We continue to see a lot of blanked voyages. Demand must not be shaping up to be very good after all, and prices just won’t stay up. What else would you expect if you make your customers guess about the inventory they have to carry. Once they have bitten that bullet, it will be hard to get them back into a non-competitive shipping mood.
By Mike Wackett 03/06/2020
Alliances schedule 75 blankings for Q3, as hopes of peak season demand fade – The Loadstar
Posted in Logistics, Managerial Econ, Microeconomics, Shipping, Strategy, Supply Chains
Tagged blankings, containers, intermodal, service, transportation
Ever since we wrote a paper about exporting soybeans, I’ve been following the contretemps between Brazil and the US regarding soybean exports. China is the largest importer of soybeans from these two countries. Since one is Northern and one is Southern Hemisphere, their harvest seasons differ. So in the past the prices switched back and forth as the harvest supplies soared in one country or another, and China bought around the same from each source. The US has areas where yields are large, is a bit closer, and the inland transport for the soybeans is good. Brazil has lots of land planted, overland transport to ports is challenged a bit, and the distance to China is greater.
But now we have ‘exogenous factors’ as the economists like to say. China is in a trade war with the US. So as the second article indicates, China’s government-owned processors are buying some American beans, whereas the private Chinese enterprises are buying more Brazilian beans. The result is that more beans are going to China from Brazil right now. The trade war’s uncertain vicissitudes may mean that Brazil’s sales will become significantly bigger, and China will only buy what it thinks it has to from the US. Geopolitically, it makes sense for China to support Brazil, a developing country with lots of financing needs and less influence in the world. Support might mean good opportunities for Chinese investment and influence on Brazil’s policies internationally.
The outlook is really unclear. We need to keep watching developments in soybean trade.
Author Asim Anand
Posted in Logistics, Production Operations, Shipping, Supply Chains
Tagged agriculture, Logistics, Shipping, soybeans
A former VP of Hanjin (currently with K&N) complains quite rightly about two time-wasters in the ocean shipping business– RFQs and bunker surcharges. They overcomplicate the process and add layers of obscurity to straightforward shipping deals. And they confuse customers.
I’ll bet the ocean carriers and shippers and brokers would be better off getting away from these practices.
He also mentions one of my favorite topics– container chassis. His view is that the problem is not going to go away anytime soon. I agree. People will continue to look for ways to eliminate the red tape and confusion they add to supply chain activity.
It’s a breath of fresh air to hear what this guy has to say. Dealing on a handshake is much simpler, but requires honor. It’s been the practice in the oil business for many years. Sure, there are bad guys, but they get ostracized.
Kim Link-Wills Friday, May 22, 2020
Top time sucks in ocean shipping – FreightWaves
Supply Chain Digest Port Technology International Marine Link
Supply Chain and Logistics 