Sea Archives | Page 65 of 70

Valuable automotive RoRo vessel abandoned mid-Atlantic – and it is fully loaded

Feb 23, 2022 | Automotive, Sea, Supply Chain

The Felicity Ace - which has not sadly sunk - was en-route from Germany to the USA, with 4,000 Volkswagen AG vehicles aboard, when it caught fire near the Azores islands in the Atlantic Ocean last week. The Portuguese Air Force were the first to arrive at the stricken vessel, air-lifting off the crew and leaving the Felicity Ace to float mid-Atlantic, awaiting the arrival of fire-fighter tugs.

The RoRo ship was carrying about 4,000 Volkswagen AG vehicles, which could cost the brand at least $155 million, according to risk-modelling estimates, with Volkswagen, Porsche, Audi, Bentley and Lamborghini models on the vessel. Auto manufacturers other than VW may have lost about $246 million worth of vehicles.

Two large tugs with firefighting equipment rendezvoused with the Felicity Ace earlier this week to start spraying water and work with an initial salvage team that was already on board to cool down the ship.

No oil leakage has been detected, the vessel remains stable and MOL are expected to set up a website to provide updates on the incident.

This latest incident underlines once again the precariousness of global supply chains and the critical need for appropriate marine insurance cover.

The loss of so many vehicles and critical RoRo capacity - which could be the equivalent of 100k vehicles p.a. until the ship returns - comes at a bad time for global carmakers who are in the middle of a supply chain crisis sourcing semiconductors, resulting in extended delays for new cars and is likely to result in rate hikes, on a transport mode that was already massively over-subscribed.

The fire on the Felicity Ace could drive a marine re/insurance market loss of $500 million and while shipping losses have declined over the past 10 years, analysis shows that fires on board vessels remains one of the main safety concerns and have actually increased in recent years.

Metro did not have any of our customers products on this vessel but we are well prepared to provide assistance in air freighting replacement vehicles to their destinations to ensure demand is satisfied. We move huge numbers of vehicles every year globally by all modes and always consider and deliver available solutions in the current global market, within the automotive vertical, regardless of the challenges.

Carriers like MOL operate under conditions that limit their liability and may even require you to compensate them, in certain circumstances. Any compensation you may eventually receive is likely to be considerably lower than your actual loss.

Metro recommend and offer All Risk marine insurance cover that protects your cargo during every stage of transportation and storage, on a per shipment or annual cover basis, to the full value of the goods.

Metro has specialised in the automotive and construction vehicle sectors for over four decades. Working with many of the most respected and established brands, our specialist teams coordinate the end to end movement of vehicles and machinery around the world.

Long-standing partnerships and volume agreements with the leading RoRo carriers and container shipping lines means we can offer the widest choice of services, routes and solutions.

For further information please contact Tom Fernihough, our Automotive Director, for the latest advice and market news relating to the global supply chain of finished vehicles.

Image source: Portugese Navy

Protecting our customers supply chains – future proofing during a tough time

Feb 10, 2022 | Air, Sea, Supply Chain

We are taking all necessary steps to secure capacity, to protect our customers’ air and sea freight needs through expanded carrier relationships and selected charter deals.

Even against the background of low capacity and record-breaking spot rates, airlines and shipping lines, for a variety of reasons, have often failed to come through with the solutions we need and in continuing to meet our shippers’ needs, we need to be innovative.

While a few shipping lines are tinkering with developing their own airlines, in a bid to offer their biggest customers a single solution for their shipping needs, the reality is that the narrow airport-to-airport offer of most air carriers, is massively short of the integrated logistics solutions that we deliver and the biggest shippers will never put ‘all their eggs in one basket’. Agility between transport modes is now imperative to ensure product arrives in market or at the manufacturing facility on time.

Maersk has an estimated 70,000 shipper customers and while its airline subsidiary, Star Air, currently operates for UPS, it seems highly likely that, once it has the right infrastructure and equipment in place, Maersk will kick-out UPS and replace it with its own shippers, though this will represent a tiny percentage of the customer base.

Rather than looking for a one-stop shop, our experience of air freight customers, is a requirement for speed, transparency, quality and reliability, at market-competitive rates. This is what we do, day in and day out.

In many respects the flying part of an operation is the easy bit, it’s in the ground-handling and the logistics at either end, that makes air freight successful and can provide competitive advantage, if executed efficiently. Yet none of this is being integrated and offered by airlines and it is extremely unlikely that the shipping lines will be able to. Metro do this in a tailored way, down to consignment level, ensuring expectations are met and ideally exceeded.

The airlines have, in the past, allowed cargo to be no more than a contribution to the fixed costs of a passenger flight. They have shown little or no interest in the ultimate customers’ situation or needs, and appear to have learned little from the integrators, who took so much of their market share, through the end-to-end management of smaller cargo movements. This is where innovation and hard work have delivered results to our customers and will continue to in the future with a true door to door measurable service and deadline driven solution.

It would have been inconceivable before the pandemic that the cash haemorrhaging container shipping lines would logically consider moving into air freight, but with billions to spend, it seems anything is fair game. However, now when many of the delays are caused through the inefficiencies and dysfunctionality of ocean shipping schedules, it looks like an exceptional business model. Broken supply chains need repairing after all – and that’s where the time critical air freight product becomes essential delivered through experience, relationships and expertise.

Metro are constantly evolving and innovating, to add more value-added services, and customer-focused initiatives.

This total commitment to the customer, valuable technology and complete door-to-door solutions is a mind-set that air and sea carriers are simply incapable of providing.

We are driven entirely by our customers’ needs and expectations. For further information contact Elliot Carlile, who would be delighted to talk to you about your requirements.

The World’s biggest container line freezes out small shippers

Jan 27, 2022 | Sea, Supply Chain

Leading shipping line, Maersk, has decided to focus on its largest volume customers, in a move that jeopardises the future of SME forwarders and leaves many shippers potentially exposed.

It is widely reported in the trade press, that small and medium-sized freight forwarders fear for their survival, following Maersk’s decision to offer them only its web-based spot market product, which is quite often unavailable on many trade lanes and routes.

Metro have secured long-term contracts with our partner carriers and shipping lines, across the three shipping alliances, but smaller forwarders, it would appear, are unable to follow suit and will face problems securing space and rates.

With Maersk, smaller forwarders can only get spot rates, which means they cannot plan a shipment in advance, because the spot quote has a very short validity. It can expire on the same day if the selected vessel runs out of space and it is not valid on the next vessel, which really restricts options for the forwarder.

While Maersk is the only carrier to focus on its biggest direct shippers (or BCO’s - beneficial cargo owners as they are termed), it is inevitable that other carriers may be considering a similar approach and the trade press is reporting feedback from sources that this is the case.

None of the shipping lines have yet made a clear statement that it planned to leave out forwarders in the future, but problems have been reported with making bookings. Smaller forwarders have been told late that there is no available space, or carriers are elevating pricing to a level that renders a shipment unviable, which raises suspicions of intention, according to trade articles.

For some medium sized forwarders, contracts have been renewed by the lines, but sometimes the rate is significantly higher, which is raising concerns that Maersk’s decision is the first step for other shipping lines to follow their strategy.

The problem for SME forwarders is that the carriers are offering bigger forwarders like Metro longer-term deals and that is immediately impacting smaller forwarders worldwide, because those kind of contracts are not now within their reach.

Without clear signals, and in a market where no shipper or forwarder can afford to shut the door on one possible carrier option, forwarders see little room to manoeuvre, but they are bracing themselves for the Maersk-type scenario they dread.

A trade source told the media this week that Maersk’s removal of contracted capacity had prompted other lines to do the same, claiming that one shipping line had “unofficially” told him that it was reducing capacity for smaller customers by 40%.

Another source concluded: “You can count main shipping lines on the fingers of your hands, but I think a few should not be able to kill thousands of freight forwarders. This is the risk.”

This is not the first time that container shipping lines have sought to cut-out freight forwarders and while previous efforts have quickly floundered, the digitalisation of the freight process, means that this time around they can offer short-term access to services via their spot rate platforms, without supporting SME forwarders.

In our view the freight forwarder is more essential than ever before, in supporting customers overcome the continuing minefield of logistical problems and in supporting carriers operate their capacity effectively.

Increasingly reliant on digital tools, carriers do not have the mindset or capability, to provide the support, feedback and service that shippers - of all sizes - need today.

We help our customers go global with ease, with advice, online services and real-time visibility of every shipment's journey.

Shipping lines manage expensive assets and resources, that move between ports on fixed routes, but modern supply chains are fluid and need to react quickly to keep pace with demand, which is where a forwarder like Metro is invaluable in identifying requirements, finding solutions and allocating the right resource. Credibility and loyalty to our partners in the supply chain built up over decades really does make a difference.

And unlike the lines, who will favour their own services, we scan capacity opportunities globally, so that we can direct your cargo where your deadlines can be met in the most efficient and cost-effective way possible.

Our goal is to help our customers improve productivity and profitability, to enhance their bottom-line and make them more successful. Through unique initiatives and innovation.

Please contact Elliot Carlile or your usual Metro account manager, to discuss the best route to market and current fluid situation in the global logistics environment. We will have the answers that you need to plan your business continuity, in a challenging environment.

China’s continued zero-Covid challenge for supply chains

Jan 27, 2022 | Air, China, Coronavirus, Sea, Supply Chain

The lockdowns and restrictions that China’s zero-Covid strategy risk, may create greater disruption than earlier waves of the pandemic, threatening already stretched global supply chains.

Beijing’s strict zero-Covid policy has curbed local outbreaks with mass testing, snap lockdowns, vigilant surveillance and extensive quarantines, but new variants such as Omicron have seen outbreaks intensify since the autumn.

China is determined to prevent any further Omicron outbreaks, especially as it prepares to host the Winter Olympics next month. It has recently imposed restrictions to maintain its zero-Covid target, with a lockdown in the central city of Xi’an, mandatory testing in Tianjin and parts of Zhongshan, Zhuhai and manufacturing hubs close to Hong Kong. And these are just the incidents that are known and get reported. There will undoubtedly be greater influence and impact, from the invisible actions taken.

Meanwhile restrictions have been eased in Ningbo, home to the world’s third largest container port, which has been in partial lockdown for most of the opening days of 2022, making entry and exit far easier for truck drivers heading to the port’s five container terminals.

Chinese ports are being impacted by regional lockdowns, with the situation varying widely from port to port and carriers changing vessel rotations at short notice, to avoid badly impacted gateways. This evolving situation raises the potential of even further disturbance, to already delayed shipping line schedules, from the main China base ports.

The situation may be exacerbated in the coming weeks, as China enters the build-up to many seasonal factory closures during Chinese New Year and Ningbo is still clearing backlogs, with many shipments having to be re-routed to Shanghai, to meet mother vessels.

Hapag-Lloyd is omitting Ningbo on two of its Asia-Mediterranean services and reinstating the Shanghai call, even though Shanghai is already severely congested, with most vessels already delayed by around one week. Very early, on their voyages into Europe.

Supply chains can usually cope with short-term lockdowns, but added shutdowns over a few weeks cause significant problems and with Covid, the lunar new year holiday and the Olympics all coming together, risks are multiplied and magnified.

After the initial virus outbreak spread from Wuhan over the lunar new year in 2020, the Chinese government blocked transport, preventing migrant workers who had travelled over the holiday period from returning to their jobs and factories shut for several weeks.

The latest restrictions have already impacted multinational organisations, with reports of Volkswagen and Toyota shutting their Tianjin plants last week and Xi’an chipmaker Samsung unable to get staff to work because of the lockdown.

And infections may spread further after Beijing reported its first locally transmitted case of Omicron, just weeks before the opening of the Winter Olympics in the capital.

Analysts fear that if infections spread, manufacturers would be as badly hit as they were two years ago, with few companies having their supply chains outside China, because these are strategic issues, which take a lot of time to stabilise.

Rather than moving production entirely out of China, some companies are trying to build second suppliers in China, while seeking alternative sources for components, but few of these initiatives will have progressed, as geographic diversification is often complex to get in place.

Supply chains have never faced so many challenges and with the situation in China being so fluid and changing rapidly, it is more critical than ever that you have the support of dependable partners.

Metro share the latest supply chain news and most important global developments, so that you are always informed about the best alternatives and options, to keep your supply chain optimised.

For further information and to discuss your ongoing requirements please contact Elliot Carlile, or your usual Metro account manager to discuss alternative routes to market and manufacturing facilities.