The insurance industry’s Joint War Committee (JWC) said in an advisory dated March 7 that the high-risk area had been widened to waters close to Romania and Georgia after initially adding Russian and Ukrainian waters in the Black Sea and Sea of Azov on Feb. 15.

At least five commercial ships have been hit by projectiles since Feb. 24, including one vessel that sank and another on which a seafarer was killed by a missile that struck the ship. Read full story

The new high-risk areas also extend to various inland waters and sections of the high seas, underscoring the increasing dangers.

“There is clearly a growing nervousness around the region in the insurance market, especially in relation to the Black Sea,” said Marcus Baker at insurance broker and risk adviser Marsh.

“Any future amendments to these areas will very much depend upon a further escalation of activity in the region.”

Insurance premiums for voyages in the region have soared since Russia’s invasion on Feb. 24, an action Moscow calls a “special operation”.

Many shipping companies have suspended sailings to affected ports and the United Nations’ shipping agency will convene a special meeting this week to discuss the worsening situation.

Guidance from the JWC is watched closely and influences underwriters’ considerations over insurance premiums.

The JWC advisory pointed to three ships that had been hit around the Ukrainian port of Odessa, adding that the situation is “dynamic” and being monitored closely.

The listed areas will be readjusted if the JWC believes it appropriate, the guidance said.

The JWC normally meets every quarter to review areas it considers high risk for merchant vessels and prone to war, piracy, terrorism and related perils. It had previously met in February before Russia’s invasion.

Niels Rasmussen, chief shipping analyst at trade association BIMCO, said there was a higher risk of Black Sea export disruption owing to shipping companies’ reluctance to service the area and because of increasing freight costs.

“Of particular concern to global supply is the export of wheat and maize, which is mainly loaded in the Black Sea (region).”

Source: www.marinelinks.com

Image: www.pixibay.com

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Companies across industries are attempting to meet the moment and replace legacy supply chain practices with more dynamic tactics to prepare for the next wave of volatility. But few organizations know where to start.

To truly become resilient in the new normal, enterprises have to develop bold strategies that holistically identify gaps and prioritize intelligent supply chain solutions. In doing so, leaders can ensure their supply chains are reactive to sudden changes and proactive before a disruption even hits, saving both time and money.

Here are three tactics to get started on the road to supply chain resiliency.

Similarly, machine learning capabilities will be central to maintain agile supply chains, identifying data anomalies that trigger demand fluctuations and signals.

Although overhauling supply chains may seem like a monumental task, enterprises can begin to chip away at their digital transformation agendas if they are properly managed. To do so, organizations must implement short proofs of concept and strong organizational change management practices. By running the broader adoption program in incremental steps, companies can better launch each new offering and thus quickly gain value once it’s adopted at scale.

2. Join the shared-based economy. Many leaders are turning to contractual supply chain collaborations to bolster weakened supply chains. By utilizing web-based planning tools and sharing certain components of their infrastructures among an organized network of partners, companies can shoulder each other’s burdens and provide needed reprieve in their given issue areas—whether manufacturing, logistics, or transportation. This requires leaders to carefully identify core competencies and gaps before selecting partners.

Alternatively, leaders can look to mergers and acquisitions to expand their core competencies and fill their gaps. Unlike partnerships though, M&A deals are definitive and thus require a more detailed vetting process. Both partnerships and M&A deals allow companies to share capabilities and bolster supply chains.

3. Operationalize supply chain sustainability. In recent years, both the public and private sectors have increasingly prioritized sustainability initiatives. Consumer product goods companies have led the private sector’s adoption of greener practices, and the business world has taken note.

Organizations across industries would be wise to turn to environmental best practices to fortify their supply chains. By introducing green tactics into their supply chain strategies enterprises can become more resilient in the highly disruptive new normal.

Organizations should also revamp their overarching supply chain strategies to emphasize more agile, sustainable planning. For instance, supply chain planning measures that utilize algorithms to prioritize better transportation routes or manufacturing operations can help lower carbon emissions while also optimizing supply chain operations.

Though it may mean more time or money spent in the short term, organizations will reap the rewards of resilient supply chain management in the long term.

Source: www.inboundlogistics.com

Author: Pierre Erasmus, Integrated Business Planning Lead, Capgemini Americas

Image:

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The new technology combines Nagasaki University’s tidal current power generation technology with Kyocera’s IoT technology to collect reliable ocean data.

Prototype buoys can collect a wide range of data on the marine environment using self-generated energy. A pilot program gathered information from 21 sensors, monitoring everything from water temperature and humidity to current direction. Future development may include sensors for temperature-related salinity variation, chlorophyll turbidity, and temperature related variations in dissolved oxygen concentrations, to name a few.

Marine pollution and climate change have become serious societal issues. To solve these issues and help create a more sustainable world, scientists need more reliable ways to monitor and visualize various sea conditions. However, maintaining a stable power supply is a big challenge for continuous data collection at sea. Therefore, Nagasaki University and Kyocera developed the “Energy Harvesting Smart Buoy,” which generates its own electric power for continuous ocean data collection using a tidal-current power generation system in the buoy.

The new Smart Buoy combines tidal-current power generation technology from Nagasaki University and IoT-related technology from Kyocera. In addition, Kyocera has future plans to monitor fisheries and aquaculture, conduct ocean surveys, and more.

Each prototype is equipped with two different tidal-current power generation systems:

SLTT (Small Lens-type Tidal Turbines) – The buoy and power generation are separate, and a diffuser is installed around the turbine. In addition to protecting the turbine, the diffuser has the effect of increasing the flow of water for better power generation.

VTT (Vertical-axis Tidal Turbines) – The power generation element is directly connected to the buoy. Its AI-guided design incorporates a tilted axis to optimize turbine rotation amid heavy ocean swells and waves.

Source: www.maritimejournal.com

Image: www.maritimejournal.com

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Staff shortages and congestion

Rapid changes in consumer behavior hit retailers unprepared, and when the economy stalled in the first half of 2020, retail sales fell, and inventories rose. Ocean carriers shipped more and more ships from China to the ports of Los Angeles / Long Beach, and incoming volumes have been huge. The situation was further complicated by the fact that a significant number of truck drivers were infected with Covid-19 and had to go into isolation, slowing down the movement of the containers and leaving them overcrowded. For example, since November 2020, between 20 and 40 container vessels have been continuously anchored near the ports of the Gulf of San Pedro, waiting up to 10 days to call at the port. The lack of staff only makes the situation worse.

The influence of the “Chinese factor”

Several studies suggest that the “China factor” should also be taken into account: production activity in China began to decline in the first quarter of 2020 due to the pandemic, and there were many cancellations of container vessels due to a lack of products from closed factories. The shortage of Chinese-produced raw materials, which is critical to production processes in the US, Japan and Korea, has had a negative impact on the global supply chain as a whole.

The demand of the importers

Already in the fourth quarter of 2020, Chinese production capacity reached its highest level in five years, but there is still an insufficient number of orders. US production capacity has still not recovered from pre-pandemic levels due to difficulties in attracting labor and a lack of various imported components. U.S. retailers are trying to meet demand and rebuild inventory. Ocean carriers have begun shifting more ships to alternative US ports, such as Auckland, Seattle-Tacoma, Savannah and Charleston. They have increased shipping rates in terms of spare capacity, but this has not deterred importers who are desperate to meet demand.

Historically the highest point for rail carriers

Experts estimate that the demand for more expensive air transport could increase, as transport trends have exacerbated the problem of container congestion in ports. The increase in the volume of ports in the second half of 2020 is also reflected in the volume of railways. Railway traffic exceeded the level of 2019 and reached a historically high level. Since August 2020, some railway lines have applied surcharges, sometimes as much as 100% of the base rate.

Inability to react to sharp fluctuations

The pandemic has forced the global transport sector to cope with highly volatile trade flows. Ocean carriers shall take all practicable steps to improve the speed and efficiency of cargo traffic, including the use of the capacity of all available vessels. When demand fell by around 20% to 30% in the second quarter of 2020, carriers restricted services and a number of ships were idle. However, as cargo volumes increased, carriers were unable to adapt quickly enough.

Author: Roland Peterson, logistics expert

Image: www.pexels.com

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CMA CGM Air Cargo’s first Airbus A330-200F will begin regular commercial operations from Liege, Belgium, to Chicago, United States. It will be joined on March 16 by a second Airbus A330-200F that will also serve the U.S. market, doubling the total offered capacity.

Liege airport will be the strategic base for its operations and Air Belgium has been chosen to operate the aircraft in CMA CGM Air Cargo’s fleet.ECS Group, a leading GSA, will be in charge of marketing CMA CGM Air Cargo’s services. A blocked space agreement on board its aircraft has been agreed with CMA CGM subsidiary CEVA Logistics.

Xavier Eiglier, Director of CMA CGM Air Cargo, commented: “The launch of CMA CGM AIR CARGO represents a significant event in developing a comprehensive range of logistics services for the CMA CGM Group’s clients. These initial destinations in the United States demonstrate our desire to offer our clients international coverage, serving the biggest freight airports in the heart of major economic areas.”

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Image by Sasin Tipchai from Pixabay

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The space and vessel shortages are mainly for trade with Australia, Europe, the US and Japan, said Malaysian National Shippers Council (MNSC) chairman Datuk Dr Ir Andy Seo.

“Concerns have been raised that the shortages will further peak once companies in China go back to full operations after the Chinese New Year.

“This issue is further exacerbated as shippers are also hit with skyrocketing freight rates and port congestion, especially in Port Klang,” he told The Malaysian Reserve (TMR).

Based on feedback received from shippers, freight rates are now much higher between US$6,000 and US$10,000 (RM40,500) per container compared to US$55-US$300 per container before the pandemic.

Seo said shippers face difficult decisions daily on whether to ship and incur high export costs or not to ship and lose their export markets.

He stressed that the high freight rates are also forcing foreign buyers to delay their orders, hoping that the shipment costs will decrease in coming months, thus shippers are losing out on export revenue.

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“The port congestions and terminal disruptions in Port Klang are not just caused by ports trying to funnel large numbers of containers through their gateways, but also due to inadequate port equipment and bottlenecks faced in Customs clearance for import shipments requiring inspections by other government agencies (OGAs).

“The port congestion has led to significant shipment delays of between two and three weeks which has caused a ripple effect throughout the supply chain and it will eventually impact the businesses and consumers worldwide,” he added.

Following MNSC’s discussion with the Ministry of Transport and respective government agencies held on Dec 28, 2020, it was agreed that more coordinated efforts are needed among all stakeholders to address the port congestion issues at least within the control of Malaysian authorities and the private sector.

“We note that efforts have been undertaken by various parties, which include the establishment of a task force comprising Royal Malaysian Customs and OGAs with Westports Holdings Bhd and Northport (M) Bhd to facilitate and expedite the inspection of containers, and both terminals are working to increase port equipment, systems and facilities to cater to the high volume of containers.

“However, we urge the government to expedite these improvements to ensure a more coordinated and cohesive effort is carried out to enable faster turnaround of container clearance at the ports,” he said.

Seo said there are no winners from port congestion and transport logistics networks are being impacted by it.

“The biggest losers, while these issues continue, will be importers and exporters, cargo owners and, ultimately, end-users.

“Therefore, MNSC calls on the government’s support to assist shippers during this critical time, especially by providing more tax incentives such as tax rebates, double tax deductions and to expand the temporary relief offered under the Market Development Grant for the reimbursement of logistic costs related to exports to include reimbursement claims for import shipments,” he said.

Meanwhile, Malaysia Shipowners’ Association (MASA) chairman Datuk Ir Abdul Hak Md Amin said Covid-19 infected the shipping crews that led to the loss of sailings and schedule punctuality.

“The infected crew needs to be replaced by another certified person. You need only one crew to get infected, and this will lead to between 10 and 14 days of downtime. In the end, the cargo delivery was delayed.

“Not to mention the additional cost that shipping companies need to bear. These were more significant to container shipping where ‘punctuality and as per published schedule’ is the name of the game,” he told TMR.

He said the port operation efficiency and port productivity were negatively affected, creating serious port congestion for ships waiting to berth up to between five and six days, as well as container yard congestion.

“As a result, domestic containers again suffered from loss of sailings and liner schedule punctuality was upside down.

“The domestic containers turnaround days were lengthened as the East Malaysian consignees needed extra days to clear their cargo, resulting in a longer container turnaround time and certain carriers experiencing temporary container shortage at the major load ports like Port Klang and Penang,” he explained.

Unlike the long-haul container shipping freight, the domestics trade freight level remains largely the same because most of the domestics container shipping lines are dedicated Malaysia-based containers operators, and their containers are circulating between East and West Malaysia ports only.

“It’s time for the policymaker to rethink to reinstate the cabotage policy. Imagine if there are no dedicated domestic container shipping lines around, surely the local exporters and importers will have to pay exorbitant freight charges and there is also a strong likelihood the East Malaysia supply chain would be at risk,” Abdul Hak said.

It is likely these challenges due to the pandemic faced by MASA members may persist until the second half of 2021, unless the herd immunity can be achieved earlier, he added.

MASA also urged the government to consider local seafarers, port officers, cargo surveyors, shipping agents, mooring gangs, pilots and classification surveyors to be vaccinated first as marine transportation services are classified by Malaysian law as essential services

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With a 60-tonne-payload and a range of 4,000 nautical miles, the aircraft will connect Europe with the rest of the world. The fleet operation will be contracted to a European airline.

The expansion into air cargo is a new milestone in CMA CGM’s strategic development, with the aim of providing a range of services covering both shipping and logistics.

Rodolphe Saadé, chairman and CEO, CMA CGM Group, commented:”In response to the growing demand from our customers for agile logistics solutions, we are creating a new division within the CMA CGM Group dedicated to air transport: CMA CGM Air Cargo.

“This division will launch with four Airbus A330-200F aircraft and will leverage commercial partnerships with airlines in order to deliver global coverage. This is a major milestone in the development of our logistics services.”

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Photo by G-R Mottez on Unsplash

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Once completed, the ports will operate under the name ‘Port of Antwerp-Bruges’. As a result of the merger, the ports will be able to strengthen their position within the global supply chain and continue their course towards sustainable growth.

Furthermore, the unified port will be more resilient to the challenges of the future and will take a lead in the transition towards a low-carbon economy. The ambition is for Port of Antwerp-Bruges to become the world’s first port to reconcile economy, people and climate.

The shared position of the ports of Antwerp and Zeebrugge within the global supply chain will receive a significant boost. The merged port will become the most important container port (157 million tonnes/year), one of the largest break bulk ports and the largest port for the throughput of vehicles in Europe.

Furthermore, the port will account for more than 15% of Europe’s liquid natural gas transited and it will of course remain Europe’s most important chemical hub. Finally, it will be the largest port for cruise ships in the Benelux. With a total throughput of 278 million tonnes per year, the unified port will be able to consolidate its leading position in the world.

Unifying a port is more than a story of tonnes and volumes. The ambition is to become the world’s first port that reconciles economy, people and climate. The unification project is all about creating added value for the surrounding areas of Antwerp and Zeebrugge, for customers and stakeholders, as well as for the rest of Flanders. As part of a joint plan, the two ports have defined three strategic priorities – sustainable growth, resilience and leadership in the energy and digital transition.

Port of Antwerp-Bruges will combine the best of both worlds and will focus on the strengths of each site. The ports of Antwerp and Zeebrugge are largely complementary. For example, Antwerp specialises in the handling and storage of containers, break bulk and chemical products, while Zeebrugge is a major port for RoRo traffic, container handling and the transhipment of liquid natural gas. Working more closely together will make it possible to consolidate sustainable growth, not only of each port’s individual market share, but also of the joint market share of both ports together.

In order to maximise the added value of a unified port, Port of Antwerp-Bruges will seek to develop and make optimum use of the interconnectivity between the two ports. The transportation of goods by rail between the two sites will be bundled, estuary traffic (by inland vessels on the North Sea) will be optimised and pipeline connections will also be on the list of priorities.

Committed strategic investments, such as the new sea lock in Zeebrugge and the additional container capacity in Antwerp, will go ahead. Future investments will be evaluated from a unified operational perspective, so that both port platforms will benefit, and the port continues to meet its customers’ expectations.

By joining forces, the ports of Antwerp and Zeebrugge will be more resilient to the challenges of the future. That resilience is essential to secure the prosperity and well-being of our society and the future of our economy.

Port of Antwerp-Bruges will draw upon the resources, expertise and talent of its teams in Zeebrugge and Antwerp. In the near future, a unified organisational structure and way of working will be developed, while respecting one another’s DNA and corporate culture. Transparent, long-term agreements will be made with regard to the leadership and management of Port of Antwerp-Bruges.

The port intends to identify as many synergies as possible, to continue to build on the extensive support within society for this driver of Flanders’ economy and to reinforce its position as a logistical, maritime and industrial centre. Not only within Flanders and Belgium, but on a European level and worldwide.

The unified port will be able to respond more rapidly and more effectively to social and technological developments, such as energy transition, innovation and digitalisation.

Sustainability already formed a central part of the strategic direction in Antwerp and in Zeebrugge, but Port of Antwerp-Bruges will set the bar higher. Combining the industrial cluster in Antwerp and Zeebrugge’s location on the coast will create a unique opportunity to address the future energy challenges in Flanders and the wider region. As such, Port of Antwerp-Bruges will take up a leading position as an import hub for green hydrogen and will play an active and pioneering role in the hydrogen economy.

In addition, the port, in collaboration with its industrial and maritime customers, will continue its efforts to reduce its carbon footprint and will examine methods of applying CCUS (Carbon Capture, Utilisation & Storage) in order to contribute to the transition towards a low-carbon port.

Finally, Port of Antwerp-Bruges will offer a number of significant advantages in terms of innovation and digitalisation, making it possible to make the supply chain not only more efficient, but also safer and more reliable.

The transaction is subject to a number of customary suspensive conditions, including approval from the Belgian Competition Authorities. Both parties aim to finalise the transaction in the course of 2021.

Annick De Ridder, port alderman and chair of the board of directors of the Antwerp Port Authority, commented: “We are proud of this historic agreement, which seals a long-awaited unification. By joining forces, we are on the way to becoming Europe’s global port, while at the same time reinforcing our position as the most important container port in terms of tonnage, a solid RoRo port and one of the largest break bulk ports in Europe. This will make us even more attractive to our existing customers, to new investors and to all other potential stakeholders, and we will undisputedly be the main driver of Flanders’ economy.

“Our ambition to bring the two ports together is about much more than simply tonnage and TEUs, however. It will enable us to focus even more firmly on the transition towards a low-carbon economy and to continue our efforts regarding the digitalisation of the supply chain. The ports of Zeebrugge and Antwerp are to a large extent complementary and working together will make us more resilient to external challenges.”

Dirk De fauw, mayor of Bruges and chair of Zeebrugge Port Authority, added: “We are looking forward to join forces with the port of Antwerp and, by doing so, to strengthen our position as the most important gateway to Europe. Zeebrugge is the world’s largest automotive hub, a leading RoRo port and an experienced, state-of-the-art natural gas hub.

“By combining our own strengths with the qualities offered by Antwerp, we will be able to do more and do it better. We will achieve this in the interests of and in consideration of our shared port operations, our city and our region. We will strengthen our joint economic and international position, while simultaneously creating added value for society in general.”

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