The Saudi Ports Authority (Mawani) has announced the addition of the India Gulf Express freight service, operated by the French container carrier CMA CGM, to King Abdulaziz Port.

This strategic move aims to further strengthen Saudi Arabia's maritime links and enhance the Kingdom's position as a leading logistics and economic powerhouse.

This direct route will link Dammam with seven major maritime hubs: Nhava Sheva, Mundra, Mangalore, Colombo, Jebel Ali, Khalifa, and Umm Qasr. Weekly sailings will be conducted using a fleet of four vessels, each with a capacity of up to 9,800 TEUs.

The new rotation is expected to amplify the trade capacity, competitiveness, and connectivity of the globally renowned King Abdulaziz Port, as well as the Kingdom as a whole.

The goal is to provide faster transit times and more cost-effective solutions for local exporters, aligning with Vision 2030's objective of establishing Saudi Arabia as a leading logistics and economic powerhouse.

The introduction of the India Gulf Express service marks the 25th addition to the Kingdom's rapidly expanding network of maritime links by Mawani since the start of the year.

This effort has contributed to the country's score of 77.66 points in the UNCTAD's Liner Shipping Connectivity Index (LSCI) during Q3, marking an increase from Q2's score of 76.16 points."

Sentiment for rates on long-haul routes has turned positive for the first time since August. Vessel utilisation has been beyond expectations and Maersk has had to deploy extra loader services.

THE Alliance’s withdrawal of the EC4 US East Coast service in November will also help to reduce oversupply on the lane. On the Asia-Europe side, FAK rate hikes have helped push rates up, supported by capacity cuts.

The Shanghai Containerised Freight Index (SCFI) showed that Shanghai-US West Coast rates closed at US$1,746/FEU, up from US$1,735/FEU the week before. However, the Shanghai-US East Coast rate remained under pressure, dropping to US$2,198/FEU, from US$2,230/FEU the previous week.

Shanghai-Northern Europe rates also grew to US$581/TEU, from US$562/TEU the previous week.

Consultancy Linerlytica remarked in its report on 23 October, “Market sentiment has turned positive for the first time since August, with momentum building for the November freight rate hikes as further capacity cuts are forthcoming after THE Alliance decided belatedly to suspend the EC4 service to the US East Coast via the Suez in November. This follows earlier cuts made by various carriers on the USWC and Europe routes that have helped to elevate carriers’ rate restoration efforts.”

Despite the more bullish sentiment, Linerlytica stressed that the sustainability of the increased rates depends on liner operators’ capacity discipline.

Linerlytica’s statistics show that the idle fleet has dropped slightly in the past week, with only 67 units of 265,591 TEU currently inactive, with several idle units already resuming active service, while four ships were scrapped in the past week.

Linerlytica said, “At least 1 million TEU of excess capacity that needs to be removed over the next two months in order for the rates to stick. The task will be made more difficult by the over 500,000 TEU of new deliveries scheduled to be delivered before the end of the year, which will require more ships to be idled upon delivery.”

Capacity at shipyards remains steady with just over 200 units for 834,784 TEU currently in drydock. Several owners are making use of the current market slowdown to upgrade their fleet with Maersk, Mediterranean Shipping Company and Hapag-Lloyd all undertaking vessel upgrading programs.

Linerlytica said, “The recent rise of ships in drydock has helped to remove some of the excess capacity but it also means that more refurbished ships will be returning to the market next year even as scrapping rates remain stubbornly low.”

Inditex, parent company of fashion brands such as Zara and Massimo Dutti, has partnered with Maersk to reduce its global greenhouse gas (GHG) footprint from seaborne logistics by incorporating alternative fuels.

Through the ECO Delivery Ocean programme, Maersk replaces fossil fuels on its ships with green fuels, like green methanol or second generation biodiesel based on waste feedstocks. This is expected to deliver an estimated reduction of more than 80% in GHG emissions compared to conventional sources. according to Maersk's calculations.

With ECO Delivery Ocean, Maersk offers its customers the opportunity to handle transports completely with certified green fuels for a fixed cost. The corresponding greenhouse gas savings are confirmed to the customers with an externally verified certificate and these transports will be exempted from EU Emissions Trading System (ETS) charges by Maersk in the future.

"This collaboration is a great example of how boosting innovative solutions with dedicated partners is key to fight climate change. Through this joint initiative with Maersk, we are making significant strides in reducing emissions associated with our sea freight. This project aligns with our goal to reach net zero emissions in 2040 and contributes to scale alternative fuels with a significant reduced carbon footprint," commented Abel Lopez, Head of Import, Export and Transport at Inditex.

Like Inditex, Maersk has the ambitious climate target to become a net zero company across all business areas until 2040. Besides using ECO Delivery for all its ocean cargo under Maersk care, Inditex is also boosting multimodal transport and is collaborating in a new rail solution pilot of Maersk, RENFE and Cepsa in the South of Spain which was launched this summer.

"We are proud to have Inditex among our first customers who assign 100% of their Maersk ocean inbound cargo to our ECO Delivery product, which ensures a significant reduction of GHG emissions thanks to green fuels. We have known Inditex for a long as a very responsibly and sustainably thinking partner and customer and going all the way on their ocean cargo is good news for the environment and climate," said Emilio de la Cruz, Managing Director of Maersk’s Area South West Europe.

Rates on the two major trades to Europe and the United States continued to slide even as workers begin their slow return to factories in China following the Golden Week holidays.

Last week’s shutdown of production in China included the Shanghai Container Freight Index (SCFI) which will resume publishing its rates this week with the headhaul Pacific rates already US$200/FEU below the last SCFI value.

Spot freight rates to Europe were set at a pre-Golden Week level of US$1,166/FEU but are now said to have crashed to under US$800/FEU.

Carriers have announced rate rises on both major trades, US$1,000/FEU on 15 October and 1 November on the Pacific and an increase of up to US$1,800/FEU on the European trades according to the Hong Kong-based consultancy, Linerlytica.

These proposed rate increases with Linerlytica confirming, “There remains very little conviction that the higher rates will hold in the absence of any capacity adjustments.”

In addition, the consultant reported, “Initial projections for November show capacity increases on the Transpacific and Asia-Europe routes of between 7% to 17% month-on-month, that largely reverses the capacity reductions in October.”

Even with the 0.9% of the fleet, 65 ships totalling 243,097 TEU idled, the flood of new ships, totalling 23 ships of 151,916 TEU delivered in the last 30 days has largely offset the non-operating fleet, while the scrapped vessels, 10 ships of 16,200 TEU are not enough to move the dial.

A collapse in demand has seen an increase in the number of available spot vessels for charter according to shipbroker Braemar, who reports, “With a larger amount of available spot vessels in the market, as well as increasing surplus tonnage being on offer, the overall tone floating around the market is not encouraging and the expectations for the fourth quarter of 2023 are alarming.”

Braemar adds that to sustain freight markets in the period from now to 2025 there is an expectation for a substantial increase in demolitions. The broker believes that the cascading of ships, will put vessels in the mid-sized range under pressure, ships of between 4,000 and 7,500 TEU.

“There are 250 vessels in the 4,000-7,500 TEU size bands that are aged over 20 years. Significant fleet management to follow while the supply and demand dynamics remain out of kilter,” said Braemar.

In its August figures Xenata Freight Index said its data showed a 62.7% decline in long-term freight rates over the last year, with a 7.8% decline in contract rates in August alone.

Xenata added, “Routes from the Far East, the busiest globally, experienced a significant 75% year-on-year contract value reduction based on Xeneta's regional sub-index.”

DP World and Maspion Group have announced the start of the construction works on a new container terminal in Gresik, East Java, Indonesia.

The new container terminal will strengthen East Java's position as a vital trade gateway, connecting Indonesian companies with clients in the region and throughout the world.

On 2 October 2023, Ahmed Bin Sulayem, group chairman and CEO of DP World, and Alim Markus, chairman and CEO of Maspion Group, attended the groundbreaking ceremony, which was witnessed by Budi Karya Sumadi, Minister of Transportation of Republic of Indonesia and Septian Haryo Seto, deputy of coordinating minister for Maritime and Investment Affairs of Republic of Indonesia.

Furthermore, the joint venture DP World Maspion East Java will operate the contemporary international container port with a design capacity of up to 3 million TEUs.

As part of DP World's ambition of providing end-to-end supply chain solutions, the JV will also build an integrated industrial and logistics park adjacent to the box terminal, with an initial land size of 1,1 million m² and future development potential.

"We see significant potential in Indonesia as a major hub for global trade, and we hope to unlock further growth in the region through meaningful partnerships and investments that bring opportunities through greater trade connectivity for local businesses and communities. Our partnership with Maspion Group to build new infrastructure in Gresik will strengthen East Java’s position as a key trade and logistics gateway. It will also serve as a cornerstone in our strategy to expand our global ports and logistics network to offer our customers end-to-end solutions and boost supply chain resilience,” stated Ahmed bin Sulayem.