Freight transportation reports, projects and other news from outside North America
8/8/2022
South Africa's Transnet, Botswana Rail to upgrade line for heavy-haul service
The governments of South Africa and Botswana agreed in principle on joint development initiatives to be implemented by Transnet Freight Rail and Botswana Rail to improve “inter-trade” between the two countries, Transnet officials announced on Aug. 5.
The railroads will upgrade parts of the 126-kilometer rail line between Swartruggens and Mafikeng to enable heavy-haul trains traveling from Botswana to the ports of Richards Bay and Durban. To be funded jointly by the two governments, the project is slated to be completed in 24 months.
The railroads also will build a connecting line from Mamabula in Botswana to Lephalale in Limpopo; the line currently running export coal to Richards Bay.
AD Ports, Hutchison sign strategic partnership pact
Abu Dhabi Ports Group (AD Ports) and Hutchison Ports have signed a memorandum of understanding with Hutchison Ports to identify joint investment and business opportunities related to feedering, logistics, and port activities across the Gulf Council Cooperation countries, Africa and Asia, officials from the ports announced on Aug. 2.
Under the pact, AD Ports and Hutchison Ports will identify joint investment and business opportunities related to feedering, logistics, and port activities.
The two organizations also will form a partnership to operate within Tanzania, where they will explore opportunities “to further enhance the capabilities and market competitiveness of port operations across the East African country,” including Dar Es Salaam Port, officials from the ports said. Potential areas of focus include improving servicing to several of Tanzania’s landlocked remote areas and neighboring countries, cultivating more cargo sources, and enhancing existing supporting logistics and cargo processing facilities.
AD Ports’ portfolio comprises ports and terminals in the UAE and Guinea, and more than 550 square kilometers of industrial zones within Khalifa Industrial Zone Abu Dhabi and ZonesCorp, an integrated trade, logistics and industrial business grouping in the Middle East.
Hutchison operates ports and terminals in 26 countries in Asia, the Middle East, Africa, Europe, the Americas and Australasia.
Container xChange official: ‘Resilience’ in supply chain could limit trade disruptions across Taiwan, China, South Korea and Japan
With the fall peak just around the corner, freight forwarders and shippers “are concerned about the geopolitical risks that will knock as tensions between China and Taiwan increase soon after the U.S. House Speaker Nancy Pelosi visited Taiwan,” according to officials at Container xChange, a technology marketplace/operating platform for container logistics firms.
During 2022’s first seven months, about half the world's container ships passed through the Taiwan Strait, which separates the island from the Chinese mainland, Container xChange officials said, data compiled by Bloomberg.
“The global supply chain is interconnected and all the major stretches like Taiwan Strait are nerve centers of these value chains. And if any one stretch is blocked, the undercurrents are felt across the system — especially at a time when the industry is busy shipping cargo for the peak season, the impact will be reverberated across,” said Christian Roeloffs, cofounder and CEO of Container xChange, on Aug. 4. “What will decide the degree of impact is the tenure of this disruption.”
While Roeloffs expects trade disruptions across Taiwan, China, South Korea and Japan if the military action persists longer or in intensity, “another view is that the supply chain industry has built resilience over these past two years owing to many such shocks in the past,” he said.
“We were expecting lockdowns in China [that lasted 2 months] to impact the peak season negatively. However, we do not see any such disruption, especially on container prices and leasing rates,” Roeloffs added. “Therefore, it will be very difficult to forecast the degree of impact that this show of strength by China will cause on containerized trade in these markets.”
That said, “the immediate impact will be rerouting of the vessels through the eastern side of the island which will add a few days in the voyage of the containerized cargo,” according to information shared by a Container xChange customer with business in Taiwan.
Japan: Three companies, university to study application of aerospace engineering technology to wind-powered vessels
On Aug. 4, Mitsui O.S.K. Lines Ltd., MOL Tech-Trade Ltd., Tokai University and Akishima Laboratories Inc. announced an agreement to launch a joint study related to wind-powered propulsion of vessels by application of aerospace engineering technologies.
MOL, MOLTT, and Akishima Laboratories have moved ahead with the adoption of their jointly developed “ISHIN ship design,” which reduces greenhouse gas (GHG) emissions by using wind as propulsive force. They now plan to implement “more advanced” joint development aimed at optimizing the hull shape for wind-powered vessels, which adopts aerospace engineering technologies in ISHIN ship design, in collaboration with Kota Fukuda, associate professor at the department of aeronautics and astronautics at Tokai University in Japan, partnership officials said.
Adoption of ISHIN ship design on the vessel can reduce GHG emissions by about 5% on the Asia-North America route, but targets a reduction of more than 12% by introducing aerodynamic technologies accumulated in the aerospace engineering field, they said. The MOL Group, which markets petroleum products, has set a target of achieving group-wide net zero emissions by 2050.
For Maersk, record results in Q2
A.P. Moller - Maersk posted record financial results for the quarter ending June 30, officials for the ocean carrier announced on Aug. 3. Revenue increased by 52% compared with the same 2021 period, and earnings more than doubled. The driver? “Strong contract rates in Ocean, rapid profitable growth in Logistics and continued solid performance in Terminals,” said CEO Søren Skou. “Volumes in Ocean were softer as congestion continued and the war in Ukraine weighed on consumer confidence, particularly in Europe. However, in Logistics we grew volumes above the market …”
In the quarter, revenue grew to $21.7 billion; EBITDA and EBIT increased to $10.3 billion and $9 billion, respectively; and free cash flow rose to $6.8 billion. The Q2 net result was $8.6 billion; for the year's first half, $15.4 billion.
European freight rates: Road transport prices broke records in Q2, report reveals
Inflation, weakening demand, social instability and the war in Ukraine are leading to “tumultuous developments” in road freight prices, according to the writers of the Transport Intelligence (TI) / Upply / IRU Road Freight Rate Benchmark report for second-quarter 2022.
The European contract road freight rate index reached an all-time high of 121 points in Q2, up 6.1 points quarter-on-quarter and 13.1 points year-over-year.
The European spot road freight rate index also reached a record high of 134 points, up 11.8 points from Q1 2022 and 20.1 points from Q2 2021.
Inflation is rising in all European countries and reached a record high of 8.6% in the Eurozone in June, weighing on costs and demand, the report’s writers said. And while diesel prices have varied by country since prices have remained elevated in July and are 69% above the January level.
Other findings:
• War in Ukraine: Following the invasion of Ukraine, in March, the EU-27 pre-tax diesel price jumped 69% from its January level.
• Demand weakening: Multiple indicators point to a weakening demand for European road freight, with declining activity in all major economies and inflation rates weighing on consumer and business confidence, the report’s writers said.
• Rising inflation: Inflation is rising in all European countries and reached a record high of 8.6% in the Eurozone in June. Spain is experiencing the highest increase with a price rise of 10.2%, higher than the other major European economies of Germany (7.9%), France (5.8%), Italy (8%) and the UK (9.1%).
• Driver shortage: The shortage affects the entire European continent. Germany is in a particularly critical situation with an estimated shortage of 50,000 to 80,000 truck drivers. Migrant workers account for 24% of the German driver workforce and the loss of Ukrainian citizens returning to defend their country has further restricted the supply of drivers in Germany, the report’s writers said.