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LACK OF CONTAINERS HURTS GLOBAL TRADE

 


A global shortage of containers continues to hurt global trade with the local freighters feeling the impact as they grapple with delays in deliveries. The situation is even set to get worse as stakeholders in the marine sector project that the shortage, which began last year and attributed to the effects of the Covid-19 pandemic, will persist until 2022. This implies that consumers will have to wait longer for their deliveries and cope with high cost of goods which is in line with an increase in price of containers.

“We are now witnessing delays in our deliveries and high freight costs, for instance a cargo that we were to deliver say in July ends up being delivered in August,” says a Client from Mombasa Port Kenya, In Eastern Africa.

Shippers are waiting for up to three weeks before they could get empty containers with the shortage in supply having a negative impact on cost. Covid-19 pandemic, which is still rampant in Europe and America, has contributed to the shortage as shipping containers are not returning to China due to drastic reduction of Beijing imports.

A global surge in demand for certain goods during the pandemic has upended normal trade flows, stranding empty cargo containers and leading to bottlenecks. As a result, shippers have been forced to pay a premium in order to get shipping containers as the world continues to witness a shortage that has seen freight charges continue on an upward trajectory.

The shortage has seen the cost of cargo change every month as opposed to previously where shippers would have a catalogue that indicated the freight charges for a certain period of time. The cost of shipping a 40-foot container from China moved up to $5,092 from S$3,055 in December before settling at $6,000 in April, according to Kenya's traders lobby.

The fall in cargo has been occasioned by the effects of the Covid-19 and a shortage of containers that have affected the shipping industry across the world.

PIL RESTARTS ITS MZS SERVICE FROM SINGAPORE

PIL is pleased to announce that the company is resuming its direct Mozambique Service from 29 July 2021, offering customers a direct connection from Singapore to Reunion, Tamatave and Mozambique. The enhanced service is part of the Company’s continuous effort to strengthen its service offerings to the Eastern and Southern African market. 

Madagascar and Mozambique cargo which previously relied on transshipment at Mombasa, Kenya, can now enjoy their comprehensive service with better schedule reliability and shorter transit time. The new service will be effective on Kota Hidayah ETA Singapore 29 July 2021. The enhanced MZS service features will be as follows: 

Fleet: 6 PIL Vessels 

Port of Calls: Singapore - Reunion - Tamatave - Maputo - Beira - Nacala - Singapore 

Frequency: Weekly


MAERSK LINE SAUDI ARABIA IN A STRATEGIC PARTNERSHIP WITH KING ABDULLAH PORT

Maersk Saudi Arabia, an integrator of container logistics, announced that it has entered into a strategic partnership with King Abdullah Port, the region’s first privately owned, developed and operated port, to enhance the Saudi Arabia’s logistics capabilities by adding state-of-the-art services and technologies to the port’s offerings. As part of the partnership, both the entities signed a deal to set up Maersk Integrated Logistics Hub, a non-bonded warehouse, to provide comprehensive logistics services and benefit local petrochemical exporters.

The agreement was signed by Mohammad Shihab, Managing Director of Maersk Saudi Arabia, and Jay New, CEO of King Abdullah Port, in a ceremony held at King Abdullah Port. The signing ceremony was attended virtually by Richard Morgan, Regional Managing Director for Maersk West & Central Asia.

The Maersk Integrated Logistics Hub at King Abdullah Port will cover an important logistical requirement of exporters who already have access to Maersk’s solutions such as landside movement of cargo, customs clearance, and ocean logistics, thus ensuring a truly integrated logistics offering. The hub will serve as the focal supply chain solution, primarily for Saudi Arabia’s petrochemical exporters, through the large space allocated for handling and storing cargo. It will play an important role in facilitating the storage of export cargo and enable pallet handling, stuffing and shuttling.

The establishment of the hub is part of a major initiative aimed at increasing the performance efficiencies and competitiveness of Saudi Arabia’s logistics sector. It is also in line with the objectives of Vision 2030, which include transforming the Kingdom into a top global logistics hub connecting Asia, Europe, and Africa, increasing the non-oil exports, and improving the Kingdom’s global ranking on the Logistics Performance Index from 49 to 25.

Located within a two-kilometre radius from the terminal yard and directly adjacent to the customs inspection zone, this hub’s strategic location will greatly benefit the exporters by saving time. Furthermore, most of the exporters based out of the manufacturing hub of Yanbu have had to truck their cargo almost 350 km to Jeddah for loading onto vessels. With the Maersk Integrated Logistics Hub at King Abdullah Port, this distance has been drastically reduced to 200 km. Exporters currently require 14 to 18 days from receiving the booking to loading the material on the vessel. With the new hub, this process will now take only 6 to 8 days, given material availability, thus reducing the turnaround time, increasing efficiency, and improving competitive advantage through reduced logistics costs. The reduction in trucking will also positively contributing towards environmental sustainability through reduced emissions.

Maersk is initially investing in 100,000 sq. mt. of warehousing space during the first two years of operations at the hub, to cater to the annual throughput that will reach 1 million metric tons by third year as demand from exporters grows over the years.

Mohammad Shihab, Managing Director, Maersk Saudi Arabia, said: “The Maersk Integrated Logistics Hub at the King Abdullah Port is an important milestone on our journey of providing logistics solutions for our customers in Saudi Arabia. The multi-carrier origin hub for petrochemical exporters is an affirmation of our commitment to serving Saudi Arabia’s trade and simplifying our customers’ supply chains.”

He added, “At Maersk, we are integrating logistics and providing our customers with single-window access to multiple solutions that will solve their supply chain challenges. We are really excited about bringing our strategy to life and looking forward to serving more and more customers in the future.”

New said: “The strategic partnership between Maersk and King Abdullah Port is an important step in raising the efficiency of the Kingdom’s logistics sector and boosting our capabilities in logistics and trade in line with the Vision 2030 objectives. We are delighted to partner with the world’s leading integrated container logistics company to establish the Kingdom’s first petrochemical hub. We are confident that this will significantly enhance the port’s outstanding operational capabilities by enabling us to provide sophisticated services seamlessly, amid the challenges of the current economic situation and the rapid changes in the industry. The hub will also help our exporters to achieve considerable savings in terms of time and costs besides significantly reducing risks, helping them serve international customers better.”