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Feb.8, 2016

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WEAK PRE-LUNAR NEW YEAR SHIPPING DEMAND OFFERS LITTLE HOPE FOR REST OF 2016 WITH LITTLE EVIDENCE in late January of the traditional surge in cargo exports from China to Europe and the United States before the long Chinese New Year holiday, container lines might not even get a bump before over- capacity takes its toll for the rest of the year. A 50 percent drop in bunker prices in the past year is a welcome gift for container lines strug- gling in an oversupplied market, but even as cheaper fuel allows the carriers to cut oper- ating costs, it will do nothing to address the surplus capacity that is severely undermin- ing profitability.The only real antidote is for demand to increase, but the chances of that seems to diminish with each new report. The International Monetary Fund has down- graded its forecast for global economic growth and expects economic activity to increase 3.4 percent this year followed by 3.6 percent in 2017. This would translate into container growth of 3.5 to 4 percent this year, according to Peter Sand, chief shipping analyst at carrier assoiciation BIMCO. Container lines aren't shying away from the dismal outlook ahead. China Shipping Container Lines on Jan. 25 warned investors that it will make a 2015 net loss of $430 million on the back of record low freight rates and vessel impairment losses. ANXIETY INTENSIFIES OVER CONTAINER WEIGHTS INDUSTRY CONCERN IS growing over how the global container mandate, set to take effect in July, will actually be implemented. When a con- tainer without a signed weight declaration shows up at a marine terminal on July 1, when the new SOLAS rule takes effect, what will happen? Will the terminal allow the container in, hoping the weight information will arrive in time for the container to be handled and loaded on to a ship without having to be pulled aside? Or does the terminal avoid the risk, telling the carrier and its customer that containers without the Veri- fied Gross Mass won't be allowed in under any circumstances? That and many other unresolved issues are raising anxiety levels among shippers, carriers and terminals as the implementation date is just a few months away. U.S. exporters say the amendment to the SOLAS convention requiring shippers to provide a signed, certi - fied weight to the ocean carrier and terminal is unworkable. They are asking how a shipper can be held responsible for the weight of a container whose tare weight, or unloaded weight, may be inaccurate, especially if the shipper never sees the container in those cases where it's loaded at a transload facility, possibly thousands of miles away from the exporter's point of origin. "It's a fiasco," said Peter Friedmann, executive direc- tor of the Agriculture Transportation Coalition, a g roup representing some 2,000 shippers. "Everyone who knows about how cargo moves from the origin and onto a ship knows that this thing is absolutely unworkable and will create unbelievable congestion unless minds who are familiar with how cargo moves are allowed to intercede." ACE ROLLOUT SPARKS INDUSTRY WARNINGS U.S. CUSTOMS BROKERS and forwarders are asking the U.S. Customs and Border Protec- tion to halt all software changes tied to a sys- tem aimed at streamlining the filing of import and export documentation just weeks before it's set to take effect, saying the Automated Commercia l Env ironment, or single w in- dow, isn't ready. The warning from the National Customs Brokers and Forwarders Associa- tion of A merica is the latest sig n that the rollout of ACE might not be smooth. The pro- gram — already more than $1 billion over bud- get and three years overdue — was initially supposed to come online in November, but Customs pushed back the timeline. "We have said that live testing of software by importers and exporters, by brokers and forwarders, by software providers, and by CBP jointly, with - out any further changes whatsoever, demand a minimum of 60 days," the NCBFAA wrote in a Jan. 8 letter to the agency. "Customs now says that its work is complete; the facts, however, suggest otherwise." The NCBFAA is concerned that because the single window is being updated constantly, with some changes slated to be intro- duced on the transition date of Feb. 28, shipper software won't be able to handle some changes, which could result in bugs and other technical problems that may delay shipments and create Spotlight 6 THE JOURNAL OF COMMERCE FEBRUARY 8.2016 6 THE JOURNAL OF COMMERCE

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