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China’s monthly containerised exports index increased 0.4% month on month in May to 952.11 points. The highest increase was to South America, with a 17% increase in volumes, followed by volumes to the MEG, which were up 8.5% month-on-month. The overall index remains below the 1,000 point benchmark set as far back as January 1, 1998. Dwell times for containers at Chinese ports have fallen again, hitting 4.8 days for exports and 5.2 days for imports, according to data from consultancy Four Kites, which also notes a 44% decline in the volume of shipments to the US from China between April 2022 and April 2023, along with falling transit times. These reflect higher sailing speeds, though these could reverse as liners manage operating costs. Four Kites says that shippers have more options than previously when it comes to supply chains: “Shippers are weighing their options and determining what their inbound networks need to look like, including where global supply should come from.” In other words, the policy of de-linking some supply chain from China to build resilience in the light of the pandemic and geopolitical tensions is bearing fruit. The expectation is that container volumes will rise in the second half of the year, but that rather depends on what happens with interest rates and housing costs in the core import markets of North America and Europe, where disposable incomes have been straitened by higher interest servicing costs and inflation in core items like food, energy and fuel. The problem with this expectation is that over the last five years it is the middle months of the year - May to August – in which container volumes have been strongest. Analysts at research firm Shipping Strategy suggest that this could be down to changing inventory strategies as retailers look to reduce spikes in spot shipping rates in the final quarter of the year by spreading deliveries earlier in the year and bearing slightly higher stock day costs in their own warehouses. The out-turn of these evens is a still-falling container freight market. The Freightos Baltic Global Container Index stood at 1,297 points on June 23, down 10% month-on-month and 7% on the previous week. On the transpacific trade, the eastbound rate from Asia to the west coast of North America, was rated on June 23 at $1,209 per feu and $2,298 to the US east coast. These numbers were down 9% and 2% since June 1. On the Asia-Europe routes via Suez, rates per feu to North Europe were reported at $1,266 on June 23, down 4% on the rate four weeks earlier. Rates to the Mediterranean were $2,217, down 7% over four weeks. In the Atlantic, rates on the westbound route from North Europe to the US were reported as being $2,082 on June 23, unchanged for three weeks and barely down on the $2,088 at the start of the month. On the backhaul, liner operators have their first piece of good news this month. Rates are up 5% on the week and up 31% on the month, standing at $516 as of June 23 compared to $356 at the start of the month. Is the weaker dollar making imports to the US harder but exports from the US easier? We will monitor the trend and report back. The large liner orderbook is common knowledge, as is the rationale behind the newbuildings – a majority have been specified with dual-fuel or low-emission fuel engines to reduce carbon emissions and costs especially for ships sailing into Europe. It was a surprise then to discover that Bearing, a Silicon Valley artificial intelligence company backed by Mitsui, has found that a higher proportion of containerships than oil tankers will score below a C on the Carbon Intensity Indicator. This comes down to sailing speeds – liners still operate in the mid-teens of knots. This may be cut to the lowest possible safe speed. That would reduce fuel spend, cut emissions and reduce teu-days supply, which could have positive effects on freight rates. The CII is going to disrupt markets in ways that remain unclear – we should perhaps expect the unexpected.

CII could be box saviour

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