July 05, 2324 8:00 pm

Heating Up

Maersk Raises Rates, Vietnam Benefits From China, And Labor Seeks Support. Your weekly All-Ways round-up of Supply Chain news.
Maersk Maximizes
Amidst the high demand for ships, charter rates have soared to $150,000 per day, reflecting the buoyant market, a trend which has been embraced by Maersk, which has agreed to charter TS’s 7,000 TEU newbuild, Kota Valparaiso, for three months. This follows CMA CGM's recent record-setting charter of the sister vessel, Kota Callao, for $100,000 per day, underscoring the increasing value of these vessels.

Following their short-term charters with CMA CGM and Maersk, these ships will enter long-term charters with Pacific International Lines, showcasing sustained demand. Even earlier, CMA CGM had chartered TS Lines' TS Dubai for $80,000 per day, highlighting the ongoing positive trend.

TS Lines initially commissioned these ships to expand into long-haul routes during the peak of the Covid-induced market. Despite market corrections, these vessels have found lucrative opportunities, with potential deployment on Asia-South America services where rates have nearly reached two-year highs.

The Other Nearshore
Mexico is not the main beneficiary of reduced U.S. imports from China due to "near-shoring." Instead, it’s Vietnam that is benefiting the most.

China's share of U.S. trade has significantly dropped and could fall below 10% this year, a result of former President Trump's tariffs on Chinese imports and President Biden's continuation and expansion of those measures, particularly in technology and electric vehicles.

Although the U.S. trade deficit with China has decreased, the overall deficit has grown, especially with Mexico and Vietnam. Deficits tend to shift and appear elsewhere, rather than disappear entirely.

Support Before Strikes
A broad coalition of U.S. manufacturers, distributors, retailers, and trade groups is urging the Biden administration to help restart stalled contract negotiations between the International Longshoremen’s Association (ILA) and maritime employers.

They sent a letter to the White House, signed by 161 organizations, asking for support to reach an agreement before the current contract expires on September 30.

The ILA's negotiations stalled due to a dispute over Maersk's installation of an auto-gate system. The letter warns that cargo, which had shifted to the East Coast during West Coast labor disputes, is now moving back as the busy peak shipping season approaches.

Although President Biden and the Democrats are generally labor-friendly, the ILA is considering other political options for 2024. ILA President Harold Daggett criticized Biden's intervention in West Coast negotiations and has met with Former President Donald Trump to discuss future plans.

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