INDIA EXPORTS RISE IN 2021 AS COVID BITES

India’s merchandise exports in July 2021 rose to $35.43 billion, higher by 49.85 per cent on a year-on-year basis, official data showed on Friday. Exports during July 2020 stood at $23.64 billion. The data by the Ministry of Commerce and Industry also showed that in comparison to July 2019, last month’s exports rose by 35.05 per cent.

“Exports in July 2021 were $35.43 billion, as compared to $23.64 billion in July 2020, exhibiting a positive growth of 49.85 per cent. As compared to July 2019, exports in July 2021 exhibited a positive growth of 35.05 per cent in dollar terms.”

“Non-petroleum and non-gems and jewellery exports in July 2021 were $26.12 billion, as compared to $20.37 billion in July 2020, registering a positive growth of 28.18 per cent. As compared to July 2019, Non-petroleum and Non-Gems and Jewellery exports in July 2021 registered a positive growth of 32.26 per cent.”

Similarly, India’s merchandise imports in July 2021 increased, up by 62.99 per cent, on a year-on-year basis, to $46.40 billion.

“We hope the momentum would continue and the sector closing the year on a very positive note.”

BOXBAY CONTAINER OPERATIONS AT JEBEL ALI - DUBAI

        

DP WORLD SECURE $4.94B IN H1-2021 ACQUIRES SYNCREAON & IMEPRIAL LOGISTICS

 Dubai's DP World secures $4.94b in H1-2021 revenues on strong cargo volumes

DP World is adding more capacities in Africa, including acquiring Imperial Logistics

Cargo throughput through its Dubai and overseas ports showed sizeable growth in first six months of 2021.

Dubai: The Dubai owned ports operator DP World recorded revenues of $4.94 billion in the first six months, a gain of 21.3 per cent, while net profit for the period grew by an even more impressive 75.4 per cent to $585 million.

"This significant growth once again demonstrates that we are in the right locations and a focus on origin and destination cargo will continue to deliver the right balance between growth and resilience," said Sultan Bin Sulayem, Chairman and CEO, with DP World's gains built around on a rebound in global trade and higher consumer spend.

"Our recently announced acquisitions of Imperial Logistics and syncreon bring value-add capabilities in high growth verticals and markets, which will allow us to offer a more compelling set of supply chain solutions. By leveraging our infrastructure across inland logistics, ports and terminals, economic zones and marine logistics network, DP World aims to lower inefficiencies and provide improved connectivity in fast growing trade lanes such as Asia, Middle East and Africa."

Its India operations were again a main driver of growth, while those in Australia and the UK also helped with the first-half total. Cash from operating activities continues to be "strong" at $1.490 billion compared to $1.12 billion in first-half 2020.

The cargo throughput was up a substantial 13.9 per cent for the reporting period. For the second-half- DP World projects growth rates to moderate.

ON TRACK WITH 2021 CAPITAL EXPENDITURE

For the first-half, DP World incurred a capital expenditure of $687 million invested across its existing portfolio.

The company is retaining an earlier forecasts of $1.2 billion as the spend for full-year 2021, with investments planned in the UAE, Canada, Jeddah, Berbera in Somaliland, Sokhna in Egypt, Luanda (Angola), P&O Ferries, London Gateway and Callao (Peru).

New buys deliver

The latest numbers – which show DP World handled 38.59 million TEUs as gross throughput – show the company putting in more distance with the supply chain volatility of 2020, set off by the COVID-19 breakout. The first six month results also build on a fairly strong showing the Dubai entity delivered in the first quarter.

And as Bin Sulayem says, recent acquisitions in South Africa and North America keep adding heft to DP World’s top- and bottomline. Plus, there is its focus on keeping debt down. "We continue to make positive progress with our capital recycling programme - and this combined with the strong operational performance, leaves us well positioned to deliver on our 2022 combined (DP World and PFZW) leverage target of less than 4x net debt to adjusted EBITDA," he added. 

While we are mindful that the COVID-19 pandemic and geopolitical uncertainty could once-again disrupt the global economic recovery, we remain positive on the medium to long-term fundamentals of the industry and DP World's ability to continue to deliver sustainable returns

- Sultan Bin Sulayem of DP World

STRONG PERFORMANCE IN HALF YEAR 2021 RESULT FOR HAPAGG-LLOYD

 

August 15, 2021

Hapag-Lloyd published its figures for the first half year of 2021 today. It concluded with an EBITDA of USD 4.2 billion (EUR 3.5 billion). The EBIT rose to USD 3.5 billion (EUR 2.9 billion), and the Group profit climbed to USD 3.3 billion (EUR 2.7 billion).

“In a market with very strong demand for container transports, we have benefitted from significantly improved freight rates and look back on a very good first half year. Among other things, we were able to reduce our net debt by USD 1.5 billion, although we paid out a significantly higher dividend compared to the prior year,” said Rolf Habben Jansen, CEO of Hapag-Lloyd.

Revenues increased in the first half year of 2021 by approximately 51 percent, to USD 10.6 billion (EUR 8.8 billion), mainly because of a 46 percent higher average freight rate of 1,612 USD/TEU (H1:2020: 1,104 USD/TEU). The freight rate development was the result of high demand combined with scarce transport capacities and severe infrastructural bottlenecks. Transport volumes were up to 6,004 TTEU and thereby 4 percent higher than the comparable figure for the previous year, which was impacted by a slump in demand in the second quarter due to the COVID-19 pandemic. In addition, a roughly 6 percent lower average bunker consumption price, which amounted USD 421 per ton in the first half year of 2021 (H1 2020: USD 448 per ton), had a positive impact on earnings.

While demand remains high in the current congested market environment, it is leading to a shortage of available weekly transportation capacity. For this reason, Hapag-Lloyd expects earnings to remain strong in the second half of the financial year. EBITDA for the full year is expected to be in the range of USD 9.2 to 11.2 billion (EUR 7.6 to 9.3 billion) and EBIT to be in the range of USD 7.5 to 9.5 billion (EUR 6.2 to 7.9 billion).

Rolf Habben Jansen: “We are naturally pleased by this extraordinary financial result. But the bottlenecks in the supply chains continue to cause enormous strains and inefficiencies for all market participants and we have to do our utmost to resolve them jointly as soon as possible. Looking at the market environment today, we however do not believe that the situation will return to normal any time soon – despite all the efforts made and the additional container box capacity that is being injected. We currently expect the market situation only to ease in the first quarter of 2022 at the earliest.”

CONTAINER LINES MAKING PROFITS GOING TO 2022

The container sector is setting sail for its best year ever with super high profits for all. And carriers are working hard to secure that 2022 will also deliver extraordinary profits. When a market is this strong, everyone is making money, even the ones with the lowest level of customer services attached to its ocean transportation products.

What’s happening?

The robust profits container lines reported in the third quarter, the best in a decade, stand in stark contrast to dismal service levels and worsening container imbalances out of Asia that comes with the sting of rates that have hit record levels in the trans-Pacific and six-year highs on Asia–Europe trades.

With rates up significantly compared with last year, and bunker prices down year over year, the carriers managed to shrug off growing supply chain disruption in the third quarter to report a slew of highly positive results.

Maersk Line, the largest container carrier by fleet capacity and a financial bellwether for the industry, reported earnings before interest, taxes, depreciation, and amortization (EBITDA) of $2.3 billion in the third quarter, an increase of 39 percent compared with the same three-month period in 2019. CMA CGM grew its EBITDA 68 percent year over year to $1.7 billion for the quarter, Hapag-Lloyd increased its EBITDA 17 percent to $768 million, Zim Integrated Shipping Services reported an incredible 145 percent growth in earnings to $262 million, and Ocean Network Express saw its EBITDA surge 78 percent to $872 million. While Yang Ming did not provide an EBITDA figure, the Taiwan-based carrier posted an operating profit of $230 million in the third quarter compared with a $38 million loss in the same quarter last year.

Following the carriers’ solid Q3 results, Sea-Intelligence Maritime Analysis is expecting the industry to achieve an operating profit of $14 billion for the full year, while Drewry last month upgraded its operating profit expectation for container shipping in 2020 by 16 percent to $11 billion, a level not seen since 2010.

But even as carriers head for their most profitable year in a decade, frustration is building among their customers that are finding space in short supply, a lack of equipment, and global schedule reliability that in the third quarter tumbled to 65 percent, down almost 15 percentage points year over year.

To cover the sustained high volume on both the trans-Pacific and Asia–Europe trades, carriers have thrown all available capacity into the water, but the demand has quickly filled all vessels and is overwhelming terminals in the United States, Europe, and the UK. Shippers are facing lengthening port delays, cargo rollovers, soaring rate levels, and an array of equipment and congestion surcharges.

‘Prepare accordingly’

Containers were already left out of position during the extensive blank sailings program implemented during COVID-19 lockdowns in the second quarter, and the extreme rebound in demand since economies in Europe and North America reopened in June blindsided the capacity-cutting carriers.

“Everyone has been surprised by the cargo rebound and that is why a lot of the supply chains are under pressure,” Rolf Habben Jansen, CEO of Hapag-Lloyd, told JOC.com in an interview. “It is difficult for the terminals, for the truckers, there are not enough chassis, we can’t find enough ships, boxes are tight. Everyone is affected by this problem at the moment.”

Søren Skou, CEO of A.P. Møller-Maersk, said a stronger-than-expected recovery in demand following the slowdown in April and May led to the reactivation of all available tonnage, with Maersk reporting a 96 percent utilization of its fleet for the third quarter.

CMA CGM said the volume momentum that built through the third quarter had continued into the last quarter, and the carrier’s fleet was operating at full capacity.

SHIPPING CREW FROM AFRICA

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WASHINGTON SET TO TAKE ACTION AGAINST GLOBAL CARRIERS

The stage is set in Washington DC for a bitter fight between global carriers and politicians.

A bipartisan pair of lawmakers, pressed by agricultural exporters, yesterday introduced the Ocean Shipping Reform Act into Congress, a bill which would put in place new minimum requirements for service contracts and give the Federal Maritime Commission (FMC) greater powers.

Carriers have responded to this possible clampdown arguing it is unfair and risks making goods in the US more expensive.

American supply chains have been stretched like never before in peacetime this year, while carriers are on course to post record profits.

The control of shipping by a handful of ocean carriers has really eliminated competition

EVERGREEN ACQUIRES EIGHT CONTAINER SHIPS

Taiwan’s Evergreen Marine has acquired eight containerships in a deal worth around $94.1m. The liner giant is adding seven 1,600 teu vessels and one 7,000 teu unit through its two subsidiaries, Evergreen Hong Kong and Evergreen Asia respectively.

Evergreen Hong Kong has snapped up seven 1,600 teu boxships from Gaining Enterprise, paying $67.1m, while Evergreen Asia acquired the 7,000 teu vessel for $27m. Delivery details have not been disclosed.

Evergreen is currently the seventh-largest liner, with a fleet of around 200 ships, including 116 self-owned. According to VesselsValue the company has 35 newbuilds on order.

MPC CONTAINER SHIPS CLOSES SONGA ACQUISITION

MPC Container Ships ASA announces that it has completed its acquisition of Songa Container AS pursuant to the share purchase agreement to acquire 100% of the shares in Songa for a total value of USD 210.25 million on a debt and cash free basis, as entered into and announced on 22 June 2021.

The consideration is paid partly in cash and partly in new shares, and in total 49,795,250 new shares are being issued in relation to the transaction. The selling shareholders of Songa who are receiving consideration shares have entered into customary undertakings with MPCC pursuant to which the consideration shares are subject to lock-up of up to 3 months from completion of the acquisition.

Constantin Baack, Chief Executive Officer of MPC Container Ships commented: ”It is with great pleasure we announce the successful closing of this milestone transaction. Charter rates have continued to rise since the signing of the agreement, improving the risk-reward dynamics of the transaction even further. This transaction will have an immediate accretive impact on our earnings in a surging container market. Our growing fleet reinforces our industry leading position as an intra-regional trade tonnage provider. The visibility of strong cash generation for the years ahead combined with an extremely low residual value risk makes MPCC an attractive and unique investment opportunity during these exciting times in container shipping."

Arne Blystad, Chairman of Songa Container AS commented: “We are excited to join forces with MPCC. The Company is perfectly positioned to generate super profits in the current strong container market and to consolidate this segment further. The present market parameters constitute one of the most attractive opportunities in container shipping in the last decades.”

The above information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

MSC REVISES SERVICES IN MIDDLE EAST, INDIAN SUBCONTINENT

 MSC is pleased to announce the enhancement of its Middle East, Indian Subcontinent & U.S. East Coast network, which now includes 3 distinct services. MSC has revised the rotation of the existing Indus Express service and Indusa service and is also launching a new Indus 2 service, starting on 30 August 2021: -  The Indus Express service will focus on Northwest India, Pakistan, the Middle East and U.S. East Coast markets. -  

The Indusa service will connect Southeast India, Sri Lanka, and Bangladesh to U.S. East coast, with a call at Colombo in Sri Lanka to reinforce our offering for cargo shippers in the Indian subcontinent. -  The Indus 2 service will focus on Northwest India and U.S. East Coast markets. All 3 services will operate as standalone MSC services offering competitive transit times from the Middle East and Indian subcontinent region to the U.S.

MPC CONTAINER SHIPS SECURES $70 MILLION REVOLVING CREDIT FACILITY WITH CIT GROUP

MPC Container Ships ASA is pleased to announce that it has entered into a USD 70 million three-year revolving credit facility agreement with CIT Group at attractive terms. An initial drawdown of USD 40 million has been used to refinance existing debt. 

As a consequence, the previous term loans with Beal Bank and CIT have been repaid in full. Further drawdowns under the facility will strengthen the free liquidity and may be used for vessel upgrades, investments or general corporate purposes. 

CEO Constantin Baack comments in relation to the announcement: "Having secured significant charter backlog, we are pleased to add a flexible instrument to our capital structure, whilst adhering to our strategy of moderate leverage. By securing the facility we are able to reduce our financing costs and extend the maturity. 

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.” 

DP WORLD SET TO ACQUIRE SYNCREON NETWORK IN A US$1.2 BILLION DEAL

Dubai-based logistics giant DP World has announced its intention to acquire Syncreon, a US-based global logistics provider that specialises in the design and operation of complex supply chains for the high growth automotive and technology industries. 

The acquisition is a 100 per cent of syncreon for an enterprise value of US$1.2 billion. This transaction is subject to customary completion conditions and is expected to close in 2021. 

Syncreon provides specialized value-added warehousing and distribution solutions through a variety of manufacturing, export packaging, transportation management, reverse/repair and fulfilment services. syncreon has a global presence across 91 sites in 19 countries and services a large and diversified portfolio of customers made up of multinational companies. The group focuses on two key segments. Firstly, large technology customers to enable eCommerce and omni-channel fulfilment and aftermarket services.

Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, said: “We are delighted to announce the acquisition of Syncreon, which adds significant strategic value to DP World given its strong logistics solutions capability, and will allow DP World to deliver end-to-end solutions to cargo owners.

“Syncreon’s complex solutions capability brings strong long-term relationships with cargo owners, which fits with DP Worlds vision to provide smart tech-led supply chain solutions to enable trade across key markets.

“Syncreon’s exposure to the sizeable, fast-growing technology and automotive industries offers significant growth opportunities over the medium to long term. We aim to build on this platform to deliver greater scale and provide compelling value add supply chain solutions to cargo owners across a wider market.”

Syncreon has long-standing partnerships with customers averaging 18 years, and high contracts renewal rates.

The acquisition will be funded from existing available resources. DP World continues to make positive progress on its capital recycling programmes and remains fully committed to its leverage target of below 4.0x Net Debt/EBITDA by the end of 2022.

Brian Enright, CEO of Syncreon, added: “We are excited to join the DP World group as we believe that Syncreon will benefit from the group’s significant expertise in the wider supply chain and excellent relationships with cargo owners. We share the vision of serving our customers through removing inefficiencies and delivering value add solutions. While we have enjoyed great success over the years, we believe being part of DP World will enable us to take the business to other markets”.