Shipping Crisis: Preparing for a Rate Drop
A glut of new vessels, declining demand and a dissatisfied customer base are creating the conditions for an expected decline in shipping rates. Officials from the Global Shippers Forum (GSF) warn that shippers are gearing up to fight back against high prices and poor service. The new Container Shipping Performance Indicators (CSPI) tool is designed to help shippers in their negotiations with shipping companies.
Extending working hours at US ports
U.S. ports on the East and Gulf coasts are extending hours to avoid potential supply disruptions due to a looming port worker strike. Ports from New York to Virginia are bracing for a possible closure that could significantly affect already strained supply chains.
Efforts to green maritime transport
The global shipping regulator is pushing for zero emissions by mid-century. While some companies are experimenting with alternative fuels, the majority of the fleet still uses oil. The International Maritime Organization (IMO) is working on new rules to reduce emissions, including the first global greenhouse gas levy, which is expected to come into force in 2027.
Alternative fuels: The future of shipping?
The main candidates for replacing oil include methanol, ammonia and biofuels. Each of these fuels has advantages and disadvantages, but the key point is that they can significantly reduce emissions. Yet most of the world's fleet is still dependent on conventional fuels.
Regulatory and decarbonisation efforts
The IMO has set targets for emissions reductions but is still struggling to align with the Paris Agreement targets. Shipping is now part of the European Emissions Trading Scheme, which requires payments for carbon emissions. Progress is also being made on so-called green transport corridors, supported by both the public and private sectors.
Industry initiatives to reduce emissions
About half of the ships in the order are capable of using alternative fuels. Companies such as Maersk are investing in methanol vessels, while some customers such as Amazon and IKEA are pushing shipping companies to use near-zero emission fuels.
Outlook for the future
The IMO is continuing its efforts to reduce emissions, while EU and US regulatory measures are aimed at further reducing pollution from shipping. Yet the industry still has a long way to go to meet its sustainability targets.
Container Shipping Performance Indicators (CSPI)
It is a system designed to measure and monitor performance in container shipping. This tool is designed to provide key performance indicators to help companies and organizations improve the efficiency and effectiveness of their shipping operations.
Key features of the CSPI tool:
- Performance Measurement: the CSPI provides metrics to track various aspects of container transport such as transit time, delivery reliability and capacity utilization efficiency.
- Real-time data: the tool processes data in real time, allowing operators to react quickly to changes and optimise logistics processes.
- Analytical Capabilities: CSPI offers advanced analytical tools that enable deeper analysis of trends, identification of weaknesses and design of process improvements.
- Benchmarking: allows performance to be compared to industry standards and competitors, helping companies stay competitive in the marketplace.
- Decision support: with visibility into key metrics, managers can make better decisions on strategic and operational actions.
The use of the CSPI tool can make a significant contribution to increasing efficiency and reducing costs in container transport, which is crucial in the current global trading environment.
Other container news...
The need for new container ships is growing
The year 2024 brings new challenges for shipping with increasing demand for new ships and threats of strikes. Companies must be prepared for changes in logistics and supply chains to adapt to these dynamic conditions.
The shipping container market has peaked
In 2024, the dramatic price increase in the shipping container market is approaching its peak. Importers are trying to fend off spiralling spot rates, suggesting that the market is beginning to stabilise. According to Xeneta data, average spot rates from the Far East to the US East Coast increased 3.7% to $10,045 per 40ft container. On the US West Coast, rates rose 2.0% to US$8,045 for the same unit.
Increasing maritime activity in the Strait of Gibraltar
The Strait of Gibraltar remains a strategically important hub for maritime transport, despite the challenges it faces. A balanced approach to development and cooperation with international partners can strengthen its position in global trade.
The Port of Los Angeles is experiencing unprecedented growth
The Port of Los Angeles is on the cusp of major changes and investments that have the potential to increase its efficiency and adaptability in the rapidly changing world of international cargo transportation. These steps are key to maintaining its position as one of the most important ports in the world.