The captain and chief engineer of a cargo ship were tragically killed during a pirate raid on the vessel off the Nigerian coast, early last week.

According to the International Maritime Bureau (IMB) reporting centre, pirates, who are believed to be Nigerian pirates, indiscrimately sprayed the vessel with bullets and two members of the crew were fatally wounded as a result. This attack occurred despite the fact that pirate attacks on the Horn of Africa dropped from 45 in 2010 to 24 in 2011. However international cargo shippers are very concerned by the new levels of violence being employed by various pirate groups.

To read more about piracy in east African shipping lanes, please click here

Part of the 9/11 Act requires that 100% of cargo containers entering the US need to be scanned and screened. A GAO(Government Accountability Office) report stated the following “"uncertainty persists over how DHS and CBP will fulfil the mandate for 100 percent scanning given that the feasibility remains unproven in light of the challenges CBP has faced implementing a pilot program for 100 percent scanning.”

Initially the requirement for 100% screening was for 6 ports but the scope has been recently trimmed back to one individual port.

DHS (Department of Homeland Security) and CBP (US customs and border control) have made varying levels of progress in the following areas

-efforts to gather advance information about container shipments to assess the risks of these containers,

-technologies used to protect the integrity of containers and to scan them to detect WMD and other contraband,

- partnerships with foreign governments and the private sector to improve container security efforts, and

- the status of efforts to scan 100 percent of U.S.-bound cargo containers

The GAO also reported that “Logistical, technological, and other problems at participating ports have prevented any of the participating ports from achieving 100 percent scanning, as ultimately required by the 9/11 Act, leaving the feasibility and efficacy of 100 percent scanning largely unproven. For example, we reported in October 2009 that while CBP had been able to scan a majority of U.S.-bound cargo containers from three comparatively low-volume ports (Qasim, Puerto Cortes, and Southampton), at the higher volume ports of Hong Kong and Busan, CBP had been able to scan no more than 5 percent of U.S.-bound cargo containers, on average”

To read the full report compiled by the GAO, please click here.

It is estimated that the Air France strike which occurred earlier this month could cost the airline up to €100m in lost revenue. On Friday, 9^th February, according to an Air France press release, 23% of long haul and 25% of medium haul flights had to be cancelled. Over the four day strike, 25% of Air Frances overall flights had to be cancelled.

Ironically the reason behind the strike is in response to a new law which obliges workers to give 48 hours notice of intention to commence a strike. Air France was forced to make 300 last minute flight cancellations since the start of the strike, but despite the unexpected disruption, Air France managed to carry over 325,000 passengers over the four day strike period.

To read the full Air France press release please click here.

Increases of between $300 to $800 per teu on the Asia-European sea freight route represent the largest increase since 2008. Spot rate increases, if successfully implemented on March 1st are set to increase from a current level of $700 per teu to around $1,000-$1,500 per teu. This dramatic increase of spot rates is in response to significant losses in 2011 due to overcapacity on the Asia-Europe freight lane.

Shippers are expected to enthusiastically resist these new rate increases as it greatly increases their cost base. Maersk is removing 9% of vessels from the Asia-Europe trade lane due to oversupply and has entered a vessel sharing agreement with CMA-CGM. This move by Maersk is an effort to increase spot rates on the Europe-Asia trade lane.

To read the full article from Maersknews.com please click here

To read more about Asia-Europe freight overcapacity, please click here.

John Whelan, CEO of the Irish Exporters association, has warmly welcomed the visit of incoming Chinese president, Xi Jiping, to the island of Ireland. Whelan was very optimistic on a number of fr9onts in regards the visit as he sees huge potential in regards Chinese foreign direct investment in Ireland, increasing export trade into the EU through Chinese companies basing operations in Ireland, and the potential for a “Special Export Zone” to attract Chinese investment.

As well publicised, a number of important trade agreements were signed between Ireland and China over the past three days, which bodes well for the future growth of Irish Exports.

To read the Irish Exporters Association full press release, please click here.

To read more about the Chinese economy ,please click here

We are very pleased to announce the appointment of Mick Woods as Business Development Manager for Emerald Freight Express. Mick is a very qualified and accomplished seasoned business development professional with over 25 years valuable experience in the Irish Freight Industry.

As business development manager, Mick welcomes any enquiries from potential new clients and repeat enquiries from Emerald’s loyal customer base. Mick can be contacted directly on +353 86 4056 132 or alternatively by e-mail at mick@emerald-freight.com. 

To read about other recent key appointments at Emerald Freight Express, please click here

The GDF (Gewerkschaft de Flugischerung), the union for air traffic workers, announced a strike for Thursday, February 16^th, from 3 p.m to 10.p.m and on Friday 17th February from 8.a.m to 10.p.m, over a workers’ wages dispute. Consequently 172 flights were cancelled yesterday with a further 280 cancellations today. The 280 flights cancelled today represents 22% of all flights due out from Frankfurt airport, with the majority of cancellations belonging to Deutsche Lufthansa.

Herbert Mai, Fraport AG’s board member for labour relations stated that “We find this strike threat incomprehensible. The union remains completely intransigent and irresponsible in its demands for high, double-digit pay increases and other adjustments for working hours and special benefits ranging between 50 and 70 percent”

To read Fraports press release about the ongoing strike, please click here.

To read more about Frankfurt airport, please click here.

Janet Napolitano, Us secretary of homeland security, whilst attending the World Economic Forum in Davos, Switzerland, unveiled the “National Strategy for Global Supply Chain Security”. The objective of this global strategy is to prevent terrorists from exploiting global supply chains. Napolitano said that “We must continue to strengthen global supply chains to ensure that they operate effectively in time of crisis, recover quickly from disruptions and facilitate international trade,” and that ““We look forward to working closely with our international partners in the public and private sector to build a more resilient global supply chain.”

The successful implementation of this strategy will require the co-operation of global public and private stakeholders who have the common goal of attaining global supply chain security. The global supply chain strategy covers the legitimate commercial global supply chain, all modes of transportation, all types of cargo (containerised and none containerised), all nodes, and all people associated with nodes and cargo. A key part of this strategy is what is termed as the Outreach Plan, which will seek stakeholder input through the Cross Sector Supply Chain Working Group from the private sector and by combining the resources of the Department of Homeland Security and the US state in order to attain input from International Partners. The Objective of the International Partner input to is identifying global opportunities to enhance security, efficiency and resilience.

To read the press release form the Department of Homeland security  please click here.

To read more about the US’s Global Supply Chain Security Strategy, click here

Alphaliner, the freight analysts, reported that weekly sea freight  capacity on the Europe-Far East trade lane will increase from the current level of 248,000 teu to 284,000 teu weekly.

With significant alliances and consolidation on this trade lane in 2011, this increased capacity is a good indicator of the predicted fierce level of competition which is expected in 2012.

The main question posed by freight shippers is whether or not a rate war will ensue as a result of increased capacity?

Analysts believe that a rate war will be minimised by transferring shipments of over 10,000 teu’s onto secondary trade lanes. Despite this, analysts expect rates in 2012 to reduce by 1.5% in 2012.

Consolidations and Alliances’ of note in 2011 were Evergreen shipping co-operating with the CKYH alliance, the G6 alliance was formed, and a alliance between two shipping giants MSC and CMA CGM was also announced.

To read more about Evergreens co-operation with the CKYH alliance please click here.

To read more about the G6 alliance, please click here

To read more about the alliance between MSC and CMA CGM please click here.

The March tsunami and subsequent earthquake, which wreaked havoc in Japan last year has resulted the in the Japanese Department of Finance to post a trade deficit for the first time since 1980. The tsunami and subsequent earthquake causes significant supply chain distributions, which translated into a deficit of $32 billion for 2011.

In 2011, exports fell by 2.7% whereas imports soared by a massive 12% to $872.4 billion. Japanese auto-manufacturers suffered the brunt of the after effects of the twin disaster with huge disruptions to its supply chain, which had an adverse effect on Japanese automobile exports. This bad situation was exacerbated by a reduction in global demand due to inclement conditions in both the USA and Europe. Other market sectors which fared particularly badly on the export front were electronic parts, semi-conductors and ships.

Hideki Matsumara, a senior economist with the Japanese research institute ,responding to the news of Japans first trade deficit in 31 years said “It reflects fundamental changes in Japan’s economy, particularly among manufacturers” and that “It’s gotten difficult for manufacturers to export, so they’re they’ve moved production abroad so that products sold outside the country are made outside the country”

To read more about Japanese companies increasing its manufacturing capacity outside Japan, please click here.

German manufacturing output rose significantly in January 2012, which contributed to the Eurozone Purchasing Managers Index rising for the second consecutive month. German manufacturing output has increased for the first time in four months, and when combined with improving results for Italy and Spain, optimism is beginning to return to the Eurozone area.

The German PMI (Purchasing Managers Index) rose from a level of 48.4 in December to 50.9 in January 2012, whilst the Composite Output Index, which measures the combined output of manufacturing and services surged to a new 7 month high. The manufacturing growth was in response to increased German Domestic Demand, whilst export demand remained relatively weak.

The Purchasing Managers Index for Germany measures the overall performance of the German manufacturing sector. The survey is compiled after thousands of interviews are conducted with German business executives. As manufacturing is a critical part of the German economy the German PMI is considered as a good indicator of the state of health of the German economy, which in turn is a good indicator of the overall health of the general Eurozone area.

To read about the performance of Germany's manufacturing sector,please click here

US Homeland Security have reported that the US is in the process of developing a global supply chain security strategy. This follows on from the National Strategy of Supply Chain Security which was released by the White House on January 25^th, 2012.

It is assumed that the motivation and objective of the global strategy will be similar to that of the National strategy which is to “protect the welfare and interests of the American people and secure our Nations economic prosperity”

Janet Napolitano, speaking from the World Economic Forum in Davos said “We must continue to strengthen global supply chains to ensure that they operate effectively in time of crisis; recover quickly from disruptions; and facilitate international trade and travel”.

The goals of the existing National Strategy On Supply Chain Strategy are to “promote the secure and efficient movement of goods” and “to foster a resilient supply chain”. The US administration will meet with key personnel in the global supply chain industry over the next 6 months in order to foster a collaborative approach to global supply chain security.

To read about the US's new cargo entry project whioch we reported on last November please click here

The TSA (Transpacific Stabilisation Agreement) is a research and discussion forum of major container shipping lines that carry sea freight from Asia to US ports. As a group, the TSA develop voluntary, non-binding guidelines for rates and charges.

The TSA suggested a rate increase of $400 per FEU and this translated into Drewrys trans-pacific spot rate stabilising at $1,832 per 40- foot equivilant unit. This is good news for ocean carriers despite the fact that the spot rate is 12% lower than the same week in January 2011.

TSA members include major shipping companies such as APL, China Shipping, CMA-CGM, Cosco, Evergreen Line, Hanjin shipping, Hapag-Lloyd, HMMN, k Line, Maersk Line, MSC, OOCL, Yang Ming Marine transport Corp and ZIM shipping .

To read about the upward trend of Asia-Europe rates, please click here

The IMF has lowered its global growth forecast for 2012 by 0.75% to 3.25%. The IMF’s World Economic Outlook report predicted that the Euro area will experience a mild recession in 2012 due to the culmination of a number of factors; namely a rise in sovereign yields, bank deleveraging and spending cuts by national government or as the IMF refer to it as “fiscal consolidation”.

The IMF believes that the main priority in 2012 should be to bring back confidence into eth Euro zone by supporting bank deleveraging and by providing more liquidity and monetary accommodation for EU member states. The repair and reform of financial systems is also of high importance to the IMF.

Advanced Economies are predicted to grow by 1.2% in 2012 whilst “Emerging and Developing Economies” are expected to grow by a whopping 5.4%. Some of the main economic growth highlights are:

China is set to grow by 8.2% and India by 7%

Brazil is set to grow by a more modest 3%

Sub Saharan Africa is set to grow by 5.5%.

Unfortunately the EU at -0.1% will set to enter a mild recession.

To view a chart predicting global GDP growth, courtesy of the IMF, please click here

To read the full IMF press release, please click here.

SkyCargo, Emirates air freight division, has boosted its capacity on the Dubai-African continent trade lane to over 300,000 tonnes. Five new weekly flights to the capitals of Zambia and Zimbabwe, Lusaka and Harare are to be launched in two days time on Wednesday, February 1^st. two months ago SkyCargo launched a dedicated weekly route from Dubai to Accra, Ghana and Lome, Togo.SkyCargo’s weekly freight capacity into and out of Africa, post February 1^st will be 6000 tonnes.

Ram Mehen, Emirates Divisional Senior vice President of Cargo stated that “While many regions are experiencing challenging economic conditions, Africa – with a population in excess of one billion and rich in natural resources - is one of the few areas to record growth and the long-term outlook is very positive,”

Mr Mehen also said that “We expect demand to be strong for a variety of commodities going into and out of Lusaka and Harare and have no doubt the two destinations will be a strong addition to our African network.”

SkyCargo is one of the world’s fastest growing airlines and this new expansion in its African services can connect business in 22 countries across Africa to Sky Cargo’s network of more than 100 countries.

To view SkyCargo’s full press release, please click here.

The Baltic Exchanges Freight Index hit a three year low on Thursday, 19^th January. This freight index which measures the prices of dry commodities was down by approximately 50% in 2011. Dry bulk traffic includes commodities such as coal, iron-ore and grain.

Lessening demand for raw material from China is an issue of major concern for shippers in the region. When combined with economic instability in the Euro zone and overcapacity the current outlook for Baltic shippers is quite pessimistic.

The 19^th January low represents the lowest the index has hit since January 2009 and freight rates are under extreme pressure with oversupply prevalent in the Baltic region.

The BDI (Baltic Dry Index) focuses on dry bulk cargoes not only in eth Baltic region, but internationally. The exchange measures rates associated with four main ship classification sizes, Capesize,Panamax, Supramax and Handysize and the rates they charge for dry bulk traffic.

This index is critical to the shipping industry as it measures the demand for shipping capacity versus the supply of dry bulk carriers.

To read about the Shanghai Asia-Europe Freight Index, please click here

The EU has joined forces with the US in banning imports of Iranian oil in response to Iran’s continuing nuclear development programme. In December, the United States imposed huge financial sanctions on Iran, with huge entities being imposed on any US entity that has dealings with the Iranian central bank.

The EU embargo on new contracts for crude oil and petroleum products will commence immediately. In response politicians in Iran have threatened to block the Strait of Hormuz, cutting off a gateway for the Arab states crude oil exports, causing chaos in supply chains globally.

After China the EU is Iran’s largest importer of crude oil and petroleum products. The Strait of Hormuz links the gulf with the Indian Ocean and is the gateway for ships entering Dubai. 17 million barrels of oil a day pass through the Strait of Hormuz and any blockade would have major ramifications on global supply chains.

To read more about tensions rising in the Strait of Hormuz please click here.

The association of American Railroads (AAR) reported a significant increase in weekly rail freight  for the week ending January 14^th. US railroads originated 298,500 carloads for the week winch represented an increase of 5.5% when compared to the same week last year whilst intermodal shipments increased 18.2% when compared to a week previously and up 7.4% when compared to the same period last year.

Crushed stone, sand and gravel carloads are up a phenomenal 33.2% when compared to the same week in 2011. Motor vehicles and equipment show strong signs of recovery with weekly carloads up 31.5%. Petroleum products are also up 28.9%. The main sector to show a decrease in activity was the grain industry, which saw a decrease of 10.1%.

In Canada, a similar pattern is emerging with rail car carloads up 9.8% when compared to the same week last year.

To view the Aar press release, please click here.

Asia-Europe spot rates have increased for the fifth week in a row. In fact, Shanghai to Rotterdam spot rates increased by 4.9% in one week. The Year of the Dragon will commences on January 23^rd and European importers are scurrying to secure container vessel capacity pre the factory shut down for the Asian new year. This demand has led to a dramatic increase in spot rates. In fact, in the first week of January spot rates on the Asia-Europe route surged by 30.3%.

However, Drewry Maritime, the London based shipping consultants, warned that “Once the pre-Chinese New Year rush recedes later this month spot rates will retreat back to December levels, unless carriers take action to remove surplus capacity from the trade,”. Martin Drewry of Drewry Maritime also warned that “Shippers should beware…..Locking carriers into low freight rates today may hinder surety of supply in the future.”

To read more about the recent surge in spot rates on the Asia-Europe route, please click here

The year 2011 was an exceptionally good year for German exporters, with the November figures showing year on year growth for the month of 8.3%, with significant inroads being made into the bourgeoning Chinese market. The value of German exports to November 2011 was €94.9 billion whereas imports at November YTD were valued at €78.7 billion. Germany’s foreign trade balance showed surplus of €162 Billion.

Out of the €94.9 Billion of exports, €5 Billion went to member states of the EU, an overall increase of 8.4%.

However in China, December saw export growth slow down significantly to 13.4% year on tear, which was exemplified by a flat growth rate over the 12 months of 2011. Import growth also slowed down significantly in December when compared to November’s growth figure.

To read more about Germany’s booming exports, please click here.  

Shortly before Christmas, Milan based Cargoitalia ceased all its operations due to mounting financial losses, and teh company is set to be dissolved and liquated. The company ceased all operations on December 21^st, 2011.

Cargoitalia fleet of MD-11’s have been grounded since December 21^st, 2011. The company put down its dramatic demise to a slump in global demand, which led initially to routes being cut, and then to its eventual bankruptcy.

The Italian air freight carrier, Cargoitalia, was established in 2005 and had previous financial difficulty after acquiring Alis Aerolinee. Cargoitalia had operated services in China, Hong Kong, UAE and the US prior to its dissolution.

The manufacturers Alliance for Productivity and Innovation (MAPI) in its quarterly report for 27 industries predicted modest growth for US manufacturers in Q1, 2012.

 MAPI’s December 2011index slipped one point since the last index in September, to 66 points, and held above 50 for nine consecutive quarters, which is indicative of future growth.

Donald Norman, MAPI economist stated that ““Despite the challenges posed by slower economic growth and continued problems in the construction and financial sectors, the manufacturing sector is the ‘Energizer Bunny’ of the U.S. economy,” and that “Barring a meltdown in the Eurozone, the U.S. manufacturing sector should continue growing at a moderate pace heading into 2012.”

Other notable findings include that the number of firms operating above 85% of capacity has also softened and the annual orders index improved when compared to December 2011. Another interesting finding was that 95% of companies surveyed said that the negative effect of the Euro zone crisis has been minimal.

The composite business outlook index is the composite of the views of 64 senior financial executives, a weighted sum of the U.S. shipments, backlog orders, inventory, and profit margin indexes.

To read more about MAPI’s quarterly report, please click here.

To read more about US manufacturing please click here.

US retail sales in December 2011, up 0.1%, was the slowest rate of growth in the last seven months. Year on year sales were up 6.5%.

The 0.1% increase in December was disappointing when compared to a 0.4% increase in November. The slow rate of growth was reflected by an increase in savings, despite high hopes for the December shopping season.

However the year 2011 represented the strongest year for US retailers since 1999, according to the US commerce department. Electronic sales were the main victims in December and showed the biggest decrease since March 1999. The first week of January continued the downward trend as sales dropped 5.4% compared to a week previously. However retailers are optimistic as the US unemployment rate fell to 8.5% in December and JP Morgan has predicted an increase of 2% in consumer spending in Quarter 1, 2012.  

A new fatigue rule which applies only to passenger pilots and not to cargo pilots has enraged cargo pilots. UPS air cargo pilots unsuccessfully launched a legal challenge to this exemption and were outraged by the courts decision to uphold the ruling.

Fed Ex pilots threatened not to “sit idly by and allow another 50 years of ambivalence to take hold”.

The new fatigue rule stipulates that passenger pilots will be required to take a 10-hour break before flying. However the Federal Aviation Administration (FAA) exempted air cargo pilots, which will take effect in two years time.

The Cass Freight Index, which measures No0rth American shipping freight volumes, was up 0.75 in volume when compared with December 2010 and 15% up when compared to December 2009.

This strong December result is indicative of retailers maintaining low inventories and postponing delivery of shipments until the end of Q4, 2011.

The December results were very good news for US shippers as it followed two months of declining freight shipments. Shipment expenditure was up 1.8% when compared to November 2011 and expenditure was up a significant 18.8% when compared to December 2010.

The Cass Freight Index is a trusted barometer of North American freight volumes and expenditure. Cass uses a client base of 350 large shippers which Cass processes over $17 Bn in freight transactions on their behalf annually on their information system platform.