Francis Scott Key Bridge Collapse

Baltimore Sues Over MV Dali Bridge Collision

The city of Baltimore has filed a lawsuit against Grace Ocean and Synergy Group, alleging that the MV Dali, which caused extensive damage to the Francis Scott Key Bridge last month, departed the port in poor condition with an inexperienced crew.

According to the lawsuit, the containership experienced power failures, rendering its propulsion and steering systems non-functional as it approached the bridge, resulting in a collision that the crew couldn't prevent.

Legal action commenced between Baltimore city council and ship manager Synergy Group and shipowner Grace Ocean, both based in Singapore, alongside an FBI criminal investigation.

Maersk, however, appears to be excluded from the case due to the specifics of its charter agreements.

In response, Grace Ocean and Synergy Group have sought exoneration from liability or a limit on liability to $43.7 million, based on the value of the vessel plus pending freight, minus repair and salvage costs.

While a fuel issue could explain the loss of propulsion, the simultaneous loss of power across the entire vessel is suspicious and remains unexplained.

‍

Red Sea Updates

Houthi Missile Attack Damages Ship in Red Sea

Houthi rebels launched a missile attack damaging a ship in the Red Sea, with no casualties reported. The attacked ship was identified as the Cyclades, a Malta-flagged, Greece-owned bulk carrier. There were separate incidents involving drones near U.S. warships and an Italian frigate.

Houthi attacks on shipping have been ongoing, purportedly in response to the conflict in Gaza. Despite a decline due to airstrikes, recent incidents suggest a resurgence in Houthi activity, including drone attacks on U.S. vessels.

Iran seizes MSC Aries with crew safety confirmed

The MSC Aries, with 25 crew members, was seized by Iran on 13th April. The shipping firm MSC confirmed the crew's safety and ongoing discussions with Iranian authorities for their release and cargo discharge. Iran's action followed a suspected Israeli strike on its consulate in Damascus.  

The International Transport Workers’ Federation prioritises the crew's welfare and urges Iran for their immediate release.  

‍

Ocean Import Updates

Shipping rates and trends  

According to Drewry, while rates on routes between the Pacific and North America have decreased slightly, there have been small increases in trade between Asia and Europe. However, the previously rising prices for shipping between North America and Europe have recently stabilised.

Meanwhile, rates remain high for shipping between Asia and North Europe and the Mediterranean, with some carriers aiming to increase prices even further in May. There have also been reports of equipment shortages, especially 40ft containers in China base ports.

Disruption in the Middle East due to the seizure of MSC Aries has not yet affected rates, but there may be increased insurance costs for shipments from India to the Middle East.

There have been delays due to the loss of the MSC Aries, with several thousand export containers waiting to depart from India.  

Rates from Asia to North America remain below their earlier peaks but are still significantly higher than in 2019.

Drewry's composite index, which measures shipping rates, remained stable at $2,706 per container, marking a 55% increase compared to the previous year.

Drewry anticipates that rates for shipping from China will remain steady in the upcoming week.

Our expertise allows us to provide tailored solutions that address the complexities of the market. Our team can navigate these changes effectively, ensuring smooth operations for our clients with cost-effective solutions.

Feeder operators in Asia implement surcharge due to port congestion

Asian feeder operators have introduced an additional charge to cover growing expenses they attribute to port congestion.

The Asian Feeder Discussion Group (AFDG) placed a notice in Singapore’s Business Times on 19th April, announcing that its members had initiated an 'emergency cost recovery surcharge' since the previous Monday. This surcharge aims to offset increased operating costs caused by port congestion.

The surcharge, applied one-way, amounts to $40 per container for routes from Singapore to various destinations including Jakarta, Belawan, Semarang, and others. It increases to $75 per container for routes to Bangkok, Danang, and the Philippines, and to $100 per container for routes to Karachi, Chittagong, and other locations. Shippers are required to cover half of the surcharge for empty containers.

AFDG stated that its members have implemented various contingency plans, such as omitting certain stops and speeding up vessels, to maintain schedule reliability and service coverage. Despite these efforts, they have encountered significant rises in operational costs.

The surcharge will remain in effect until further notice.

Our team is equipped to provide tailored solutions for the evolving changes within the logistics industry. We are adept at adapting to market dynamics, recommending proactive measures that ensure your goods stay on the move.

Congestion at Chinese ports after International Workers Day and weather conditions

Port congestion has also resurfaced at Chinese ports this month, causing delays in berthing across major regions including Bohai Rim, Yangtze, and Pearl River Delta. Ships rerouting around the Cape of Good Hope have contributed to longer queues at some Asian ports like Singapore and Port Klang.

Lack of labor at the docks and ports is a significant constraint during these holiday periods. This causes delays in ports and disruptions in vessel unloading and container handling.

Vessel congestion and adverse weather have led to extended waiting times at ports such as Qingdao, Ningbo, and Shanghai, with delays of up to two days. Southeast Asian ports like Singapore, Tanjung Pelepas, and Port Klang have also experienced increased congestion, resulting in delays of one to two days.

However, as of the most recent report, port congestion has slightly decreased to 1.46 million teu compared to the previous week, with reductions in delays observed across all major Asian ports. Overall congestion has decreased by approximately 250,000 teu compared to the same time last year.

Warnings of rising oil prices amid Middle East instability

The World Bank has issued new warnings about surging oil prices, contributing to ongoing instability in the Middle East, which could increase risks for supply chain managers, forwarders, and shippers.

The financial institution cautioned that a significant escalation in hostilities between Iran and Israel could drive oil prices above $100 per barrel, further unsettling the supply chain industry after Iran's recent seizure of a container ship.

Drewry MD and head of supply chain advisors Philip Damas mentioned potential impacts for carriers, including diversions to ports in the UAE and Oman, although bringing latent capacity online at these ports could offer a short-term contingency option.

However, this wouldn't fully alleviate the situation for shippers and forwarders, who could face various impacts, including service disruptions and new surcharges.

‍

Carbon Emissions Surge in Far East-Mediterranean Trade

Furthermore, carbon emissions in the Far East-Mediterranean trade have surged, with the carbon emissions index (CEI) increasing by over 60% in the first quarter of this year. The CEI for Far East-Northern Europe trades also rose by 20% year-on-year.

Although container shipping faced overcapacity concerns last autumn, Red Sea diversions have utilized this excess capacity. The global average speed of large ships has increased, but older, smaller, and less fuel-efficient vessels are being redeployed.

The rise in longer routes is expected to worsen carbon emissions performance compared to 2023 levels, according to Xeneta. Meanwhile, some shippers switching to air cargo or sea-air routes through Dubai or Colombo have further elevated emission levels.

‍

Border Target Operating Model (BTOM): Second phase now live!

The second phase of the Border Target Operating Model BTOM is now live and will enforce full sanitary and phytosanitary checks on EU imports to Great Britain. This includes checks on medium-risk animal products, plants, and plant products, as well as high-risk food and feed of non-animal origin. These checks will be conducted physically, documentarily, and for identity at UK border control posts.  

The third phase of the BTOM is scheduled to commence on 31 October 2024. This would include the introduction of safety and security declarations for imports into Great Britain from the EU.  

Join our webinar: BTOM - Phase 2 Lessons Learned, Common User Charges Explained

Friday 17th May | 11am BST

Join international freight & customs experts Unsworth UK and Ashford Port Health Director Anthony Baldock in a webinar that will shine light on critical lessons learned since physical inspections went live at BCPs across the UK .

We'll also share essential insight on the Common User Charge, how POAO and plant imports will be effected by the changes and what you need to do to ensure minimal impact to your Supply Chain and keep your imports flowing freely into the UK. The event includes a Q+A session, where you can get answers to your most pressing questions. Click the link below to secure your place.

Click here to register for our webinar.

No two logistics challenges are the same. We understand this and tailor our solutions to meet your specific needs. Our teams work closely with you to develop strategies that address your unique challenges effectively and efficiently.

Our expertise allows us to provide tailored solutions that address the complexities of the market. As shipping companies show signs of flexibility in contract allocation coverage and equipment release, our team can navigate these changes effectively, ensuring smooth operations for our clients. Our strategic approach includes offering guidance that allows businesses to plan and adjust their logistics strategies accordingly.