Ocean Carriers Waste No Time Trying to Recoup IMO 2020 Costs

January 28, 2020

Price swings in the largest market for marine fuel are filtering down the supply chain as major ocean carriers ask customers to cover costs for using low-sulfur fuel blends.

Maersk last week said in a customer advisory that ocean freight tariffs across all trade lanes will increase by $50 to $200 per forty-foot equivalent unit (FEU) starting March 1 due to a price spike for low-sulfur fuel in Singapore. The International Maritime Organization mandated fuel with a 0.5% sulfur cap be the global standard effective this year.

The “trigger” for the tariff surcharge, Maersk said, is a swing in fuel prices in the largest global marine fuel market. Low-sulfur fuel prices increased “substantially” in Singapore, exceeding $700 per metric ton, more than 20% higher than previous benchmark fuel prices.

“The average increase in January thus is expected to exceed $50 per metric ton,” Maersk said.

Hapag-Lloyd is also said to be considering a similar surcharge, according to ShippingWatch, although its surcharge amount has not yet been determined.

Yet in the same week that Maersk announced the new surcharges, Singapore fuel oil prices dropped close to $100 per metric ton, from a Jan. 7 peak of $740 per metric ton to $641 on Jan. 22, according to international shipowner association BIMCO.

For the full story, please click HERE

Source: American Shipper

US Expands Tariffs to Cover Steel- and Aluminum-based Items

January 28, 2020

– The U.S. will expand existing 25% tariffs on steel and 10% tariffs on aluminum to cover imports of several items made from the metals, including steel nails, tacks, staples wires and cables, a White House proclamation published Friday stated. The duties take effect Feb. 8.

– In the proclamation, the president said imports of raw aluminum and steel have decreased since tariffs took effect in March 2018, but imports of steel and aluminum derivatives (items made from the metals) have “significantly increased. … The net effect of the increase of imports of these derivatives has been to erode the customer base for U.S. producers of aluminum and steel.”

– Aluminum product tariffs will not apply to imports from Argentina, Australia, Canada and Mexico. Steel product tariffs will not apply to Argentina, Australia, Brazil, Canada, Mexico and South Korea, the proclamation said.

For full story, please click HERE

Source: Supply Chain Wave

US Updates IMO 2020 Enforcement Policy

January 22, 2020

The United States is sharpening its focus on enforcement of the IMO 2020 fuel sulfur emissions cap, which could result in harsh penalties for vessel operators caught attempting to sidestep the regulation.

In new guidance issued by the U.S. Coast Guard (USCG), vessels calling on U.S. ports will be expected to carry documents showing they are burning fuel with a sulfur content of no more than 0.5% while in international waters, a regulation that went into force on Jan. 1. In addition to burning lower-sulfur fuel, ships can comply by filtering emissions using a “scrubber” in the ship’s smokestack or by using an alternative fuel such as liquefied natural gas.

Regulations tighten further on March 1, when a high-sulfur fuel carriage ban goes into effect and ships will no longer be able to carry noncompliant fuel in their bunker tanks.

Vessel industry representatives have been skeptical about the ability of regulators in the U.S. and around the world to keep unscrupulous shipowners from cheating by burning cheaper, noncompliant fuel — thereby gaining a significant cost advantage over those that comply.

For the full story, please click HERE

Source: American Shipper

THE Alliance to Ship More From Southeast Asia to West Coast

January 22, 2020

THE Alliance to ship more from Southeast Asia to West Coast

Major container shipping lines will offer more capacity between Southeast Asia and the U.S. West Coast in 2020, signaling that the U.S. sourcing shift away from China will continue unabated even with the preliminary trade detente.

The moves could also help West Coast ports regain some of the cargo that has shifted eastward thanks to a growing number of Southeast Asia liner services hitting the East and Gulf coasts.

Hapag-Lloyd and Japanese liner joint venture Ocean Network Express, members of THE Alliance along with Yang Ming, said the new services will “offer increasing frequency particularly from South East Asia, as well as new direct port coverage and improved transit times.”

The expanded service offering also hints at how THE Alliance will deploy capacity from its newest member, Hyundai Merchant Marine (HMM).

Starting in the second quarter, THE Alliance said it will replace an existing Asia-Europe and Asia-West Coast routes, FE5 and PS7, respectively, with a “pendulum” service that will cover all three continents “with a new highly efficient design.”

The service will utilize 18 vessels of 14,000 twenty-foot equivalent units (TEU) in capacity.

For the full story, please click HERE

Source: American Shipper

Why Procurement Planning is Critical Ahead of Chinese New Year

January 22, 2020

While the United States is just emerging from its holiday season, China and many other Asian countries are days away from theirs. Between Chinese New Year and Lunar New Year, entire countries will just about shut down for a period of several days to more than a week to celebrate.

For organizations with supply chains heavily tied to this region of the world, planning is in order to avoid major disruption.

This year, the Chinese New Year (CNY) will mean closed offices in mainland China from Jan. 24 to 30. Hong Kong’s dates are slightly shorter, from Jan. 25-28. Indonesia, Korea, Malaysia, Singapore, Taiwan and Vietnam are preparing for their own work stoppages over some combination of days during that time period as well.

What does that look like? Delayed production during and after the shutdowns, slowed shipping as the countries play catch up and limited space for last-minute cargo until everything returns to normal. Smart U.S. companies have plans in place to accommodate the disruptions.

For the full story, please click HERE

Source: Supply Chain Dive