Category: Logistics

Much like the road freight industry in the U.S., its European counterpart suffers from similar issues with fragmentation and low visibility into logistics operations, brought about by the lack of digitalization across large swathes of the market. 

Through its customs regulations, the European Union has done away with the need for border customs by enabling uniform regulations across its member nations, there are a significant number of languages and work cultures that European supply chains need to contend with, putting a strain on movement in an industry that runs heavily on interpersonal relationships between stakeholders. 

InstaFreight, a Berlin-based digital freight forwarding company, is ushering in greater efficiency within the European logistics ecosystem by connecting shippers and carriers on a digital platform. The company acts as an actual freight forwarder by finding the right carrier without multiple subcontracting.

“We are not a freight exchange platform but rather the contractual party, much like a classical forwarding company. What we do differently is that we use our technical and digital expertise to improve everything related to freight transport,” said Philipp Ortwein, Co-Founder and Managing Director of InstaFreight. 

InstaFreight aggregates over 10,000 carriers on its platform, making it easy for shippers to stick to InstaFreight for their capacity needs – however large they may be. “The first thing we did was to consolidate supply and demand, and then proceeded to make sure everything is digitalized for the shipper,” said Ortwein. “For instance, our pricing algorithm lets shippers get their price quotes digitally within seconds. We have a detailed understanding of which carrier drives on which lanes and of the equipment they have available. This enables us to quickly find the suitable carrier.”

The pricing algorithm constantly learns from data points and helps the company recover smarter while guaranteeing fair prices based on daily conditions. Once the quote is accepted, InstaFreight’s carrier matching tool suggest carriers based on their experience in the lane and the availability of suitable equipment from which a suitable carrier is selected. 

InstaFreight also provides shippers with a track-and-trace solution, allowing them to locate their freight in real-time as it moves to its destination. The startup has also built a control tower solution that is accessible by shippers who move high freight volumes. This solution helps shippers coordinate several transports on an all-in-one interface, eliminating the need for them to call up individual dispatchers to know their freight whereabouts. Shippers can not only use this and other functions via the web-based interface but also via an API.

“We have several data sources to get the track-and-trace information. The primary one though is the on-board telematics system,” said Ortwein. “We use the location-based data off the GPS on the truck to calculate the estimated time of arrival and inform shippers proactively.”

Other sources for track-and-trace are data gleaned from InstaFreight’s application and through personal communication with the registered dispatchers. 

InstaFreight considers traditional freight forwarders such as DHL, Kuehne & Nagel and DB Schenker to be their competitors in the market, but does better through the digitalization layer it offers to its customers. The company currently has over 2,000 active customers on its platform, with them citing access to new capacity, end-to-end transparency and hassle-free transport handling to be the primary reasons for using InstaFreight. 

The
CMA CGM Group is expanding its logistics footprint by investing in Wing, an
urban e-commerce logistics operator.

The container shipping giant,
which is headquartered in France, has “taken a position” in Wing for an
undisclosed sum via its investment fund, CMA CGM Ventures.

“At the same time, CEVA
Logistics, a subsidiary of CMA CGM that joined the Group this year, entered
into an ambitious industrial and commercial partnership with Wing,” reported
the liner and logistics major.

“The two companies will thus
implement cross-selling initiatives and CEVA Logistics will make space
available to Wing in its warehouses.”

CMA CGM refused to disclose the
size of the investment or shareholding in Wing when approached by FreightWaves.

The French carrier claimed the deal was “a concrete illustration” of the synergies between CMA CGM and CEVA, the third-party logistics (3PL) services provider purchased in April that some analysts believe is putting pressure on CMA CGM’s liquidity and adding to its already high debt levels.

CEVA was ranked 13^th among global 3PLs by revenue in 2018, according to Armstrong
& Associates.

CMA CGM said it would support the
development of Wing “by forging with it an ambitious financial, industrial and
commercial partnership,” adding that the investment in Wing would benefit both
Wing and CEVA customers.

“This merger will enable the two
companies to offer their respective customers innovative new services with high
added value in the field of urban logistics,” said the statement. “

Wing, founded in 2015, currently
provides urban supply chain solutions to more than 300 e-retailers in leading
cities in France by helping them optimize their e-commerce logistics.

“With just a few clicks from an
online platform, Wing customers see a courier show up to pick up orders sold on
the internet,” said a CMA CGM statement. “These are then deposited in a
logistics warehouse where they are packaged and shipped. In less than 48 hours,
orders are delivered to the end customer.”

Nicolas Sartini, CEO of CEVA
Logistics, said the purchase would help realize the digital innovation strategy
of Rodolphe Saadé, chairman and chief executive officer of the CMA CGM Group.

“The Group also confirms its
willingness to offer its customers ever more innovative services throughout the
logistics chain,” he added.

Jean-Baptiste Maillant, Founder and President of Wing, said CMA CGM’s involvement would help Wing develop its long-term vision. “Their very strong development in logistics provides us with important synergies to offer a complete and innovative service to our respective customers,” he added.

More articles by Mike

An object’s
center of gravity is a matter of physics. In matters of business, by contrast,
there are man-made centers of gravity. These are governed by the desire to make
money or, at least, to avoid losing money. Logistics is the study of the
constraints of time, physical space and location that arise when moving
freight/people/information from origin to destination. Interestingly, those
logistical constraints can be matters of physics too. In particular, transportation
costs can make or break a sales transaction.

This is
especially true when the buyer and the seller are some physical distance apart
with challenging terrain and/or bodies of water in-between. The terrain and/or
bodies of water will determine the nature of the infrastructure available to
for-hire carriers. The buyer-seller transaction is possible if a carrier is
available to move the item across the available infrastructure. But the
transaction is not possible if the cost of carriage, when added to the item’s
sale price, is simply too high for the buyer. This may be due to lack of
competition in the for-hire carrier market or to the physical constraints of
the distances involved given the current state of technology.

Logistical constraints
need to be managed in order to control the costs of doing business. Centers of
gravity exert the force of attraction. When market conditions change by a large
enough magnitude, business activities will be attracted to a new center. Only
an equal and opposite force can fight this gravitational pull. What happens
when these centers of gravity change and what does it take to maintain current
ones in the face of such change?

Consider the
current U.S.-China trade war. The United States has chosen to fight this war primarily
with import tariffs. As a result, all U.S. supply chain managers who deal with the
inbound flow of China’s tariff-targeted imports know that the landed cost of these
items will be higher. It is not just the tariff-adjusted sale price of the item
that is higher, but also the cost of customs compliance.

Some supply
chain managers have already adjusted away from China, choosing instead to
source from nearby Taiwan, Vietnam and/or South Korea. On the export side, U.S.
food and agricultural products are good cases in point. From a peak of $25
billion in 2014, China-bound exports fell to about $9 billion this year. The
slide accelerated beginning in 2017 when the first serious talk of a trade war
began. U.S. tariffs on China were met by countervailing tariffs by China on U.S.
food and agricultural exports.

In a similar
fashion to outbound China supply chains the inbound China supply chains of food
have been shifting away from the United States to other countries in this
hemisphere such as Canada for wheat and lobster, and Brazil for soybeans.

The effect
of this shift can be seen sharply at the Port of Oakland, since about half of its
export volume is in agricultural products. With its proximity to California’s
farm sector it is an important exit point to Asia’s food markets. The port has
seen a rise in shipments to Taiwan, Vietnam, South Korea and Japan as U.S. farmers
sought to avoid China’s tariffs on their products.

A consequential
shift in the center of gravity might occur should enough manufacturers of low-cost
consumer goods move beyond the Far East into countries like India and
Bangladesh. If these countries replace the Far East as the manufacturing center
of gravity, it is possible that some transport routes might avoid the Malacca
Strait heading to U.S. West Coast ports and use the Suez Canal and the
Mediterranean Sea heading to U.S. East Coast ports. If the new pool of low wage
workers is to be found in and around India this possibility must be considered.
In fact, A.T. Kearney’s report this year on U.S. trade policy and reshoring
noted that the move of manufacturers from China toward India has been in motion
long before the current trade war.    

Ted Stevens
Anchorage International Airport (ANC) is another logistical center of gravity.
In this case it is a gateway to the United States for outbound Asia air cargo.
About 80% of this traffic lands at the airport for refueling. Why should that
be when these air cargo planes are quite capable of overflying Anchorage? It
comes down to what ANC’s management team calls keeping their airport “sticky.”

Anchorage
has both geographic and operational advantages that are unique along the “great
circle” between Asia and the lower 48 states. Great circles are the shortest
distance between two points on a sphere. Geographically, Anchorage is just
about the distance (i.e., 4,400-4,800 nautical miles) a fully loaded jumbo or
wide-body U.S.-bound air cargo plane can go from, say, Hong Kong. So, if the
intent is to fill the planes in Asia with more revenue-earning cargo and less
cost-inducing fuel, it makes sense to land and refuel in Anchorage. It also
helps that ANC works hard to keep its landing fees and fuel charges very low by
industry standards. ANC is centrally located at 9.5 hours flying time to 90% of
the industrialized world. This makes it an excellent air cargo trans-shipping
point.

This operational advantage is accentuated by ANC’s innovative air cargo transfer program. Belly-to-belly transfer of U.S.-bound cargo between a foreign air carrier’s planes or between those of two different foreign air carriers is illegal at any other airport in the continental U.S. In fact, ANC’s management team has had to work hard to convince skeptical Asia-based carriers that this quasi-cabotage activity is quite legal.

What makes
it hard to believe at first is why the United States would offer such a
unilateral trade benefit to countries like China and Japan. Basically, Alaskans
can thank the advocacy of the late Sen. Ted Stevens when he wrote this unique operation
into a re-appropriation bill for the Federal Aviation Administration (FAA) back
in the mid-1990s. At ANC, airport managers know that their air carrier customers
can literally fly away, so they must be imaginative to maintain the airport’s
center of gravity against other U.S. and Canadian airports looking to attract
Asia-U.S. traffic.

Strategy is
typically informed by some vision of the future. The further into the future the
more the uncertainty. But uncertainty needs to be confronted and not avoided by
simply limiting mission statements and strategies to five- to 10-year
timeframes. Sticking with Alaska and thinking ahead over the next few decades,
consider the fact that the Arctic is steadily warming and its ice cap is
melting. Therefore, imagine the day when the Northwest Passage between the
Beaufort Sea and Baffin Bay becomes navigable to deep draft ocean vessels on a
year-round basis. Centers of gravity for ocean freight may well change. In this
scenario, ports along the Aleutian Islands archipelago (e.g., Adak and Dutch
Harbor) may become strategically important as bulk and container trans-shipping
points. Ocean vessels heading along the “great circle” between Asia and U.S.
West Coast ports could stop at such a port and switch cargo with vessels
traveling routes between Asia and Europe via the Northwest Passage.   

Singapore’s
importance in trade began in the early 19^th century when the British
East India Company established it as a port of call in the spice trade. It has
worked hard to maintain its center of gravity in container trans-shipping. The strategic
question for the future is “will global climate change give Alaska a new place
in the sun?” Who knows – one day a port out in the lonely Aleutians just might
become the “Singapore of the North.”

The
European Union (EU) has agreed to a Brexit extension of three more months
rather than see the United Kingdom plunge out of the bloc with no deal on
October 31.

After a meeting of European ambassadors, Donald Tusk, president of
the European Council, announced 27 EU member nations had agreed to Prime
Minister Boris Johnson’s request for an extension.

“The EU27 has agreed that it will accept the U.K.’s request for a new flextension until January 31, 2020,” he tweeted. “The decision is expected to be formalized through a written procedure.” 

The latest extension removes the immediate threat of a no-deal Brexit on the scheduled October 31 departure date, an outcome the freight industry expected would cause supply chain chaos across northern Europe.

The
extension until January 31 announced this morning (October 28) includes an
option for the U.K. to leave the EU earlier if Parliament approves the
withdrawal agreement Johnson agreed to with the EU earlier this month.

Under the Johnson agreement, the whole of the U.K. will leave the EU customs union, enabling the U.K. to agree to trade with other countries in the future. A customs border between Northern Ireland and the Republic of Ireland will be established legally, but in practice goods crossing this border will not be checked. Rather, a customs border will be established between Great Britain and the island of Ireland.

Johnson pledges undone

Johnson
had previously pledged the U.K. would Brexit on October 31, “no ifs, no buts …
do or die”. He is now widely expected to join opposition parties to push for a
December general election to break the Parliamentary impasse that blocked his
deal last week.

While Britain’s political deadlock continues, U.K. transport
bodies have welcomed the decision by the EU to extend contingency measures to
help reduce air and road supply chain disruption in the event of a no deal
Brexit, an outcome that remains possible despite the extension announced today.

The road haulage contingency measure, which was due to expire on
December 31, 2019, is now valid until the end of July 2020, while the aviation
access contingency has been extended from March 2020 to October 24 2020. 

“The extension of the No Deal contingency access is welcome news
for logistics companies currently preparing for Brexit and is something which
FTA [the Freight Transport Association] has been lobbying for on behalf of its
members,” said Sarah Laouadi, FTA’s European Policy Manager.

“Both agreements will allow some degree of continuity, but it is clear that permanent solutions should be reached to enable businesses to plan efficiently for long-term business stability and avoid yet another cliff edge.”

Brexit labor shortages

As previously reported in FreightWaves, while political machinations continue in the U.K., shippers are already relocating distribution and storage capacity to continental Europe in expectation that Britain’s eventual exit from the EU will reshape Europe’s logistics landscape.

As well as losing business to rivals overseas, U.K. logistics
companies are also struggling with labor shortages as the number of EU
nationals immigrating to the U.K. for work plummets.

In a new publication titled FTA’s Logistics Skills Report 2019, the
FTA notes that
declining EU net migration has
contributed to a 43% rise in job vacancies in the transport and storage
industry over the past 24 months.

“The logistics sector is facing serious challenges in the recruitment and retention of labor: 59,000 HGV drivers alone are urgently needed to keep just to keep operations afloat,” said Sally Gilson, Head of Skills Campaigns at FTA.

“Businesses
within the logistics sector are reliant on access to EU workers to help fill
job vacancies; these workers currently constitute 13% of the entire logistics
workforce.”

According to the report, the number of EU nationals moving to the
U.K. for work is now more than 50% lower than its peak period between June
2015-June 2016.

“With the Government now investigating an Australian Points Based
System, the focus for future immigration is still focused on higher skilled
workers,” said Gilson.

“FTA is urging Government to build its future immigration policy
on what the U.K. economy needs to remain functional – not arbitrary academic
levels and minimum salary requirements.”

 More FreightWaves articles by Mike

Maersk said its goal of carbon-free shipping will be best reached with new types of marine fuels based on alcohol, renewable natural gas and ammonia. It is urging refiners and fuel producers to start research into how these fuels can be produced at scale to reduce the shipping industry’s contribution to greenhouse gas emissions.

The world’s largest shipping fleet by size, Maersk is also the largest producer of greenhouse gases in container shipping. The company’s total carbon dioxide emissions reached 39.165 million tonnes last year, up 9% from a year earlier, according to Maersk’s 2018 corporate social responsibility report. 

Total fuel use rose 16% from a year earlier due to having a larger fleet and more operating days for its vessels.

But the Copenhagen-based company has reduced carbon emissions 41% relative to its 2008 baseline and is “10% ahead of the industry average” in reducing greenhouse gas emissions. By 2030, it plans to cut carbon emissions by 60% relative to 2008 levels. 

Maersk has also set the goal of zero carbon dioxide emissions by 2050. The International Maritime Organization is tasking container shipping overall with cutting emissions by half relative to 2008. Shipping is responsible for up to 3% of the world’s greenhouse gas emissions, Maersk said. 

Carbon emissions are becoming a more important issue across ocean freight’s customer base. Kuehne + Nagel, the largest ocean freight forwarder in the world, said it will offer a less-than-container load service in 2020 that will be carbon neutral. By 2030, Kuehne + Nagel expects that its asset-based partners in ocean, air, and land transportation will also be carbon neutral.      

In a study done with ship registry Lloyd’s Register, Maersk said the “best-positioned fuels for research and development into net-zero fuels for shipping are alcohol, biomethane and ammonia.” 

Maersk Chief Operating Officer Soren Toft said, “These three are the right places to start. Consequently, we will spend 80% of our focus on this working hypothesis and will keep the remaining 20% to look at other options.”

Each of the fuels presents different opportunities and challenges. Alcohols, both ethanol and methanol, are easily handled and can be created from renewable resources such as biomass or renewable hydrogen. 

Methanol is already being used by some ships as a fuel. Yet it also requires retrofitting ships with larger fuel tanks since alcohol fuels are less energy-dense than regular marine fuel. 

Natural gas from renewable resources such as biomass also offers an additional pathway to carbon-free shipping. But the marine fuel industry needs to ensure against “methane slip,” the emission of unburned methane, which is a major source of greenhouse gas emissions.

Ammonia can be produced from renewable electricity and its energy conversion rate is higher than that of other renewable fuels. But ammonia is highly toxic, making it more difficult for crews to handle.

As current marine engine technology can handle these fuels, Toft said “the main challenge is not at sea but on land” as the marine fuel industry must “produce and distribute sustainable energy sources on a global scale.”

“We need to have a commercially viable carbon neutral vessel in service 11 years from now,” Toft said. 

Forget the traditional fourth quarter peak; there will be no upturn in air cargo markets for the next three quarters, according to Kuehne + Nagel International (K+N) chief executive Detlef Trefzger.

“At the moment I would say that the decline will not stop this year…or the first two quarters in 2020,” he added. “I would assume that next year we might have a flat market versus 2019.

“What happens then in 2021 and following years we will have to see; it’s too early to say.”

Speaking during a 22 October conference call with analysts after the Switzerland-based forwarder announced a downturn in its third quarter 2019 air freight performance, he said only growth in global gross domestic product (GDP) could provide the trade expansion momentum sufficient to persuade shippers to use air freight for more shipments.

However, he also noted that bearish air freight markets in 2019 should be viewed in context. “2018 was an exceptional year,” he said. “We saw growth in our network of 20% and more, organically. Which is also not normal.”

By contrast, in 2016 and 2017, 2% market growth and 4% to 5% growth for K+N was viewed as normal. “So, obviously markets have to rebalance again,” he added. “And for sure (the weaker performance of air freight markets this year is) also a reflection of all the trade discussions and trade noise that are ongoing.”

As reported in FreightWaves, K+N’s ocean freight and land transport units both made third-quarter gains, helping to offset the downturn in air freight markets.

The Swiss logistics giant’s third-quarter earnings before interest and tax (EBIT) rose 16% year-on-year to CHF283 million ($287.2 million), while net turnover fell 1.1% to 5.23 billion Swiss francs in the period.

K+N (SWX: KNIN) was the world’s second-largest global third-party logistics provider after DHL Supply Chain & Global Forwarding by revenue last year, according to Armstrong & Associates. And despite the downturn in air freight, its results for the first nine months of 2019 suggest it is well on its way to maintaining that position this year as well as reaffirming its position as the world’s largest ocean forwarder.

Net revenue of CHF15.8 billion over the period was 3.1% higher than a year earlier, while EBIT rose 6.6% to CHF794 million. The forwarder said organic net turnover growth amounted to 4.3%, foreign exchange effects had a negative impact of 2.9% and acquisitions had a positive effect of 1.7%.

“Against the backdrop of consistently tense global markets, Kuehne + Nagel once again delivered very solid results,” said Trefzger. “In Seafreight and Overland in particular, our focus continued to be on customer service, cost efficiency and digitalization.”

Seafreight, K+N’s key revenue earner, saw an increase of 7.3% year-on-year to CHF5.6 billion in the first nine months, with EBIT up by 10.2% year-on-year to CHF357 million over the same period.

“Seafreight posted a very solid net turnover growth and once again improved its performance in the third quarter,” said a K+N statement.

“Kuehne + Nagel grew significantly in a stagnating overall market and, with 3.67 million standard containers (TEU), the group transported 152,000 units more than in the same period of last year (up 4.3%).”

The company said the main success drivers of its Seafreight unit were a “selective growth strategy” and “effective cost management.”

More articles by Mike

Shippers and container lines will likely settle the “who pays how much” dilemma of new low-sulfur IMO 2020-compliant fuels in much the same way as they agree on freight rates: They will simply negotiate a price both parties can live with.

That is the view of a growing number of market and fuel experts as box shipping stakeholders face the estimated $11 billion bill due next year because of the introduction of low-sulfur fuels that become mandatory under International Maritime Organization rules on Jan. 1.

Patrik Berglund, CEO of Xeneta, an Oslo-based ocean freight rate benchmarking and market analytics platform, sees no precedent to suggest lines will succeed in billing customers for the full higher cost of the new low-sulfur bunkers. Rather, he believes the market will determine who pays how much.

He argues that oil prices are currently not at historically high levels while ocean freight rates in the current slack season are tumbling on key trades.

“I think the notion of increased costs to run operations for carriers, equals increased rates for shippers, is flawed,” he said. “There’s no historical evidence to support this.”

“Therefore, if higher fuel costs get passed on to shippers in today’s market, we wouldn’t have rate levels that are outside of anything we normally have from market fluctuations due to shifting supply/demand balance,” he added.

No historical precedent

“Also, if you look historically, rates or costs for shippers do not move in correlation with oil price.

“It’s beneficial from the seller side to focus on cost increases as IMO 2020 regulations come into effect. But whether those costs can be passed on to the customers remains to be seen. The state of the market — the supply/demand balance — will be the key decisive factor.”

“Bewildered” shippers and forwarders have expressed confusion over the timing and transparency of new bunker charges already being introduced by container lines as they phase in the fuels. Shippers are particularly wary that container lines might hike the fuel component of freight to compensate for bearish spot rates.

For their part, carriers have insisted they will only charge for the “extra cost of compliance.”

A recent survey of transport professions by Stifel shed some light on how container shipping stakeholders think the IMO 2020 bill will be divvied up. Responses suggested that shippers and retailers would bear the biggest impact, followed closely by consumers, then carriers and finally freight forwarders.

“As expected, capacity providers — ocean and surface transportation — tend to think shippers will eat the most cost, while shippers expect carriers to shoulder most of the burden,” reported Stifel. “What all parties did agree on, however, was that consumers will be among the most affected groups.”

No more than $500/FEU?

Among those with exposure to trans-Pacific container rates, roughly 20% of those surveyed by Stifel anticipated a drag of less than US$150 per FEU, 60% anticipated between US$150-$300/FEU and 20% expect US$300-$500 per box. “No one expects more than US$500,” said Stifel.

The problem faced by lines is how to explain to customers in a transparent way what exactly they are paying toward the higher cost of low-sulfur fuels.

For example, the price differential between low-sulfur, IMO 2020-compliant fuels and the noncompliant (unless ships are fitted with scrubbers) heavy fuel oil currently in use varies by $150-260 per ton at present. However, with so many factors such as vessel size, feeder costs, voyage times and regional fuel price differences, translating bunker price differentials into a price for a specific box movement for each customer is nigh on impossible.

“There are also many trades which are decidedly one way (and empty on the backhaul). Who pays for the extra cost for the empty leg?” asked Hans-Henrik Nielsen, global development director at Dubai-based CargoGulf, the NVOCC operating arm of Gulf Agency Group.

“Many lines may want to align the cost of such a move with the ‘freight paying leg’ and thus the cost would increase further.”

Nielsen believes lines will price the new fuel through a range of mechanisms in a bid to extract as much as they can from customers, much as they do with surcharges and spot freight rates.

Forget transparency

“Container operators have never been good at transparency — and who says transparency is needed?” he said. “The container operators will try to profit on this. They have always done so. War risks, bunker adjustment factors, etc. They cannot help themselves.”

He expects mainline operators to “try to play the political card or eco-friendly card,” which “they might even get away with” at first, but eventually he expects the market to decide pricing.

“I have no doubts that there will be concessions given to larger clients because, after a while, [more expensive fuel] is just a cost of doing business,” he added.

“You do not see Electrolux or Samsung complain about costs increasing for washing machines or flat screen tellies. There is no surcharge in the store to buy a TV. You walk in, there is a price on the telly which you accept or you don’t.

“Shippers and carriers are not friends — that dialogue was back in the old conference days. It is a client/supplier relationship. You can have excellent working relations, but one party does not owe an explanation to the other party for its pricing or choice/rejection of service.

“IMO 2020 will not go away — the political global decision has been made. So it is a cost of doing business. But after a while the surcharges will disappear. A surcharge by nature implies it will go away again when things normalise.”

FreightWaves articles by Mike

Costamare reported third-quarter 2019 results that beat analysts’ expectations as the container ship lessor said the supply of post-panamax ships is tightening going into the end of 2019. 

Costamare reported adjusted net income to common shareholders of $30.9 million for the third quarter, tripling the figure reported a year earlier. 

Adjusted earnings per share of $0.26 handily beat estimates of a $0.19-per-share profit in the quarter.

“During the third quarter of the year, the company delivered profitable results. As was the case in the previous quarter, net income and earnings per share more than doubled, boosted by increased charter rates and the addition of new ships,” said Gregory Zikos, chief financial officer of the Monaco-based Costamare. 

Including one-time expenses, the company reported $28 million in net income to common shareholders.   

Revenue from chartering container ships to liner operators came in at $123.6 million for the quarter, a gain of 35%.

The company said charter revenue was higher thanks to the addition of four new container ships to its fleet and a higher number of operating days for the company’s 60 vessels.

The company extended or entered charter agreements for four post-panamax vessels during the quarter, with an additional nine vessels below 5,500 twenty-foot equivalent units (TEUs) in capacity seeing charters extended.

Costamare said charter rates for the larger container ships continued to improve and there is “limited supply available for the post-panamax sizes” above 5,500 TEUs.

“We have 18 post-panamax ships coming off charter over the next year, which positions us favorably, should market momentum continue,” Zikos said.

U.K. police have launched a murder investigation after the
bodies of 39 people were found inside a truck container on an industrial estate
in southern England.

Police reported that everyone inside the container – 38 adults and one teenager – was found dead, adding that identifying the victims would be a “lengthy process” and their nationality was unknown.

The truck’s
driver, a 25-year-old man from Northern Ireland, has been arrested on suspicion
of murder.

Police believe the truck traveled from Bulgaria and entered
the U.K. on October 19 via the Welsh port of Holyhead, a major roll-on/roll-off
entry point for traffic from Ireland. The truck and bodies were discovered by
police shortly before 01:40 BST at Waterglade Industrial Park in Grays, Essex.

Early indications point to human trafficking by criminal
gangs as the cause of the deaths. Indeed, the National Crime Agency (NCA) has
sent officers to assist the investigation into the 39 deaths with a remit of
identifying any involvement by criminal gangs.

“We are working with partners
including Essex Police and Immigration Enforcement to provide specialist
support to urgently identify and take action against any organised crime groups
who have played a role in causing these deaths,” a
spokesperson told FreightWaves.

If the deaths are proven to be the result of people
smuggling, the words of Duncan Buchanan, policy director at the Road Haulage
Association (RHA), a U.K.-based trucking representative body, will be proven
sadly prescient.

Speaking to FreightWaves earlier in October, Buchanan predicted a rise in human trafficking and the targeting of trucking by criminal gangs ahead of the scheduled exit from the EU of the U.K. on October 31 after when checks at U.K. ports are expected to be tightened.

“We’re in a situation now that 40, 50, 100 miles away from the
main exit points of the EU there are migrants trying to get into vehicles,” he said. “It’s a
serious problem. It hasn’t gone
away; in fact, there has been an increase because the smugglers have been
saying Britain is going to be ‘closed’ after October 31.”

Seamus Leheny, Northern Ireland policy manager for the
Freight Transport Association (FTA), told the BBC that if the truck discovered
this morning is found to have originated in Bulgaria, getting into Britain via
Holyhead was an “unorthodox route.”

He added that, after reports of increased security checks at
Dover and Calais, “it might be seen as an easier way to get in by going
from Cherbourg or Roscoff, over to Rosslare, then up the road to Dublin”
and then across to Wales and into England.

Arrests related to human trafficking to the U.K. are certainly on the rise. On October 21 the NCA reported the arrest of five men suspected of hiding migrants in a cattle truck in a bid to smuggle them into the U.K. The arrests followed the discovery of 13 migrants, including one child, found in a hay compartment on a lorry carrying livestock in the port of Calais, France, on October 19.

“Border Force officers had
searched the vehicle acting on information from the NCA,” said an NCA statement. “After
the search the lorry driver, a British national, was detained by the French
authorities.”

Four more men, aged between 23 and 39, were then arrested by
the NCA on suspicion of facilitating immigration in a series of raids in
Romford and Brentwood, also located in the county of Essex, just a 30-minute
drive from where the 39 people were found dead this morning.

Richard Burnett, RHA chief executive, said the investigation
into the 39 deaths was ongoing and “our
thoughts are with the families of those who have lost their lives.”

He added, “Whatever
the circumstances of this tragedy it highlights the danger of migrant gangs’ people smuggling on lorries.”

A representative of the FTA added that migrants were
currently targeting all Northern European ports, not just Calais in France.

“FTA is calling for the
government to maintain close contact with its European counterparts to ensure
security systems are maintained,” added
the representative. “The
safety of both the drivers and migrants must be protected. Our thoughts are
with the families of those who have lost their lives so tragically.”

In a rare bit of good news for container shipping, Maersk said full-year operating earnings will come in better than originally forecast.

The world’s largest ocean carrier on Monday said earnings before interest, taxes, depreciation and amortization (EBITDA) for 2019 will be between $5.4 billion and $5.8 billion, compared with an earlier forecast of $5 billion.

The Copenhagen-based company increased its forecast thanks to better-than-expected performance in its ocean freight segment. Despite lower freight rates and slower global demand growth, ocean freight’s results were “driven by strong reliability and capacity management combined with lower fuel prices.” Maersk also said it saw improved margins in the terminal and towage business.

Maersk said third-quarter revenue came in at $10.05 billion, down slightly from a year earlier but up 4% sequentially.

EBITDA for the third quarter was $1.656 billion, up 22% sequentially and 45% from a year earlier.

Revenue for the first nine months of 2019 is coming in at $29.22 billion, up 1.3% from a year earlier with EBITDA of $4.25 billion, up 57% from a year earlier.

The third quarter of 2019 saw some of the best months for container shipping in terms of volumes thanks to front-loading ahead of the imposition of U.S. tariffs on Chinese goods. July and August import volumes of 1.96 million and 1.97 million twenty-foot equivalent units (TEUs), respectively, were the best months for North America this year, according to the National Retail Federation. It expects September volumes of 1.9 million TEUs, the third highest in 2019. 

But spot shipping remains stuck at multi-year lows due to overcapacity on major trade lanes and the slowdown in U.S.-China trade volumes. The Freightos Baltic Daily Index sits at a 15-month low of $1,240 per forty-foot equivalent unit. (SONAR: FBXD.GLBL)