Sluggish supply chains could get even slower going forward. The green shipping initiative has had the industry concerned about increased costs, but now decreased speed could be a factor as well. This is because of the lack of insight shipping companies have into what type of fuel they’ll need to use. To offset that lack of knowledge, they’ll continue to use older vessels. The problem is that those vessels will need to run more efficiently and that could translate into them sailing at slower speeds.
For some good news on the high seas, the ICC International Maritime Bureau (IMB) reports that the period between January to June 2022 had the lowest incident rate of piracy since 1994. Of the 58 incidents reported—there were 68 in the same period in 2021—there were 55 boardings, two attempted boardings, and one hijack. Despite the lower numbers, the IMB reminds the industry that it’s not the time to be complacent since the number of boardings remains high.
California’s AB5 law has truckers protesting. The law restricts independent owner-operators, forcing them to be reclassified as employees. In response, a protest at the Port of Oakland forced its closure. Truckers blocked gates and access to the port’s container terminals. West Coast ports are already dealing with congestion and contract negotiations, so this new issue adds more stress to an already fragile supply chain.
Speaking of ships, in a world of super-sized container vessels, the tide has turned—at least in the commodity trades market. Small ships are outperforming larger vessels by a significant amount. According to a report from Clarksons Platou Securities, Spot employment for smaller bulk commodity ships costs more than for larger ships — in most cases, a lot more.
Moving to the East Coast, ports there are starting to deal with the same pain West Coast ports have been facing since early in the pandemic. Ships that are hoping to escape the congestion issues at the Ports of LA and Long Beach are moving east and shifting congestion at the same time. The McCown Report by Blue Alpha Capital states that the number of container ships waiting for a berth on the East Coast is much higher than usual, despite an overall drop in the number waiting country-wide.