates suggest that the overall volume of TEU moved to/from Latin America in 2015 has declined by some 0.6% compared to the previous year and we expect to see a further contraction in 2016. Traffic from the Far East, the major exporting region for Latin America imports, is estimated to have declined by more than 3% between 2014 and 2015 and it could see a double-digit annual decline in 2016. More promising results, however, emerge on the North America/South America routes where we estimate a compound annual growth rate of 3% between 2010 and 2015 with a forecast annual growth rate of some 4% between 2015 and 2020.

The following tables summarise the major flows on the Far East to Latin America and North America – Latin America routes.

Table 3:  Far East to Latin America, top 20 country flows in 2014 and 2015; TEU

Top 20 country flows

2014

2015

% change 2014-2015

China_Brazil

837,037

645,191

-22.9%

China_Chile

347,091

365,451

5.3%

China_Colombia

240,255

229,612

-4.4%

China_Peru

198,458

218,077

9.9%

China_Argentina

166,581

216,191

29.8%

China_Panama

181,210

188,179

3.8%

China_Venezuela

114,253

99,345

-13.0%

China_Ecuador

100,387

94,481

-5.9%

South Korea_Brazil

104,465

76,340

-26.9%

China_Guatemala

60,742

69,410

14.3%

China_Dominican Republic

53,464

64,196

20.1%

China_Uruguay

57,672

53,273

-7.6%

China_Cuba

33,995

55,866

64.3%

China_Costa Rica

42,139

50,636

20.2%

China_Paraguay

53,046

45,847

-13.6%

Japan_Brazil

50,816

42,853

-15.7%

Taiwan_Brazil

46,496

36,890

-20.7%

Vietnam_Brazil

34,801

33,333

-4.2%

Indonesia_Brazil

36,898

34,017

-7.8%

Thailand_Brazil

34,652

28,028

-19.1%

All others

844,658

868,427

2.8%

Grand Total

3,639,116

3,515,641

-3.4%

Source: MDS Transmodal, World Cargo Database May 2016

 

Table 4:  North America to/from Latin America, top 20 country flows in 2014 and 2015; TEU

Top 20 country flows

2010

2014

2015

2020

CAGR 2010

-15

CAGR 2015

-20

% change 2014

-15

Brazil_USA

323,362

337,198

341,623

391,518

1%

3%

1.3%

USA_Brazil

183,250

216,968

175,132

222,458

-1%

5%

-19.3%

USA_Chile

140,398

162,632

157,713

198,182

2%

5%

-3.0%

USA_Colombia

128,579

160,546

154,602

184,510

4%

4%

-3.7%

USA_

Dominican Republic

118,744

123,564

131,641

153,887

2%

3%

6.5%

Guatemala_USA

95,171

110,602

112,517

137,148

3%

4%

1.7%

Costa Rica_USA

126,099

114,156

110,834

134,836

-3%

4%

-2.9%

Chile_USA

87,779

112,917

114,635

133,906

5%

3%

1.5%

USA_Honduras

106,406

102,083

106,938

128,655

0%

4%

4.8%

USA_Guatemala

83,826

101,682

109,801

127,512

6%

3%

8.0%

Colombia_USA

94,959

100,532

102,506

113,988

2%

2%

2.0%

USA_Costa Rica

78,401

90,316

94,237

108,992

4%

3%

4.3%

USA_Panama

54,312

76,447

86,478

103,290

10%

4%

13.1%

USA_Peru

73,798

87,882

79,951

102,244

2%

5%

-9.0%

Honduras_USA

68,450

79,655

85,351

100,237

5%

3%

7.2%

Argentina_USA

65,616

70,576

95,226

96,192

8%

0%

34.9%

Peru_USA

47,202

65,308

63,451

79,378

6%

5%

-2.8%

Brazil_Mexico

55,519

66,512

65,815

77,195

3%

3%

-1.0%

Mexico_Colombia

54,062

58,358

62,920

76,639

3%

4%

7.8%

USA_Venezuela

86,174

78,959

55,971

74,988

-8%

6%

-29.1%

All others

1,328,297

1,520,050

1,536,583

1,869,429

3%

4%

1.1%

Grand Total

3,400,404

3,836,944

3,843,924

4,615,185

2%

4%

0.2%

Source: MDS Transmodal, World Cargo Database May 2016