Technology & Advancements
29 April 2020 • 10 min read
Oil Prices, Merger, Rates, and Freight Tech
This Week in Ocean Freight. Surcharges have been in almost every Ocean Freight Update I have done these past weeks
Something interesting happened this afternoon. At 11:30am I got an e-mail from the school my kids go to saying: Good morning. Earlier this morning there was a power outage and now we are closing the school. Please pick up your children at 12:00 noon. 30 minutes notice!
Sometimes I wish there was a Cogoschool platform. By that I mean a platform that manages school logistics, much like Cogoport manages freight. One that informs you timely of changes, and potentially suggests alternative solutions for issues. One that informs other parties involved and gives you the means to deal with the changes.
Instead of solving logistics challenges for customers I’m apparently (or a parent-ly) solving logistics issues for a school...
Anyway. My highlights from freight and other news this week:
Surcharges have been in almost every Ocean Freight Update I have done these past weeks. As fuel is often an important component of the surcharges:
“As the volatility in oil prices continue, there have been different opinions on its future with some predicting a three digit rate in a few years while a few hopeful of a downturn. Banking major Barclays has a rather interesting take on the situation, reasoning out that the prices would fall to around $70 per barrel next year rather climb higher.”
→ Barclays predicts oil price to reach $70 next year
Pirates of the Caribbean, no, Asia
A total of 64 incidents of piracy and armed robbery against ships were reported in Asia during January-September 2018, a 3 percent increase compared to the same period for 2017, ReCAAP ISC said in its latest report.
The Urge to Merge
There’s always talk about alliances, mergers, and takeovers. Between shipping companies, but also between logistics providers. Now there may be another combination of the two:
“CEVA had rebuffed a full takeover bid from DSV, while at the same time giving CMA CGM the option to increase its stake to one-third of its shares.”
“An accompanying statement from CMA CGM suggested it may well take up this option, and a fully fledged takeover of CEVA could also happen”
“CEVA could be dismantled by CMA CGM, or its own management team, in the same way that Damco is by AP Møller-Maersk Group; if so, then, the freight forwarding assets – mainly contracts and staff – could be spun-off and presented to possible suitors.”
→ Market Insight: CEVA and CMA CGM – vertical consolidation the next step?
More on Capacity and Carrier Rates
“The decision by Asia-North Europe carriers to blank or suspend 11 head-haul voyages this month appears to have halted the slide in spot rates on the route, the SCFI component virtually unchanged at $731 per TEU.
However, if the 2M Alliance reactivates its AE2/Swan loop earlier than planned – on 5 December as suggested by Alphaliner – then spot rates could fall away quickly.”
→ Early AE2/Swan return would add to the pressure on Asia-Europe carriers
“If there’s a serious drop of Chinese exports into the US, it will push China to find additional markets. There will be winners and losers but a re-balancing within Asia could be positive overall as more consumer markets develop.”
“Any big uptick in intra-Asia container volumes is likely to exacerbate port congestion across the region, however.”
→ China-US trade war could be the founder of a feast for intra-Asia box traffic
“MSC has announced it will fit some 50,000 of its dry containers with smart technology over the next few months.”
“The carrier said the technology would be provided by Traxens, the French container tracking start-up that has received investment from CMA CGM and more latterly MSC. Both carriers have a seat on the Traxens board.”
“The Traxens system has three key elements: first, a tracking and environment-monitoring device permanently fitted to the box, which records data such as GPS position, temperature, impacts, movement, and vibration.”
→ MSC opts for Traxens technology to create 50,000 'smart' containers
“Rolls-Royce is partnering with Intel to conquer the immense amount of data required to make autonomous container ships a reality”
“The data required to facilitate autonomous ships is greater in size and complexity than that necessary for autonomous road vehicles because of the increased variability of the environment.”
→ Rolls-Royce teams up with Intel on autonomous ships
“Energy innovation in shipping is not confined to main propulsion systems. Norsepower has installed its Flettner Rotor Sail Solution on three ships of different types – one Ro-Ro (roll-on, roll-off), one cruise liner and one tanker – and is documenting the resultant fuel savings.”
→ Planes, Trains and Automobiles – the Electric Remake
Saving the Best for Last
Great news last week: we were recognized as one of the 100 most innovative and disruptive companies in freight! A proud moment for all of us.
At the end of last week, our founder Purnendu Shekhar wrote a post about in which he looked back, but also looked forward.
“I love seeing their passion every day. Everybody is working closely together to make shipping goods across the globe easier, more efficient, and more transparent.”
→ Cogoport Recognized in the Freight.Tech 100
We were also mentioned in the announcement by Freightwaves:
“From on-demand trucking to blockchain, loadboards and freight matching, the list of companies bringing innovative technologies to the freight industry is growing by the day, which makes the 100 that have made the cut to be honored by the FreightWaves Research Institute as part of its inaugural Freight.Tech 100 all the more special.
Cogoport is an example. The company believes that booking ocean freight should be as easy as booking a hotel room. Its platform provides instant quotes, helps choose the right ocean carrier, allows for the uploading of documents and manages all shipments”
→ From upstarts to traditional powers, the Freight.Tech 100 represents all that is innovative about freight
Photo by Tim Easley on Unsplash