Newsletter – February 2017

Newsletter – February 2017




Maersk Makes Annual Loss

Maersk Line reported an annual loss of $376 million for 2016, helping drag parent Maersk Group to a $1.9 billion loss for the year, although significant impairments at Maersk Drilling and Maersk Supply Service also contributed.

Despite this loss Maersk line are forecasting that its 2017 profit will be a $1 billion improvement on the negative 2016 results, which CEO Soren Skou described as “unsatisfactory.”

Global demand for seaborne container transportation during 2017 was expected to increase by 2 to 4 percent, and Maersk Line believed that its earnings this year will be driven up by rising freight rates. Maersk are claiming that they see encouraging signs for 2017, and for this reason they feel comfortable with improving their profits by $1 billion over the 2016 result.

Although the rates have improved recently for the company, for most of 2016 freight rates were declining, leading Maersk Line down the familiar path of rising volume and declining revenue.

Maersk said in its results statement that the company’s revenue for 2016 of $20.7 billion was 13 percent lower than the revenue achieved in 2015, driven by an 18.7 percent decline in average freight rates to $1,795 per 20-foot-equivalent unit. Not even a 9.4 percent increase in container volume to 10.4 million TEU could offset the effect of poor rates that fell to record levels in the first quarter of 2016.

Liner shipping companies such as Orient Overseas Container Line and the three Japanese carriers all reported strengthening fourth quarter demand in 2016 and Maersk Line was no different. Maersk said demand growth was low in the first three months of 2016 but improved in the second half, especially in the fourth quarter. 

Regarding its acquisition of Hamburg Süd, expected to be completed by the end of 2017, Maersk said it would enable the liner division to offer an improved value proposition on its north-south trades and in the reefer segment. Hamburg Süd will continue to operate as a separate brand and will keep its local organizations and headquarters in Hamburg.

Maersk highlighted the high inflow of new container vessels in the last part of 2015 and in the early part of 2016 that continued to hurt the container industry. The carrier said this added to the existing excess supply as global container demand remained subdued during the year, which led to significant downwards pressure on freight rates and industry revenues, especially in the first half of the year.

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Eastbound Vessel Space in Short Supply

Maersk Line have reportedly stopped booking export containers from Europe to Asia and the Middle East, according to market sources, while capacity is said to be extremely tight for other lines.

Maersk’s block on bookings runs until 27 March, but the situation will be reviewed on the 13th. The only cargo exemption is when a prior space commitment has been given.

A spokesman for Maersk said: “We can confirm that exceptionally high demand on North Europe to Asia trade has led to challenges with space availability and, consequently, to potential issues with the acceptance of bookings to our customers.

“We are currently reviewing all possible options to minimise this issue and thus reduce the impact to our customers’ business. We will stay in close touch with them to propose best options for securing the smoothest possible flows of their cargo.”

All carriers are congested beyond belief. It is thought that a lot of carriers are repositioning vessels for the alliances and are not running to their schedules.

Ocean carriers blanked an estimated one-third of all westbound voyages in the first week of the Chinese new year holiday at the end of January, and this increased to almost 50% of sailings for the second week.As a consequence, the respective eastbound voyages were also blanked – thought to be the main reason for the backhaul capacity crunch.

However, it appears likely that the tight booking situation on 2M alliance vessels has worsened with the perception that Maersk and MSC’s competitors will face some disruption from the reshuffle for the new alliances on 1 April.

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Export of Used Electricals and Electronic Equipment

The full responsibilities and requirements for shippers is set out in a Government regulations ‘The Waste Electrical and Electronic Equipment Regulations 2013’.

Electronics and Electrical Equipment (EEE) becomes Waste Electronics and Electrical Equipment (WEEE) if its holder discards it or intends to do so. The Environment Agency (EA) would judge this on a case by case basis. 

WEEE includes most products that have a plug or need a battery. There are ten broad categories of WEEE currently outlined within the Regulations (Schedules 1 and 2), namely:
-Large household appliances e.g. fridges, cookers, microwaves, washing machines and dishwashers. 
​-Small household appliances e.g. vacuum cleaners, irons, toasters and clocks.
​-IT and telecommunications equipment – e.g. personal computers, copying equipment, telephones and pocket calculators.
-Consumer equipment e.g. radios, televisions, ​hi-fi equipment, camcorders ad musical instruments.
-Lighting equipment e.g. straight and compact fluorescent tubes and high intensity discharge lamps.
​-Electrical and electronic tools – e.g. drills, saws and sewing machines, electric lawnmowers.
​-Toys, leisure and sports equipment e.g. electric trains, games consoles and running machines. ·
​-Medical devices.
-Monitoring and control equipment e.g. smoke detectors, thermostats and heating regulators.
​-Automatic dispensers e.g. hot drinks dispensers and money dispensers​.
The following conditions are set out in the directive for shipping used electronics (Regulation 54); ·
​-PAT / Functionality testing certificates from a certified electrician. A sticker should be on each item and a list of each item and the result of testing. ·
​-A copy of the Certificate and packing list taped to the inside of the container door (Right Hand Side)
​-Packaging – Insufficient packaging which looks as though may cause damage to goods in transit is an indication that the items are waste. At least, will lead enforcement agencies to make further enquiries. ·
​-If electrical items are new and boxed, a copy of the receipt should be also taped to the inside container door.

This directive (articles 24&25) also states that any costs when a shipment is found to be container illegal WEEE with be for the responsibility of the shipper.

As per the website, If you fail to comply with the waste electrical and electronic equipment (WEEE) regulations, you can be prosecuted and fined up to £5,000 at a magistrates course, or get an unlimited fine from a Crown Court.

For further information, please see the Health and Safety Executive website;  Alternatively, please feel free to call us on  +44 (0) 1274580049  or email us at