News Highlights week: 40 - 2021

TS Lines is in the midst of reorganizing its network of services covering Japan and South East Asia. 

The carrier is closing two of its existing services, the “TRX” loop, covering the South China - Thailand trade and the “JHT” loop, covering Japan, Taiwan, China and Thailand.

The latter loop is now split into two new separate services: a new “JHTN” which covers only Japan, Taiwan and China, while the second “JHTS” is covering South China and Thailand. 

The closure of “JHT” service in which CNC is slotting, effectively terminates a long-standing slot exchange agreement between the two carriers covering Japan and Thailand. As a result, TS Lines also ceases to take slots on CNC”s “JTX” service.

Furthermore, the Hong Kong based carrier drops Haiphong in Northern Vietnam from its “JTK2” service which now turns in two weeks instead of three covering only Japan, Taiwan and South China. The “JTK” service no longer serves Taichung in Taiwan, but continues to connect Japan, South China and two other ports in Taiwan, Keelung and Kaohsiung. 

Following this revamp, TS Lines no longer offers direct links between Japan, Vietnam and Thailand. However, the carrier still offers transhipment options in South China and the Straits.

ONE, Yang Ming, KMTC and SITC launch a South Korea, China, Straits and Thailand service 

Ocean Network Express (ONE), Yang Ming, KMTC and SITC will launch in late October, a weekly service connecting South Korea, China, Singapore, Malaysia and Thailand. ONE will brand it as “KCS” and Yang Ming will call it “KCX”.

The other two carriers meanwhile have yet to reveal their brand names for this new service. 

The “KCS / KCX” service will call at Busan, Shanghai, Xiamen, Singapore, Port Kelang, Pasir Gudang, Laem Chabang, Shekou, Busan. The service will turn in four weeks using four ships with each of the four vessel providers deploying one ship. The newly delivered 2,694 teu SITC LICHENG by SITC, the 2,664 teu NYK DANIELLA by ONE, the 2,556 teu KMTC SHIMIZU by KMTC and the 2,940 teu YM COOPERATION by Yang Ming. 

The new service maiden voyage is scheduled on 30 October from Busan with the SITC LICHENG. 

Charter market: the rate rise continues 

Activity in the charter market remains low due to a continued dearth of tonnage impacting most sizes. The underlying demand remains however strong, with ships coming up for employment on a prompt basis rapidly securing a new employment. 

Charter rates have been plateauing in the past weeks, but the rise in prices is now resuming, with both classic panamax and the 2,700- 2,900 teu units being fixed at new record highs, on the back of a surge in demand. Charterers” resistance to accept ever higher rates, especially for multi-year commitments, is therefore once more showing its limits. 

Charter rates are expected to carry on their journey at historically high levels going forward, as demand continues to far outstrip supply, in a context of continuously high cargo volumes and historic freight rates. Congestion issues around the world with over 300 ships “withdrawn” from the market as waiting for a berth off Chinese and US ports also play their part in supporting high charter rates. 
Meanwhile, the Golden Week holiday in China, which traditionally slows down trade, is this year having only a very limited impact on the charter market, with demand anyway limited by the dearth of ships. 

The only clouds on this bright horizon are therefore the falling spot cargo rates on the Pacific, a development that is believed to be temporary as Golden Week-related, and oil prices, which continue to rise steadily, having this week reached their highest level since 2014.

VNS