Posted on April 8, 2024
Global shipping news

Weekly Shipping & Logistics News Wrap, Week 15 

Top Highlights 

  • Carriers raise FAK rates for Asia-Europe trade 
  • Baltimore Port to reopen for smaller ships 
  • MSC faces $63 million fine over regulations  
  • EVs gain momentum in Asia’s logistics 
  • Railroads tackle Baltimore Port disruptions 

Let’s look at the above shipping and logistics headlines in more detail: 

Carriers Implement FAK Rate Hikes Amid Asia-Europe Trade Challenges 

In response to the continuous slide of container spot freight rates on the Asia-Europe route, shipping carriers have strategically unveiled new freight all kinds (FAK) rate hikes. Despite measures to divert vessels away from potential threats in the Red Sea, rates have persistently trended downward. However, specific trade lanes, notably from Colombo to Dubai, have witnessed a dramatic 62% rate increase due to restricted air freight capacity.  

Major carriers like Hapag-Lloyd and CMA CGM are setting ambitious FAK rates for mid-April in an effort to stabilize the market. This rate adjustment comes as carriers also face escalating fuel costs, with Zim introducing a significant bunker adjustment factor (BAF) charge for Asia-Mediterranean shipments, three times higher than on other routes, as a countermeasure to rerouting costs caused by regional instabilities. 

Strategic Reopening Plans for the Port of Baltimore to Welcome Smaller Vessels 

The US Army Corps of Engineers (USACE) has announced a tentative target date for the partial reopening of the Port of Baltimore by the end of April. This move will allow a limited access channel with a depth of 35 feet to accommodate smaller container ships and mitigate some of the logistical backlogs caused by an earlier incident. This phased reopening strategy includes the ongoing removal of containers from the Dali vessel, marking a significant step towards resuming normal operations. USACE aims to restore full access to deeper vessels by the end of May, signaling a return to full operational capacity and supporting the logistical flow crucial to the regional and national economy. 

Mediterranean Shipping Company (MSC) Under Scrutiny with Proposed $63 Million Fine 

The Office of Enforcement at the US Federal Maritime Commission (FMC) has proposed a hefty fine of at least $63.3 million against MSC, the world’s largest ocean carrier, for alleged violations of the US Shipping Act during the supply chain crisis. The charges include billing practices that unfairly targeted third parties and inappropriate charges for non-operating reefers, among other infractions. These actions, deemed as “knowingly and wilfully” violating shipping regulations, highlight the tensions and regulatory challenges within the shipping industry at a time when global supply chains are under unprecedented stress. MSC has indicated its intention to vigorously defend against these allegations, emphasizing the legal and operational complexities involved. 

Electric Vehicles (EVs) Take Center Stage in Asia’s Logistics Sector 

DHL and FedEx are spearheading the logistics industry’s shift towards electric vehicles (EVs) in Asia, reflecting a broader commitment to sustainability and carbon neutrality. With the electric vehicle ecosystem in Asia poised for significant growth, these logistics leaders are investing in fleet electrification and sustainable operations. DHL’s Batam EV Center of Excellence in Indonesia represents a groundbreaking effort to enhance the EV supply chain, offering comprehensive logistics services tailored to the needs of the EV market. This initiative, coupled with FedEx’s milestone in cross-border EV package delivery, underscores the sector’s proactive approach to embracing green technologies and reducing environmental impact. 

Railroads Enhance East Coast Operations to Address Baltimore Port Disruptions 

Norfolk Southern and CSX are taking proactive measures to address potential freight congestion resulting from the partial closure of the Port of Baltimore. By introducing dedicated intermodal services and expanding rail capacity, these railroads are ensuring the continuity of cargo movement across key East Coast ports. This strategic response includes establishing direct on-dock services to enhance efficiency and minimize disruption. These efforts reflect the railroads’ commitment to maintaining the flow of goods despite challenges, underscoring the importance of adaptability and partnership in maintaining robust supply chains. 

House of Shipping Insight 

This week in shipping and logistics showcases the industry’s dynamic response to a variety of pressing challenges. From innovative strategies to combat declining freight rates between Asia and Europe to the tactical reopening of the Port of Baltimore, the sector demonstrates resilience and adaptability. The substantial fine facing MSC for alleged Shipping Act violations during the supply chain crisis brings to light the complex regulatory environment in which shipping companies operate. Meanwhile, the accelerated adoption of electric vehicles by logistics leaders like DHL and FedEx signals a significant shift towards sustainability, aligning with global environmental goals. Finally, the expansion of rail services by Norfolk Southern and CSX to mitigate port disruptions exemplifies the collaborative effort required to ensure the smooth operation of global supply chains. Collectively, these developments reflect a shipping and logistics industry that is evolving rapidly to meet the demands of a changing world, highlighting the importance of innovation, regulatory compliance, and environmental stewardship. 

Weekly Shipping & Logistics News Wrap, Week 15 

News categories

Other news

Stay informed and stay ahead with the latest updates from House of Shipping. Our news section is your source for insights into the ever-evolving world of shipping, logistics, and consultancy.
Global Shipping News Week 20
Weekly Shipping & Logistics News Wrap, Week 20 
Top Highlights  Asian Ports Face Congestion as Red Sea Rerouting Increases Pressure  Recent rerouting of shipping through the Red Sea is causing...
shipping logistics news 19
Weekly Shipping & Logistics News Wrap, Week 19 
Top Highlights  Shipper Frustration Grows as Spot Rates Soar with Demand  A surging demand across Asia-European trades has caught carriers and forwarders...
Hos weekly wrap18
Weekly Shipping & Logistics News Wrap, Week 18 
Top Highlights  Let’s look at the above shipping and logistics headlines in more detail:   Port Congestion Surcharges Imposed by Asian Feeder Operators ...

Sign up for House of Shipping’s
news and insights

Sign up for our newsletter and receive the latest news, trends and developments directly in your inbox.
Newsletter Form

New Insights and Innovations - House of Shipping