SHIPPING NEWS

Maersk Imposes $1,000 Surcharge

In a significant move impacting global trade, Maersk, the Danish shipping giant, has announced a mandatory $1,000 surcharge per container for shipments heading to US and Canadian ports starting from March 2, 2024. This rate hike applies universally to all cargo types originating from India and West Asia, sparking widespread concern among shippers about the potential ripple effects on trade dynamics.

This decision comes against the backdrop of the ongoing Red Sea Crisis, which has already been causing considerable delays for cargoes destined for the US. Shippers fear that Maersk's move may set a precedent, prompting other shipping lines to escalate their fees, especially since the detour via the Cape of Good Hope adds an extra 15 days to the Asia-to-Europe-to-US route.

In December 2023, CMA CGM, another shipping behemoth, drastically increased its freight rates, with the Freight All Kinds (FAK) rate soaring to $4,750 per TEU, a significant jump from the previous $1,000. Maersk's decision to unify the surcharge across all container sizes is a departure from the norm, raising concerns among freight forwarders about the impact on costs, particularly for suppliers operating on a Free On Board (FOB) basis, where freight charges are typically negotiated in India.

The Red Sea Crisis has also had a profound effect on Indian exporters, with the extended journey around the Cape of Good Hope incurring additional time and costs. The surge in operational expenses, estimated at $1 million per detour, translates into an $18 million increase per vessel, highlighting the strategic and economic implications of regional instabilities on global shipping routes. As the industry grapples with these challenges, the root cause remains a lack of national capacity, underscoring the critical importance of the Red Sea as a linchpin in international trade.

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VIDEO OF THE WEEK

Log Barge Dumps

What the hell is that you ask? Well its a logging operation where harvested timber is transported via barges to a processing location. At the destination, the logs are unloaded by tipping or submerging the barge, causing the logs to float in the water. This method is efficient for moving large quantities of logs over water, reducing the need for land transportation and minimizing road wear.

GLOBAL TRADE SNIPPETS

BRICS to develop blockchain-based payment system to bypass the Dollar. The expanded BRICS has a combined population of about 3.5 billion people. The economies of the BRICS nations are worth over $28.5 trillion and make up roughly 28 percent of the global economy

Fears of marine disaster loom after fertilizer-laden ship sinks in Red Sea. The MV Rubymar, a cargo ship carrying about 21,000 metric tons of ammonium phosphate sulfate fertilizer, has sunk in the Red Sea following an attack by Yemen’s Houthi rebels.

Poland sees its most violent farmers protest yet as anger grows across Europe. Police used tear gas and said they detained over a dozen people and prevented the protesters from getting through to the Sejm, the Polish parliament.

TRADE NEWS

Iran Retaliates Against U.S. Sanctions, Seizes $50 Million in Oil

Nearly one year after Iran seized the Marshall Islands-flagged oil tanker, Advantage Sweet, for allegedly colliding with an Iranian vessel in the Gulf of Oman, Tehran has announced intentions to confiscate the tanker's cargo. The oil, valued at approximately $50 million and destined from Kuwait to Texas, U.S., is now targeted as compensation in the backdrop of "crippling American sanctions" against Iran. The Tehran Court of Justice's ruling, as reported by the Mizan news agency on March 6, aims to use the proceeds from the oil sale to aid patients suffering from epidermolysis bullosa (EB), a condition severely affected by the sanctions, particularly due to inhibited access to essential medications.

The case, brought forward by the Iranian NGO EB Home, accuses U.S. sanctions of causing "severe emotional and physical damage" to over 300 EB patients by blocking a Swedish company from exporting necessary treatment to Iran. The NGO has labeled the sanctions as "criminal and unilateral." In response, U.S. State Department spokesman Matthew Miller criticized the court's decision, demanding the immediate release of the tanker and denouncing Iran's maritime interference as a threat to global security and economy.

Iran's assertive action against the Advantage Sweet, carrying oil for Chevron to the U.S. port of Houston, escalates tensions further, especially after the U.S.'s seizure of the Suez Rajan, another tanker with sanctioned Iranian oil. The ongoing conflict not only underscores the strategic importance of the Gulf's waterways but also highlights the profound impact of sanctions on Iran's healthcare system, exacerbating the plight of "butterfly" patients, who suffer from the debilitating effects of epidermolysis bullosa, amidst an already challenging economic and medical landscape. Watch clip

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SHIPWRECK OF THE WEEK ⚓️☠️ 

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