Friday, January 10, 2020

Shades of the Beatles as Yellow Submarine Story Leads the Weeks Logistics Snippets

A Chance to Catch Up on the Smaller Items You May Have Missed
Shipping News Feature

AUSTRALIA – This week's short pieces of freight and logistics news bring an announcement that a three-year project to design, manufacture and test the country's first yellow submarine will begin next month. The fully reconfigurable Australian Research Experimental Submarine (ARES) will be used for hydrodynamic and crew efficiency testing of future submarine designs. A full business case is still being finalised ahead of the kick-off meeting in Adelaide, South Australia, in February.

The project is collaboration between the University of Adelaide, University of South Australia, Flinders University, TAFE SA and the University of Tasmania’s Australian Maritime College with Defence support from DST Group. The four industry partners for the project are SAAB, ASC, Dassault Systemes and MOOG Australia.

ARES received A$150,000 in Defence Innovation Partnership funding from the South Australian Government last month to boost a A$350,000 in kind contribution from participants to fund the project’s first year. An estimated A$3 million will be needed to complete the three-year project. The autonomous submarine will be used to test hydrodynamics, how a submarine behaves underwater, to aid in the design and safe operation of new submarines globally.

SINGAPORE – US – WORLDWIDE – Equipment leasing group SeaCube Containers LLC, which operates in 192 depots worldwide, recently expanded its inventory with 5,000 new 40-foot high-cube containers refrigerated by Carrier Transicold PrimeLINE® systems. SeaCube’s newest acquisitions include 4,000 containers equipped with PrimeLINE refrigeration units and 1,000 PrimeLINE ONE™ refrigerated containers.

Over the past year SeaCube has acquired 2,950 PrimeLINE ONE refrigerated containers, the most of any container leasing company. PrimeLINE ONE refrigerated containers are produced in a streamlined manufacturing process by Carrier Transicold jointly with Dong Fang International Container Co., Ltd. (a member of COSCO group.)

SPAIN – US – UK – Wesco Aircraft Holdings Inc, which offers supply chain management services to the global aerospace industry, has been acquired by an affiliate of Platinum Equity in a deal worth circa $1.9 billion. As of January 9, 2020, Wesco Aircraft is privately held, and shares of Wesco Aircraft Holdings Inc. common stock have ceased trading on the New York Stock Exchange. The company has joined Platinum Equity portfolio company Pattonair which provides similar services.

Pattonair is currently based in the UK, but the new operation which will be headquartered in Valencia following closing, becomes a $2.4 billion business with a global footprint in 17 countries and more than 4,000 employees. The combined company will serve more than 8,400 customers, including many of the world’s leading aerospace and defence original equipment manufacturers and their subcontractors.

The combined operation will maintain a stock of over 644,000 units used in the production of commercial and military aircraft, including airframes, engines, hydraulic units, actuation systems and landing gear. Todd Renehan, Wesco Aircraft’s Chief Executive Officer since 2017, has been named CEO of the combined company, and Wayne Hollinshead, Pattonair’s Chief Executive Officer since 2011, has been named President.

CHINA – EUROPE – BIMCO has pointed out this week that the Shanghai Containerized Freight Index (SCFI) spot rate for transporting one TEU from Shanghai to Europe was up 41% to $1,124 per container on 3 January 2020, its highest level since December 2016, rising from $800 on 6 December 2019.* The China Containerized Freight Index (CCFI), which covers both spot and long-term contractual rates in 10 Chinese ports, has similarly risen by 10% to 1,096 index points in the same period.

BIMCO says the rate jumps are not however due to the incoming IMO sulphur cap prompting carriers to impose new bunker adjustment factors, rather to the usual seasonal increases. In the past five years the SCFI Europe spot rate has averaged $1,063 per TEU in the first week of the year. The spot rate on 3 January 2020 is thus only $60 above this five-year average.

A $60 increase will not be enough to fully offset the cost of IMO 2020 compliance, especially as the price of compliant fuels have risen as the sulphur cap has entered into force. The new BAFs have proven hard to implement due to a lack of transparency in the calculations as well as poor market fundamentals. *Rate has since started dropping back slightly.

UK – One company which is preparing for the post Brexit situation, regardless of deal, is Walker Logistics, which last year entered a partnership agreement with German-owned Limal GmbH, an international sales and fulfilment services provider based some 40 miles north of Hamburg. Using each other’s storage facilities means clients can ship in bulk and store goods for distribution.

Walkers say it has noticed a trend, particularly among American-owned companies, to appoint UK-based fulfilment specialists to manage the storage and delivery of orders for the British market. Previously these companies have located their European inventory across the Channel but fears over possible customs complications are changing the attitude to ensure goods lie closer to their ultimate destination.

UK – A new daily rail service has been introduced at Hutchison’s Port of Felixstowe. The new connection, the 36th daily rail service from the UK’s largest container port, runs to Maritime Transport’s newly opened East Midlands Gateway facility. The new service caters for ever-growing demand for rail at Felixstowe and follows hot on the heels of two new rail services to iPort Rossington and Hams Hall introduced from the port in the latter part of 2019.

East Midlands Gateway is Maritime Transport’s first strategic rail freight interchange. Located alongside the M1 motorway the 17-acre site serves as a regional distribution hub. When fully operational it will be capable of handling up to sixteen 775 metre-long freight trains per day. Maritime also operates rail terminals in Tamworth, Tilbury, Wakefield and Trafford Park with over 30 transport depots throughout the UK.

Other destinations served by rail from the Port of Felixstowe now include Glasgow, Manchester, Liverpool, Leeds, Teesport, Birmingham, Birch Coppice, Doncaster, Selby, Hams Hall, Wakefield, Ditton (Widnes), Rotherham, iPort Rossington and Cardiff.

Photo: All together now…