Posted on June 24, 2024
Global shipping news

Shipping & Logistics News Wrap, Week 26 

Highlights

  • Container rates continue to climb with further increases expected 
  • Shipping industry misses decarbonisation targets 
  • Transshipment ports face challenges due to Red Sea disruptions 
  • Severe congestion impacts operations at Mundra port 
  • Mitsubishi to build Japan’s first methanol-fuelled ro-ro ships 

Container Rates Continue to Rise 

The latest container rate updates indicate a significant increase, with the Asia-Europe route leading the charge. Drewry’s World Container Index (WCI) for 20 June showed a 7% week-on-week increase, reaching $5,117 per FEU. This marks a staggering 233% rise compared to the same week last year. The ongoing disruptions caused by attacks in the Red Sea, forcing ships to reroute, have contributed to this trend. Drewry expects freight rates from China to continue rising due to congestion at Asian ports. 

Shipping Industry Falling Short of Decarbonisation Targets 

New data reveals that the shipping industry is failing to meet multiple decarbonisation trajectories. The Sea Cargo Charter (SCC) reported a 16.9% deviation from the minimum trajectory set by the IMO’s 2023 GHG Strategy, with only two out of 35 signatories aligning with the targets. This misalignment highlights the significant challenges the industry faces in reducing emissions to meet the Paris Agreement’s goals. 

Transshipment Ports Struggle Amid Red Sea Crisis 

Key transshipment ports, such as Singapore, are experiencing severe congestion due to service diversions caused by the Red Sea crisis. The rerouting of container vessels has led to a 22% increase in average parcel sizes and a 41% increase in handling time for large vessels. Drewry predicts that congestion at major transshipment ports will remain high, with some easing expected as carriers adjust their schedules. 

Mundra Port Faces Severe Congestion 

India’s Mundra Port, the leader in the country’s containerised trade, is grappling with significant congestion. The Container Freight Station Association of Mundra has reported increased backlogs, impacting the normal movement of boxes between CFSs and terminals. The congestion has also affected container rail operators, leading to restrictions on double-stack loading by Indian Railways. 

Mitsubishi Shipbuilding to Construct Japan’s First Methanol-Fuelled Ro-Ro Ships 

Mitsubishi Shipbuilding has secured orders to build Japan’s first methanol-fuelled ro-ro vessels. These ships, scheduled for completion by the end of fiscal 2027, will be constructed at MHI’s Shimonoseki Shipyard & Machinery Works. The vessels will feature dual-fuel engines and innovative design elements to enhance fuel efficiency and cargo handling capabilities. 

House of Shipping Insight 

The dramatic rise in container rates, fuelled by disruptions in the Red Sea and congestion at Asian ports, underscores the sector’s vulnerability to geopolitical tensions. The shipping industry’s struggle to meet the IMO’s decarbonisation targets highlights the urgent need to align with global climate goals. Severe congestion at key transshipment hubs like Singapore and India’s Mundra Port further strains operations, emphasising the necessity for improved infrastructure and more effective strategies. 

Shipping & Logistics News Wrap, Week 26 

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