Ocean Freight Rates from China to US Have Tripled Compared To Last Year
Due to current backlogs as a result of the pandemic, space on container ships from Asia to the US is extremely tight and rates have gone through the roof. Booking space is even more problematic and could easily take 4-6 weeks to get a booking. As a result of the high demand and tight space, eastbound transpacific ocean freight rates are now more than 3 times higher than the same period last year.
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Airbus Aims To Be First To Market With Zero-Emissions Aircraft
European aircraft manufacturer, Airbus, has developed several concept designs for zero-emission commercial aircraft powered by hydrogen. The concept designs are codenamed ZEROe. According to IATA, commercial aircraft produce up to 3 percent of worldwide carbon emissions. The industry has set ambitious goals to reduce the impact of commercial aviation on climate change such as a 50% reduction of carbon emissions by 2050. The zero-emission aircraft are likely to revolutionize the air transport industry.
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Aircraft Fuselages Are Shipped By Rail In An Unusual Combination Of Transport Modes
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A unique combination of transport modes was captured on video in a way you wouldn’t expect when Boeing 737 MAX aircraft fuselages were filmed during transport by rail through a narrow railroad tunnel. Although the video may seem to show something that can’t possibly be right, it is all too real.
The fuselages are manufactured by Spirit AeroSystems in Wichita, Kansas. Transporting such large pieces of equipment presents a challenge due to height and width limits for over-the-road transport. Due to their dimensions, they must be transported by rail without the wings attached, as the fuselages alone are too long to be transported over the road from the factory in Kansas to Boeing’s assembly facility in Washington State. The fuselages are meticulously prepped for shipment on railcars to ensure sufficient clearance through tunnels.
On June 4, 2020 Spirit AeroSystems was directed by Boeing to stop production on four 737 MAX shipsets and avoid starting production on sixteen more units for delivery in 2020 due to COVID-19’s impact on air travel in an effort to reduce unnecessary production costs. Spirit’s production was subsequently lowered from 125 units to 72 units for 2020. As of September 2020, CEO Tom Gentile said Spirit expects to be back to 10 aircraft per month on the 737 in January.
That is good news for Boeing, the passenger airline industry and the air cargo industry. Of course railroad executives will be very happy to resume shipments of this special cargo. The Boeing 737 MAX was grounded in March 2019 after two fatal crashes.
Read more about the ripple effect that the grounding of the 737 MAX created in combination with the challenges presented by the pandemic at:
Sky High Ocean Freight Rates From Asia Attract Government Scrutiny
Ocean carriers have been skipping sailings to shore up their bottom line during the virus-induced downturn in manufacturing and consumer demand. Tactical blank sailings combined with record breaking rate spikes in the trans-Pacific trade have increased carrier profitability now that manufacturing and demand are coming back online. Decreased capacity and increased rates are helping ocean carriers recover at the expense of the global economy while suppliers struggle to meet pent up consumer demand. Government regulators have begun to exert pressure on ocean carriers to restore capacity and restrict rate increases. It has been customary to blank sailings during the Chinese Golden Week holiday, however the threat of intervention will surely impact carrier cost manipulations and capacity decisions.
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(Photo credit: OOCL)
Drone Delivery System Aims to Make Mid-Size Retail Chains Competitive With E-Commerce Giants
Deuce Drone announced a test of their last mile delivery system which is intended to make delivery directly from stores to consumers faster and more affordable. Rouses Market, which operates 64 grocery stores in the south, has partnered with Deuce Drone to test a same day delivery system by drones in order to make last mile delivery faster and less costly than vans, so they can compete with Amazon.
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(Image courtesy of: Commercial Drone Professional of Deuce Drone)
New Drone System Developed For Long Distance Delivery
Civil drone operators are currently restricted to line-of-sight operation of one drone at a time to avoid collisions. Satellite operator, Inmarsat Group Holdings, has partnered with Altitude Angel LTD to operate drones over long distances safely by integrating a backup satellite connection for areas with no land-based communications . If they can prove safe operation to regulators, fleets of remotely operated drones could be deployed to transport tons of goods. Read more about this development at:
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(Photo Credit: Chip Chipman/Bloomberg News)
Spot Rates Quoted By Shipping Lines Are Often Lower Than Service Contract Rates
Given the increased efficiencies achieved through digital freight platforms, dynamic pricing in the spot rate market often yields lower rates than service contracts. Contract rates are agreements between a shipper and a carrier in which a shipper commits to a large annual volume of containers in order to benefit from a lower rate than that offered to the general public.
Read more on JOC.
Container Rates for Trans-Pacific Freight From the US to Asia Hit Rock Bottom
The imbalance of trade between Asia and the US keeps trans-Pacific westbound freight rates lower than eastbound rates. Most ships arriving from Asia to the US are heavily booked, while the return voyages are booked at less than 40% capacity. The imbalance is compounded by the current trade war. The strong dollar and retaliatory tariffs from China have made exporting from the US more costly. Further downward pressure on rates is caused by a larger volume of low value commodities like scrap materials being exported to Asia, while finished consumer goods imported to the US command higher freight rates. To learn more about the reasons for lower westbound freight rates, read here.
Oversize Project Cargo Transported Via Seasonal River Route To Reach Otherwise Inaccessible Remote Destination
Huge pieces of cargo for a gas processing plant in Russia are being transported using custom designed multi-modal methods and custom designed lifting equipment. Transport from the ocean port of discharge to the inland destination involves a fleet of barges, tug boats, shallow draft pontoons and purpose built cranes. The river journey requires 21 days to navigate over 1400 miles of shallow waters. It will take 5 seasons to transport all 176,000 tons of oversize equipment needed as the river is only accessible several months each year.
Read more about this oversize cargo project at: JOC
Case Study – Railway Tram Systems Transport and Installation
International transport of railway tram systems presents a unique set of challenges. These oversize rail cars require special handling to move safely from factory to destination. The process involves engineering the trams with lifting points for safe hoisting by cranes, performing inland route surveys, securing ocean carrier and port approvals, custom design and sourcing of spreader bar assemblies, overseeing crane operations at inland origin and destination points, managing loading and lashing at ports of loading and on board ships, as well as securing on mafi platforms and drop deck trailers. Marine engineers are hired to survey the entire process and ensure the units are safely lifted and secured for transport. Overseas Brokers has managed turnkey projects from factories in the US and Europe to multiple destinations in the Middle East and Caribbean including transport, heavy lift operations and installation onto the tracks for entire tram systems, as well as railway track laydown and ongoing supply of equipment for system maintenance .
To see video of a modern tram arrival by ship, it’s journey from the port to the track and a test run, click here: https://www.youtube.com/watch?v=6AOk5BQpZbg
To read more about double decker and single deck open tram systems we handled, click on the following links:
https://www.visitaruba.com/getting-around/streetcar-trolley/ ; https://en.wikipedia.org/wiki/Trams_in_Oranjestad