Tag Archives: ocean shipping

Quote

China cargo collapse

This interesting article shows how CargoMetrics is using data on ship lading, IoT readings, and vessel tracking to determine the amount of trade to and from China right now. the Coronavirus problem in China has essentially caused ocean commerce to and from China to plummet since Chinese New Year (CNY).

Bulk shipments such as iron ore and coal have dropped over 40% according to the article. Container shipments out of China have also dropped, probably due to the disruption of work schedules at Chinese manufacturers.  There are also issues involving quarantine of ships and cargos due to the virus.  The article is especially good when it uses graphs to show the changes.

Of course, this is a great promotion for Cargometrics’ capabilities.  I think one would have to look closer to discover how well Cargometrics’s data truly represents the entire range of activity, but the trends shown are certainly marked.

One very interesting fact the article gives is that petroleum imports have not dropped yet; they are up by a considerable amount. This may be due, so they say, to the longer transit times. The ships may have to lie to near Chinese ports when they cannot unload due to the quarantines or port handling issues.  The other shoe may yet fall even in the tanker business.

 

American Shipper 2020-02-22 074814     Greg Miller, Senior Editor   Thursday, February 20, 2020  via CargoMetrics data reveals depth of China cargo collapse – FreightWaves

1 Comment

Posted on February 22, 2020 by in Logistics, Ports, Shipping, Supply Chains

Tagged , , , , , , ,

Quote

Coronavirus sparks possible force majeure

 

Force majeure is a rarely invoked clause in many contracts. It frees all parties from obligations during the time of some major catastrophe beyond their control, such as war, strikes, riots, crimes, or so-called acts of God (earthquakes, hurricanes, volcanic eruptions, epidemics, and so on).  It seems that some Chinese shipyards and ports are applying for papers from The China Council for the Promotion of International Trade stipulating force majeure conditions.

This would potentially allow ocean carriers to cancel ship runs, lengthening supply chain transit times for cargoes.  There are already long delays. The extension of Chinese New Year to give more time to adjust to the Coronavirus outbreak also introduces delays.

It’s hard to say how such a clause would affect IMO2020 compliance. Shipyards will be closed, preventing scrubber installations, and so there will be long delays in fitting out ships with required scrubbers.  This may go on a lot longer than anyone thinks, since backlogs were already long on scrubber installations.  I doubt that IMO2020 rules on low-sulfur fuel use will be changed to accommodate force majeure, so carriers will simply have to do with fewer ships than they planned for. Shippers, their customers, will take the hit.

Splash-logo-Feb-Aug-e1519814055424    FEBRUARY 4TH, 2020 Jason Jiang JASON JIANG

via Coronavirus sparks force majeure conjecture – Splash 247

1 Comment

Posted on February 4, 2020 by in Shipping, Supply Chains

Tagged , , ,

Quote

Asia-Europe rollovers are back

It appears that ocean carriers are again playing fast and loose with delivery dates for cargo.  There’s a telling remark by an NVOCC source: “You might be able to book at that rate, but you have absolutely no idea when you are going to get the boxes shipped.”

Carriers still have not got the message that most shippers want their cargo when it was promised.  There might be a few that can stand a long delay, but the trend in inventory over the last 20 years has been toward rightsizing inventory by factoring in its logistics.  You can’t do that well if there is substantial variation in lead times. The formula for overall variation of inventory— measured by variance (square of standard deviation)— weights variance of lead time by the demand, but variance of demand by the lead time.

Looking at the formula, a mathematical truth deducible simply from the definition of variance and the assumption of independence of demand and lead time distributions, shows that often lead time variation has an outsized effect.

Ocean carriers can’t control the demand, but they can control the lead time. But it seems that they ought to spend more time thinking about how to help keep the customer’s overall variation low, rather than only dealing with what they alone can control.

Time to get on the supply chain thinking boat!  It left the dock years ago!

logo

By 

 via Asia-Europe carriers leave boxes on quays as they eye better-paid cargo – The Loadstar

1 Comment

Posted on January 17, 2020 by in Logistics, Service Management, Shipping, Strategy, Supply Chains

Tagged , , , ,