This article is very interesting, revealing many aspects of the international trade in oil. The shadow market for oil from Russia is growing, but there’s probably a limit for it. Some tanker owners and operators will be comfortable with the idea of not using their AIS, and not using the major international P&I clubs and insurance firms. They may use older ships, which are more prone to risk, and are less efficient. They may resort to ship-to-ship transfers, since many large tankers cannot enter ports that are available to them for the shadow shipments. These transfers are inherently riskier, both from accident and pollution standpoints, and will probably lead to accidents.
So Russia may be able to move petroleum, but there may be less cash flow for Russia, and there may be a reduction in overall trade with Russia. These outcomes are what sanctions are trying to create.
Freightwaves’s SONAR app has a lot of excellent data that it makes readily available. This post by the CEO shows some clear trends in freight, particularly ocean freight.
One of the interesting graphs shows that recently the number of containers per shipment has dropped a lot. It’s based on the number of bills of lading, and the container volumes in twenty-foot units (TEU) in green.
The most obvious fact predicting this number is that order size for containers is dropping. Perhaps the shippers need less stuff.
Or perhaps they are finding other ways to get them. Walmart and Home Depot, for instance, are running their own liner services, so perhaps shipments moved on them are not showing up. Or perhaps they are ordering domestically.
The service on the container lines and alliances has been so horrible that supply chain managers who really need reliability are becoming squeamish about using them.
I think we can look for these ratios to stay similar till the container lines and alliances start regularizing their schedules and improving their on-time delivery rates.
SONAR is a good place to look for an overview. Now there needs to be some analysis. Visibility is only so valuable. It needs analytics to determine causes and relationships.
Craig Fuller, CEO at FreightWaves Follow on TwitterTuesday, June 21, 2022