ContainersPorts and Logistics

Logistics giant DSV charters three MPPs amid super tight slot availability to launch Denmark – China route

The incredible tightness of available slots on almost all tradelanes has forced one of the world’s largest logistics operators to charter in small ships to move cargoes in December.

Danish logistics giant DSV has leased some containers and chartered three multipurpose (MPP) vessels capable of carrying 650 teu each to create a service linking Denmark with China this month.

Explaining just how significant the move is in terms of pricing today on the Asia – Europe tradelane, Lars Jensen from SeaIntelligence Consulting pointed out that most ships on this route tend to be 18,000+ teu in size to provide a sufficiently low operating cost.

“Hence the deployment of tiny 650 TEU vessels is a good indication that freight rates have reached levels where unusual alternatives now become viable. This might also be an indication that we are approaching a test of the upper limits of the spot rates charged by the carriers,” Jensen suggested via LinkedIn.

Online container booking platform Freightos noted yesterday the ongoing container shortage has pushed Asia-North Europe rates up 29% this week to to an “incredible” $3,470 per feu, marking a 64% increase over the past month, and a level 137% higher than this week last year.

Last year, DSV bought out Panalpina. It notched up revenues in excess of EUR12bn last year, making it one of the biggest players in the logistics market.

It is not just DSV that has resorted to seeking out MPP tonnage of late. Liners are also having to seek out MPP ships to cope with extraordinary demand and sky high rates across container shipping tradelanes.

“The dearth of cellular container tonnage in the charter market is forcing some carriers to tap into the multipurpose market to cover their needs, targeting ships with good speeds and high container intakes,” Alphaliner noted in a report last week.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

Comments

  1. Chartering three MPV ships is relatively easy (although they will have to be managed and re-positioned).
    However, allegedly there is an ongoing shortage of containers and yet DSV are able to pick up 3,000 x 40′ units (presumably not on short-term or spot leases?) just like that?
    If boxes are so easily available, why haven’t they already been leased to established operators?
    Does DSV understand what they are getting themselves into and the obligations they are taking on to control and manage a container fleet? Do they have their depot network and M&R and tracking already organised?
    Methinks DSV will soon realise that they have bitten off more than they can chew……..with resultant headaches to come.

    1. Nah.
      Its only to service a few VIP customers. They will know how and where and why. They will continue to support the carriers with their contracts. What they are doing, if doing it properly is relatively simple…

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