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LSCMS Blog

Blog for updates and happenings in logistics in the Asia-Pacific region

November 23, 2011

MAERSK says to competition – “We Will Outlast You”

Filed under: Newsletter — admin @ 12:16 am

MAERSK is frequently accused as the aggressor in a destructive war of attrition that will stands to leave the Danish shipping giant one of the few survivors and with the lion’s share of the market, reports Alphaliner in Paris.

Maersk Group CEO Nils Andersen hardly denies it: “It would be natural if the smaller players in this business, or their banks, start questioning whether it’s a good idea to keep competing. We are well positioned for a stretch of tough competition,” he told Bloomberg.

But Alphaliner commented: “The attempt to force out competitors through a destructive price war has so far failed to achieve any results. So far, there have only been limited capacity withdrawals, even as freight rates are expected to remain depressed until the end of the slack winter season.”

But freight rates on the Far East-North Europe trade as reported by the Shanghai Containerised Freight Index (SCFI) have plummeted to US$540 per TEU earlier this month, while the average BAF stands at $755 per TEU.

This means carriers are charging a negative base ocean freight rate of $215 per TEU (excluding surcharges), according to Alphaliner, which also noted that forward rates indicate a mild recovery in late January because of Chinese New Year. “Freight rates should remain below BAF levels. The low ocean freight level is unprecedented, with negative base rates offered in the market since September,” said Alphaliner.

It said three strings have been withdrawn so far this year, with a fourth service to follow in December, representing 8.6 per cent of the total available capacity. Overall load factors have remained below 90 per cent on average throughout the year.

Over the coming 14 months, 63 newbuildings of more than 10,000 TEU are scheduled for delivery, and most are likely to be deployed on the Asia-Med-Europe trades, putting further pressure on rates.

There is also talk of the three big Japanese carriers merging into a single company, but together their volume would not be half as much as Maersk’s. Nonetheless such a merger would put a “Japan Lines” in fourth place behind Maersk, MSC and CMA CGM – pushing Cosco into fifth spot.

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November 9, 2011

Armed Patrols on Mekong River

Filed under: China,Logistics,Newsletter — admin @ 3:38 pm

China along with its Southeast Asian neighbours will be sending armed patrols along Mekong River following the incident where 13 Chinese sailors were murdered.

Armed patrols from China will be coming from a special armed force established under the Yunnan Provincial Border Control Corps comprising nearly 1,000 police officers along with five patrol vessels adapted from merchant ships.

The area had been void of all shipping activities after the sailors were murdered on 5 October, with commercial traffic expected to resume by the end of this month, according to secretary-general of the Lancang River Shipowners’ Association, Fang Youguo.

The patrol force will be tasked with escorting all ships, according to a Mr. Yang Xi, press officer from Yunnan Provincial Border Control Corps.

He added that China and the other three partners are still in talks regarding the details of their plans and will be divulging more information in the near future, China Daily reported.

The other partners in this armed force are Laos, Myanmar and Thailand, where the four countries agreed to exchange intelligence to completely eradicate criminal gangs along the river.

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K & N Fined US$9.9 million

Filed under: Logistics,Newsletter — admin @ 12:44 am

Swiss logistics giant Kuehne + Nagel, rated the world’s largest forwarder, has been fined US$9.9 million after a Washington District Court ruling for violating anti-trust law by fixing surcharges with other forwarders.

The company said the court approved plea bargain between Kuehne + Nagel International AG and the US Justice Department was made on September 30, 2010, concluding an investigation that started in 2007.

“In approving the plea agreement, the Department of Justice and the court recognised that Kuehne + Nagel provided substantial assistance through its early and extensive cooperation with the investigation,” said a Kuehne + Nagel statement announcing the conviction.

“Kuehne + Nagel has agreed to pay a fine of US$9.9 million under the plea agreement to resolve allegations that international freight forwarders coordinated their activities with respect to establishing certain surcharges,” said the statement.

Company chairman Karl Gernandt said he “is committed to abiding by all anti-trust laws and regulations. I reconfirm that we continuously develop and reinforce our compliance programme to always ensure compliance with the highest available standards”.

Kuehne + Nagel, which employs some 61,500 people in more than 100 countries, said at the time that competition authorities in several countries were carrying out an investigation into the forwarding sector.

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November 3, 2011

Social Logistics Costs

Filed under: China,Logistics,Newsletter — admin @ 1:22 am

In an index that seems to be used primarily in China, it was reported recently that social logistics costs in China rose 18.7pc in the first three quarters of the year.

The latest figures from the China Federation of Logistics and Purchasing (CFLP) showed that China’s Social Logistics Costs , which are the cost of all logistics activities in the country, increased 18.7 per cent to CNY5.8 trillion (US$912 billion).  This is up 0.2 percent faster than the growth in the first half of year and 3.8 percent higher year on year.

The ratio of the cost to the country’s GDP was 18 per cent, up 0.1 percent year on year, meaning that logistics costs are still high in China, said the report.

Transport costs increased 15.4 per cent to CNY3 trillion because of surging fuel prices and labour costs. Fuel costs soared four fold since January.

Storage costs increased 23.8 per cent to CNY2.1 trillion, one per cent higher than the increase in the first half, and 10.5 per cent more year on year.

Management costs climbed 19 per cent to CNY710.7 billion, up 19 per cent year on year. The growth is 0.8 per cent slower than that in the early half of year, but 1.9 per cent higher year on year.

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November 2, 2011

On time Tiger roars ahead of Qantas

Filed under: Logistics,Newsletter — admin @ 5:57 am

Tiger Airways has replaced Qantas at the top of the monthly on time statistics standings and was named as September’s most punctual domestic airline.

The monthly figures released by from the Department of Infrastructure and Transport revealed that Tiger, which has regularly been named as Australia’s least punctual airline, had no cancellations last month and achieved 91.1 per cent of on time departures and 89.4 per cent of on time arrivals.

Qantas, which has regularly been named the best on time performer, has suffered from a series of strikes and industrial action during the past few months.

Virgin Australia was second of services taking off on schedule, followed by Jetstar who finished ahead of Qantas.

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