US diesel prices continue to plummet as European financial uncertainty continues Despite Jean Claude Junkers assertion that there is an unshakeable desire to keep Greece in the Euro, US diesel prices continue to fall. For the first time since February, diesel prices across the US fell nearly below the $4 per gallon mark. Average US diesel prices on May 15^th, at $4.004 per gallon is down 5.37 cents on the same period in 2011.

Prices fall below the $4 mark in the Lower Atlantic, New England, the Midwest, the Gulf Coast and the West Coast excluding California. Angela Merkels statement this morning that Europe will provide Greece with a path to recovery could potentially stabilise US diesel prices if backed by the troika of lenders.

To read more about falling US diesel prices,please click here........

With the Euro-Sterling exchange rate 7.6% below the monthly average of last year , and the Euro-Dollar exchange rate 7.9% below last year’s average, the Irish Exporters Association stated that “the euro’s sharp slide should provide a welcome boost for Irish exports”.

This currency variation on its own, in monetary terms, equates to an addition €1 Billion of exports to the UK and an additional €1.7 Billion to the US.

However, John Whelan, CEO of the Irish Exporters Association, said that a boost in Irish Exports needs to be facilitated by banks by locking in “the gain by forward hedging contracts with their banks, to cover the next 6 to 12 months trading”, in order to ease the pressure on exporter’s working capital. The IEA (Irish Exporters Association) is calling for the establishment of a loan guarantee scheme immediately and have urged minister Richard Bruton to act swiftly.

To read the full press release from the IEA, Please click here………………………….

To read how Irish exporters broke all records in 2011, please click here……………..

Lufthansa recently announced that it plans to cut 3,500 administrative jobs globally. This comes in the wake of an announcement that the Lufthansa Group made an operating loss of €381m for the first quarter of 2012. Lufthansa, in its plan to return to profitability, has set a target of reducing costs in administrative areas by 25% in 2012; it also plans to save €200m in 2012 through what is described as a “Group Wide Purchasing Project”.

In regards the plans to axe 3,500 administrative jobs, Christopher Franz CEO  said “We can only safeguard jobs for the long term and create new openings if we reorganise the administrative functions and accept job losses now “

To read the full Lufthansa press release, please click here…..

To read more news about Lufthansa, please click here………

Cargolux made history last week by launching the world’s first Boeing 747-8 freighter full flight simulator at Cargolux’s training centre in Luxembourg. The simulator uses “a new state of the art electric motion system” mirroring the motion and hydraulics of an actual 747-8 freighter very closely.

Frank Reimen, CEO of Cargolux said that ‘The integration of the new simulator into the Cargolux crew training provides us with a more efficient simulator operation. The application of new technologies results in lower energy consumption and a higher fidelity training environment compared to our 747-400F full-flight simulator”

Cargolux have designed a state of the art training environment with more authentic motion sensors which are superior to the hydraulic system previously used and when combined with highly enhance visuals, give pilots an excellent preparation for the vagaries of International weather systems and hazardous flying conditions.

To view images(small) of the flight simulator,please click here...

The WCI (World Container Index) for May 3^rd on the Shanghai to Rotterdam freight lane showed that westbound container spot rates increase by a staggering 19%. This dramatic increase equates to an increase of $629 per forty foot container and is a result of GRI’s (general rate increases) successfully implemented by major carriers on May 1^st.

The World Container Index is compiled and assessed by Drewry reports and measures container freight rates on major East-West trade routes.

To read more about the Asia-Europe freight rates, please click here

AEO accredited and C-TPAT certified shippers will be reap the benefits of faster US customs clearance as a result of an agreement signed on May 4^th.the new agreement gives the EU’s AEO (Authorised Economic Operator) accreditation and the US’s C-TPAT(Customs Trade Partnership Against Terrorism) mutual recognition which will have a positive effect on 15,000 “trusted traders” worldwide.

In real terms what does this mean for AEO accredited traders?

In real terms the 100% screening rule for all US bound containers will be relaxed somewhat for certified shippers, whereas non AEO/C-TPAT shippers will have additional focus put on them by US customs as they are considered “riskier shippers”.

Emerald Freight Express is only one of a handful of Irish freight companies to hold full AEO accreditation which ensures customer shipments are fast-tracked through US customs.

To read more about Emerald’s AEO accreditation, please click here………….

The Shanghai Container Freight Index (SCFI) reported that during the week ending 27-04-2012, freight rates between China and Northern Europe increase by a staggering 3.3%, which in monetary terms is $180 per TEU (twenty unit equivalent). This increase surprised many market analysts as a substantial rate increase is due to be implemented by several major carriers today, May 1^st.

However, in regards implementing further rate increases, Lars Jensen, esteemed freight industry analyst, warned that ““With the capacity reductions now disappearing, the carriers are facing a test: will they collectively have the resolve to maintain their focus on profitability rather than market share, or will some succumb to the need to increase vessel utilisation – and thus, potentially, launch a new price war?”

To view the Shanghai Container Freight Index, please click here………………

OOCL has announced their intention to implement a rate increase on its Asia-Europe services, which will be “applied to all cargo loading on or after or after May 15^th”. The may rate increase is in addition to a GRI(general rate increase) of $800 per TEU on the same route which was implemented on March 1^st and another rate increase in April which equated to $200 per TEU. The May rate increase also equated to $200 per TEU.

The reasoning behind the most recent rate increase was explained in a press release as being “Currently, ocean freight rates continue to be below the required level to cover basic operating costs or transportation costs on our North Europe to Asia Trade. Considering that the current levels are unsustainable for the long term, we are announcing a General Rate Increase (GRI) which will be applied to all cargo loading on or after May 15.

The GRI, which is required to maintain a viable service level and a comprehensive liner network for our customers”

To read the OCCL press release related to the April GRI, please click here….

To read the OCCL press release related to the May GRI, please click here….

Cargo Volumes for Air France-KLM fell by 3.4%, year on year, in March 2012. Cargo capacity was also down 0.6% when compared to March 2011. The comparative load factor was also down 2.0 points whilst unit revenue per available ton kilometre remained stable.

The main areas of decline were in the Americas and Asia, which fell by 6.3% and 2.8% respectively.

To read the full Air France press releases, please click here………………………….

To read about the recent air France strike action please click here............

2012 could prove to be a challenging year for carriers as Alphaliner predicts that carriers could require funding of $20 Billion to cover interest payments and capital requirements.

The high level of indebtness in the industry is of growing concern taking into account that container shipping lines made losses of over $6 Billon in 2011. Alphaliner said that “Greater attention will be paid to their balance sheets, with fresh capital injections required to keep some of the companies’ solvent. Alphaliner estimates that total short term funding needs for container carriers could reach $20 Bn in 2012, based on the companies’ estimated debt repayment and finance cost requirements this year.”

In 2011 alphaliner surveyed seventeen carriers and discovered only four carriers who had what could be classified as healthy leverage ratios using the formula – Net Debt: EBITA < 7, where EBITA is earnings before interest, taxation and accruals.

To read more from Alphaliner, please click here…………..

The Danish conglomorote, Maersk, which operates mainly in the transportation and energy sectors, announced in their latest outlook report that it is expecting to experience losses again this year in its transportation subsidiary.

Despite successful implementation of GRI’s (General Rate Increases) earlier this year, Michael Pram Rasmussen, chairman of A-P Moller Maersk, said that a “negative result” for its container line division would be a result of “excess capacity”. Maersk also expects that “Global demand for seaborne containers is expected to increase by 4-6% in 2012, lower on the Asia–Europe trades but supported by higher growth in the North-South trades.”

Overall the A.P Moller Maersk group expects a positive result for 2012 with APM terminals expected to exceed 2011 performance levels and Maersks Drilling division is expected to replicate its strong performance of 2011.

To read Maersk’s latest outlook report, please click here………..

To read about Maersks market share penetration, please click here………………….

US diesel prices have fallen for the third consecutive week, as of the week ending 23/4/2012. In the past three weeks US diesel prices have fallen form an average of $4.148 per gallon to $4.085 per gallon for the week ended 23^rd April.

The Midwest witnessed the largest decrease in the past week, with diesel fuel prices falling by 4.7 cents to a price level of $3.974 per gallon, which is the lowest average diesel price recorded in the states.

Conversely, the most expensive diesel prices were on the US west coast, where prices averaged $4.345 per gallon, a differential of 8% when compared to the Midwest.

To view the past three weeks of US diesel prices, please click here………

To view more about US price fluctuations, please click here............

It is predicted that increased U.S demand for Chinese goods will lead to the Chinese export sector recovering late in 2012. This is despite the fact that China has just experienced its slowest quarterly growth since the Lehman collapse in 2008 and subsequent global financial crisis in 2009. Q1 growth in the Chinese export sector was 8.1% year on year which was a dismal performance when compared to the year on year increase of 26.4% in Q1, 2011.

HIS global Insights reported that there are many green shoots appearing in the Chinese economy, such as in the chemical and steel sector. However the decrease in exports is mainly due to weakened European demand. Despite the continuing uncertainty regarding Euro zone demand, IHS predicts that growth in the U.s market will lead to a recovery in the Chinese export sector.

To view the full IHS report, please click here…………………….

To read more about Chinese exports, please click here…….

February witnessed a sharp decline in US containerised imports as they fell by 5.8%. This equated to imports of 1.19 million TEU’s for the month. Furniture imports fell by 145, footwear fell by 15% and toys were down 20%. In regards regional distribution of US imports, Northeast Asia fared the worst, down 13%.

Conversely, European shipments fared the best as they witnessed a sharp increase of 10% into the US market.

To read about US retail sales, please click here...

The GRI (General Rate Increase) by major carriers on the Asia-Europe trade lanes came into effect on April 1^st, which resulted in a pot rate increase of 28% by April 5^th. In monetary terms this equated to a spot rate increase of $844 per FEU (forty foot equivalent unit) on the Shanghai to Rotterdam freight lane.

This 28% hike follows on form March 1^st, when the World Container Index (WCI) reported that Shanghai to Rotterdam freight rates increased by a staggering 114%.

The spot rate on March 29 per FEU was $2,654 and rose to $3,408 per FEU on April 5^th 2012. In addition to these recent freight rate increases, OOCL plans to implement a GRI of $450 per TEU on May 1st.

Phillip Damas,director of Drewry Supply Chain Advisors, commenting on these rate increases said “Looking ahead, we must question how sustainable these high Asia-to-Europe freight rates are, given the latent capacity currently parked by carriers and tramp owners, and given the expectation of deliveries of large new ships from the shipyards,”

To read more about the proposed OOCL freight rate increase, please click here.

To read the extent to which Asia-Europe Spot Rates Soared in March, please click here….

A Chinese cargo ship was hi-jacked by Somali pirates in the sea of Oman last Friday morning. Nine Somali pirates, armed with guns and axes, boarded the vessel amidst a hail of gunfire, commandeered the ship and forced the captain to head towards Somali waters.

When contacted by Chinas ambassador to Tehran the Iranian navy was dispatched and pursued the Nanjin Ocean Shipping cargo ship. The Chinese crew shut down the engines and many jumped overboard as the Iranian navy opened fire on the Somalian pirates. The pirates, stranded at sea, and under intense fire, duly surrendered.

All 28 Chinese crew members were rescued and brought safely ashore.

To read more about pirate attacks please click here....

The week ending April 2^nd saw US diesel prices fall for the first time in ten weeks. When compared to a week previously diesel price fell by half a cent to $4.142 a gallon, which is 16.6 cents more expensive than the same week in 2011. The Rocky Mountain regions witnessed a large fall with prices falling more than one cent whereas East Coast diesel prices remain unchanged. California experienced the largest fall with prices falling by over two cent.

The latest information referring to the week ended 9/4.2012 indicates that the reduction of a week previously has been negated as average diesel prices rose by 0.6 cent.

To view the most recent information on US highway diesel prices, please click here>>>>

To read more about US diesel prices, please click here>>>>

Orient Overseas Container Lines (OOCL) announced that it is going to increase rates on the Asia-Europe route for the third time this year, on this occasion on cargos from Asia to Europe, by $450 per TEU, which is planned to be implementing on May 1st.

 This follows on from a rate increase of $800 per TEU in the same direction, from Asia to Europe, of $800 per TEU on March 1^st.

This announcement follows on from GRI (general rate increases) implemented by other major carriers such as Mediterranean shipping, Maersk Line and United Arab shipping.

To read about OOCL and the new G6 alliance please click here….

To read about Hapag Lloyds recent rate increase, please click here….

The recent 2011 annual results for Cathay pacific Airlines show that despite an increase in turnover of 9.9%, profits for the airline have decreased by 61%, when compared to the company’s performance in 2010. Cargo and rail carried decreased by 8.6% to 1.6 million tonnes.

A rise in fuel prices combined with significantly less demand for cargo from Hong Kong, mainland China and Europe are cited as two of the principal reasons for the decline in cargo profitability. Christopher Pratt, chairman of Cathay Pacific stated that “Fuel is our biggest single cost and the persistently high jet fuel prices had a significant effect on our operating results in 2011. Disregarding the effect of fuel hedging, the Group’s gross fuel costs increased by HK$12,455 million (or 44.1%) in 2011.”

An interesting is that in regards China more manufacturing is now being done in the western and central regions whereas production has decreased in the Yangtze river and river Delta region. Also there is increased demand for imports from mainland China as a result of Chinas rising middle classes which has resulted in more cargo being shipped to Hong Kong for trans-shipment to mainland China.

To view the full report on Cathay’s Pacific’s 2011 results, please click here.

To read of Cathays traffic reduction in 2011, please click here

Lufthansa Cargo recently announced an addition to its global services in China with the addition of the city of Chongqing. Located in southwest China, Chongqing is one of Chinas national central cities, with a population of between 6 and 7 million whilst the municipality has a population of 28.8 million.

Lufthansa Cargo has announced four weekly flights to Chongqing which will be serviced by Lufthansa’s MD-11 freighters.

In addition to the new Chinese service Lufthansa’s freighter network has increased its service to Detroit, the US’s automotive capital to twice weekly services and has set up a new service from Frankfurt to Montevideo, the capital of Uruguay.

Dr. Andres Otto, Lufthansa Board Member Product and Sales stated that “We are expanding our presence in China, the world’s biggest airfreight market, and now laying on freighter connections to a total of six Chinese destinations.”

To read Lufthansa’s full press release, please click here………….

To read about e-commerce opportunities in China,please click here...

Despite being 95% down on the trade surplus of February 2011, the Japanese ministry of finance was delighted to post a surprise trade surplus of $369m (29.394 billion Japanese Yen) in February, being the first trade surplus to be posted in the past five months.

In regards exports to the USA; when compared to February 2011, exports of plastic materials increased by 14.3% and exports of computers increased by a substantial 31.5%

Motor vehicle exports increased by 29.3% whilst exports of buses and trucks increased by a staggering 51.9%.

In regards exports to the EU, exports generally across the board decreased when compared to the same period in 2011 with the main exceptions of non-ferrous metals(+11.3%),computers(+52%) and motorcycles(34.5%).

On the imports from the EU side of the house, fruit and vegetable imports increased dramatically, by 37.4% and 10.2% respectively.

To view a full comprehensive report on Japans February trade surplus, please click here.

Hapag Lloyd has announced rate increases on several lanes from its East Asia hubs, which will take effect from April 2012.

From April 15^th rates on the East Asia to the Red Sea trade lane will increase by $400 per TEU (twenty foot equivalent unit) and a further $300 per TEU on May 1^st.

Other increase from East Asia are as follows; to the east coast of South America($500 per TEU), New Zealand ($300 per TEU), India($400 per TEU), Australia($300 per TEU), Central America($50 per TEU), and Caribbean/Panama($560 per TEU). The majority of these increases will take effect on April 15^th 2012 as part of Hapag Lloyds rate restoration programme.

To view comprehensive details of Hapag Lloyds rate amendments, please click here.

To read of the G6 alliance, which includes Hapag Lloyd, Please click here

The Boston Consultancy Group (BCG) conducted comprehensive research in regards global r-commerce opportunities recently and concluded that in regards the G 20 nations, the internet economy will grow at a rate of more than 10% over the next five years. By 2016, BCG estimates that the Internet economy in the G20 countries will grow to $4.2 trillion. As a percentage of GDP the UK has the largest internet economy, at 8.3%, whereas China is in third place at 5.5%. In 2010, the US’s Internet Economy/GDP percentage was 4.7%.

An interesting statistic in regards China is that 4% of all consumers spending were ROPO (research online, purchase off-line). This figure was a staggering 16% in Germany, which is an important consideration for Irish firms exporting into the German market.

In Germany, China, Turkey and France, Me’s active on the internet have grown revenues 22% faster than those with little or no internet presence. In China “High Web” companies grew their revenues by an impressive 25% in the last three years.

To read the full press release from the BCG, please click here….

Enterprise Ireland recently reported that exports to China have increased by 10% in 2011 and is expected to grow by 15% in 2012. The value of exports to China in 2011 was €275m approximately. In 2010 the value of Irish exports to China was €251m

There are currently 200 Irish companies exporting to China with 140 with physical offices in China.

Frank Ryan of Enterprise Ireland said that China was the “number one destination for indigenous Irish exports in the Asia region.”

Enterprise Ireland has three offices in China, located in Shanghai, Beijing, and Hong-Kong and are concentrating on developing the following sectors in the Chinese market: Education services, Aviation/Aerospace, Financial Services, Software/IT, Lifescience/Medical devices, cleantech and Agri/Machinery services.

To read about freight rates to China, please click here.

The Shanghai to Rotterdam freight lane lane spot rates has fallen for the third consecutive week. Prices fell by 1.4% in the third week to $2,648 per FEU (forty foot equivilant). This is welcome news despite the huge general rate increase which was implemented by all the major carriers on March 1^st. However the price per 40 foot equivilant remains stubbornly high at $2,648 and 28% higher than the $2,060 price level for the same week last year.

To read more about Asia-Europe spot rates, please click here.