On the same day, Hapag-Lloyd upped its financial outlook, Moody’s Investors Service raised the carrier’s credit rating by one notch, with a stable outlook. Preliminary figures show a year-over-year Q3 EBITDA increase of $112 million despite volumes dropping 3%.
Hapag-Lloyd’s 28% uplift in earnings guidance follows Maersk’s 20% hike this week and is a likely precursor to what many analysts are now saying will be a very lucrative year for the liner industry.
Container spot rates, representing about half of revenues on the major trades, soared while carriers also benefited from built-in bunker and low-sulfur fuel surcharges levied on shippers.
Collectively worth £77.6m, the UK government has signed agreements with four ferry operators Brittany Ferries, DFDS, P&O, and Stena, to provide freight capacity to nine routes serving eight ports equivalent to over 3,000 HGVs per week.
The new contracts attempt to mitigate the risks of disruptions to critical freight flows as the UK and the European Union (EU) adjust to new border processes following the UK’s transition period from EU rules at the end of this year.
These ports include Felixstowe, Harwich, Hull, Newhaven, Poole, Portsmouth, Teesport, and Tilbury. The contracts will be in place for up to six months after the transition period, the government said.
Truckload capacity for shippers is quite challenging to secure right now in the United States. For the 6th week in a row, the Outbound Tender Reject Index (OTRI) has remained above 25%, meaning that one in four electronically tendered loads are being rejected at contracted prices.
The lack of available capacity has also been “reflected in the premium firms are paying.” Rates remain high at $2.89/mile for dry van and $3.29/mile for reefer, inclusive of fuel. On a national level, rates are still up 26.5% year-over-year.
China’s Ministry of Transport has opened up ten ports for foreign crew changes as it eases entry restrictions for foreign nationals amidst the global Coronavirus pandemic.
The Ports of Dalian, Tianjin, Qingdao, Shanghai, Ningbo, Fuzhou, Xiamen, Guangzhou, Shenzhen, and Haikou have opened up for foreign ship crew changes.
However, protocols are set where if the number of Covid-infected crew members surpasses 10, authorities will prohibit the company’s vessels from crew changes until a re-evaluation is done.
Chinese authorities have identified imports of refrigerated and frozen foods as a potential culprit spreading coronavirus after several cases emerged at seafood markets in Beijing. Officials are now testing 11 million residents from Qingdao’s port city after an outbreak was tied to 2 dock workers handling imported frozen seafood.
China’s national customs agency is now testing cold-chain packages arriving in the country. As a result, it has uncovered that frozen squid from Russia and fish from Indonesia and Norway in recent weeks carried traces of the virus. Imports from at least two entities—an Indonesian seafood company and a Norwegian-flagged fishing ship— have now been suspended for a week.
Some researchers say transmission is technically possible when food is shipped at low temperatures, which tend to preserve viruses, though it’s a long shot. The World Health Organization maintains that there is no need to disinfect food packaging.
Happy Friday, folks! Don’t forget to check out last week’s news and come back next week for the following Friday Five logistics news roundup!
U.S. demand increases and Maersk continues its acquisition spree as even more pressure is heaped on the already strained supply chain. All this and more in this week's Friday Five.
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