Air Freight News :

So far so good for IAG’s new Critical service.

·         IAG Cargo’s new Critical product is doing everything expected of it in service performance terms since its launch in early October, says the carrier’s global products manager, Daniel Johnson.

The service had handled around 110 individual shipments by the start of November, ranging from oil rig and ship parts to Formula One car tyres and even an urgent consignment of tuna from Mauritius to Los Angeles, via London, he said.

Critical shipments get the highest priority in accessing available cargo space, non-offloadable status, dedicated monitoring teams and, unlike the existing Prioritise premium product, there is no upper limit to consignment size beyond the capabilities of the aircraft used.

Prioritise is limited to 300 kg whereas Critical consignments could be up to about 10 tonnes.

Customers using the service at Heathrow and Madrid also have the use of a dedicated check-in desk and, in the event of stated transit times not being achieved, there would be a 50% refund on a case by case basis, said Johnson.

Air France KLM completes freighter restructuring but operating losses deepen.

·         Air France KLM saw its cargo division's operating performance worsen during the third quarter of the year, while its freighter fleet restructuring was completed.

The Franco-Dutch airline group recorded an operating loss of €100m during the third quarter of the year, compared with a loss on €81m during the same period in 2015.

Third quarter revenues were also down, slipping to €487m compared with €584m last year.

Financial performance was effected by “structural industry overcapacity” and traffic decreased by 6.4% to 2.1bn cargo revenue tonne km (RTK).

MAS Kargo launches Guangzhou freighter.

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Malaysia’s MAS Kargo has launched a twice weekly Airbus A330 freighter service to Guangzhou from its Kuala Lumpur hub in order to strengthen its footprint in eastern China.

The new service by the airfreight arm of Malaysia Airlines will call at Guangzhou every Tuesday and Thursday with 60 tonnes of cargo capacity per flight.

MAS Kargo said that the service will “tap the increasing cargo movements between Guangzhou Baiyun airport and Kuala Lumpur” with key exports that include perishables, predominantly seafood, as well as general airfreight.

News of the Guangzhou expansion comes just four days after MAS Kargo launched twice weekly A330 freighter services to Chongqing Jiangbei International Airport (CKG) in China, adding to its rapidly growing network of 23 dedicated cargo routes.

Sea Freight News :

Shipping Lines Riled by Pakistan’s Move to Raise Port Tariffs Bloomberg Shipping companies are threatening to scrap their Pakistan services after the South Asian country increased tariffs at its largest port in a blow to an industry that is already grappling with global overcapacity and low freight rates. Hyundai Merchant Marine Co. is “seriously considering” dropping deployment of larger vessels in Pakistan, the South Korean company wrote in a letter to the Karachi Port Trust, a copy of which was obtained by Bloomberg and confirmed by the firm. Local agents, representing global sea carriers including Maersk Line, the world’s biggest container carrier and part of A.P. Moeller-Maersk A/S, and American President Lines Ltd., say the tariff increase has caused distress among members. Charges at Karachi have more than doubled for many types of vessels, according to Pakistan Ship’s Agents Association, after the operator on Aug. 29 removed a cap on tariffs for vessels heavier than 45,000 gross registered tonnage.

Global trade may pick up slightly from fourth quarter: WTO New Indian Express Global trade is likely to start picking up from last quarter of this year on account of modest gains in export orders and container shipping, the WTO has said. WTO's World Trade Outlook Indicator has said that the “air freight in particular has shown quite strong recent growth, while export orders and container shipping have recorded more modest gains.” Pick up in the trade would have positive implications for India as the country's exports have started recovering. The outbound shipments grew by 4.62 per cent to USD 22.9 billion in September. Since December 2014, exports fell for the straight 18 months till May due to weak global demand and slide in oil prices. Shipments witnessed growth only in June this year thereafter again entered into negative zone in July and August. It said that with a current reading of 100.9 for the month of August, the WTO's indicator has risen above trend, signalling accelerating trade growth in November-December.

Nepal bound traffic expected to boost cargo traffic at Kalughat terminal at Patna Infra Circle India’s ministry of shipping—which plans to offer competitive cargo transport rates compared with rail and road from the yet-to-be operational Kalughat terminal on the National Waterways 1 on river Ganga at Patna—expects Nepal-bound traffic to generate huge volume. According to the ministry, the transportation tariff from the terminal may be 26% and 13% cheaper than rail and road traffic, respectively. To boost inland cargo movement, the shipping ministry and the Inland Waterways Authority of India (IWAI) have identified Kolkata’s GR Jetty-I, GR Jetty-II and the British India Steam Navigation (BISN), and Patna’s Gaighat and Kalughat terminals on river Ganga to be developed under the public-private-partnership (PPP) model. “According to a report prepared by our consultants, the GR Jetty II terminal (Kolkata) is expected to handle 7.21 million tonne (MT) of cargo by 2020 and 18.51 MT by 2045.

Private Kattupalli port aims to capture cargo from public rival Chennai JOC Adani Ports and Special Economic Zone, India’s biggest private port developer, is striving to replicate the success it’s had at its flagship Mundra Port with its new southeastern gateway of Kattupalli, which directly competes with state-owned Chennai Port. To add further momentum to Kattupalli’s strong growth trends, APSEZ last week hosted a public session in Ambur, Tamil Nadu State, to highlight the private terminal’s emergence as an alternative hub for shippers in the region. The meeting was attended by more than 50 representatives from cargo interests, shipping lines, freight forwarders, and leading manufacturers, including officials from the Indian Footwear Manufacturers Association, according to a company announcement. The action follows a similar APSEZ conference in Rajkot, Gujarat State, to showcase Mundra’s capabilities and expansion plans.

EOW starts probe into Rs 50cr sugar export scam Times of India The economic offences wing (EOW) of the city police has begun investigation into the alleged fraudulent export of two lakh tonnes of sugar by 21 sugar factories in the state. The fraud was initially estimated at around Rs 22 crore, but the police believe it may go up to Rs 50 crore. Principally, sugar was exported in 2007-08 at rates lower than market prices, but the transport company was paid at rates higher than that prevalent at the time. Around 200 accused have been listed, including the chairmen, managing directors and directors of the 21 factories in Kolhapur, Sangli, Satara, Ahmednagar, Solapur and Pune. An advocate, Govind Patil, had filed the case with the police. "The modus operandi was that over two lakh tonnes of sugar were sold to Kenya, Tanzania and Sri Lanka at a much lower price than the market rate in India. Moreover, the transportation fees given to M/s Shakti Credit Limited were much higher than market rates.

India one of the most cash intensive economies Live Mint The government’s demonetization move is likely to affect India’s growth in the short term as the informal sector, supported primarily through cash transactions, would slow down, cautioned a report by Deutsche Bank. India remains one of the most cash-intensive economies in the world, with currency/GDP at 12.2%, higher than Brazil, Mexico and South Africa, it said. The underlying growth momentum in manufacturing, trade, construction and transportation is already weak. These sectors constitute 73% of total informal employment in the economy and the demonetization move may see their growth slow further in the short term. Cargo traffic growth at major ports tops Feb high- Cargo handled at major ports grew by an impressive 13.2% in October, slightly above the high level of February, shows data from Emkay Global Financial Services Ltd. Petroleum, oil and iron ore trade saw healthy growth. The growth was partly aided by a favourable base.

Demonetization: With no cash on hand, 4 lakh trucks stranded on highways DNA Stating that around four lakh trucks are stranded in various parts of the country, the apex transporters body AIMTC demanded immediate increase in cash withdrawal limit from ATMs and banks to avoid crisis. All India Motor Transport Congress (AIMTC), claiming to have 93 lakh truckers, 50 lakh buses and tourist taxi and cab operators under its fold, said at least eight lakh drivers and conductors were severely impacted in the wake of delegalizing of Rs 500 and Rs 1,000 currency notes. "Our about 4 lakh trucks are stranded across India with about 8 lakh drivers and conductors severely hit. The sudden ban on higher denomination notes have made them stand in long queues before banks in different parts. The withdrawal limit is minuscule with ATMs at many places not working and paralysing the transport business," AIMTC president Bhim Wadhwa said.

Korea Line selected as preferred bidder for Hanjin's Asia - US business Seatrade Maritime KLC was selected as the preferred bidder for bankrupt Hanjin’s Asia to US business, Reuters reported citing a spokesman for the Seoul court overseeing Hanjin’s receivership. KLC is reported to have made a higher bid than HMM for the business, although the bid levels were not disclosed. Put up for tender last month Hanjin’s transpacific business comprises staff, five containerships and 10 overseas businesses, KLC itself filed for bankruptcy in January 2011, and currently does not have a presence in the container shipping space, unlike rival bidder HMM, which is now Korea’s largest container line following the collapse of Hanjin. KLC operates in the tanker, LNG and dry bulk sectors. Although Hanjin has until December to submit a restructuring plan to the Korean courts it is widely expected that the company will be liquidated.

The overweight on Dry Bulk is paying off handsomely Hellenic Shipping News We have earlier advocated that “ the normalisation process will lead to great opportunities even with incremental gains in the underlying markets as discount to Net Asset Values narrow. With the market bottoming out, we place our bets on the dry bulk names with high operating leverage and considerable exposure to the spot market. We expect the uptrend in freight rates to mirror in asset prices, which in turn, will have an amplified effect on stock prices. For existing players and asset markets, valuations have very little downside in our view. Bankruptcy risk which was being priced across stocks has significantly eased as key players raised equity and continue to restructure debt and balance sheets. We expect freight markets to recover gradually in the remaining months of the year as Chinese stimulus flows through the industrial economy, providing opportunities to add exposure to dry bulk on correction as we believe the worst is behind us.”

Alphaliner: Battle Lines on East-West Routes Being Drawn World Maritime News Although the new carrier alliances will only start operating from April 2017, battle lines on the main east-west routes are already being drawn, after the OCEAN Alliance and THE Alliance unveiled the respective service networks, according to Alphaliner. The OCEAN Alliance will start with an initial deployment of 331 ships with an aggregate capacity of 3.3 million TEUs. This figure is based on Alphaliner’s analysis of the 41 weekly services unveiled in early November by the four alliance members, comprising French shipping company CMA CGM (including APL), China’s COSCO Container Lines, Hong Kong-based Orient Overseas Container Line (OOCL) and Taiwanese Evergreen Line. Alphaliner said that “the carrier group is set to become the largest alliance in container shipping history,” with an initial plan to offer 20 weekly sailings from Asia to North America and 11 weekly sailings from Asia to Europe. OCEAN will also jointly operate three transatlantic strings and seven Far East – Middle East/Red Sea loops.

What is the future for small container ports? Port Economics As container ships grow ever larger to achieve greater economies of scale and hence cost savings, ports expand to be able to handle them. This expansion occurs both in terms of the physical size of berths and the speed and efficiency of handling the large drops of containers that must be moved in and out of the port gate and through the hinterland. Port systems evolve according to these trends, resulting in a concentration of container movements at a handful of hub ports within each range, and flows are then feedered to other ports according to a variety of schedules devised by carriers to balance their vessels and containers. Feeder ports generate enough cargo to require shipping services but not enough to require large vessels. They remain sufficiently distant from larger ports in the same range that under current market conditions the larger ports cannot serve this hinterland profitably overland.