Foss Charters the Earl W Redd from Tug Construction, LLC

Foss Maritime and Tug Construction, LLC are pleased to announce  an agreement for Foss to bareboat charter the Earl W Redd from Tug Construction. The Earl W Redd will  sail…

Foss Maritime and Tug Construction, LLC are pleased to announce  an agreement for Foss to bareboat charter the Earl W Redd from Tug Construction. The Earl W Redd will  sail...

Nimitz Carrier Strike Group Departs San Diego for Pacific Deployment

The Nimitz Carrier Strike Group left San Diego, Calif., on Saturday for a Western Pacific deployment, USNI News has learned. USS Nimitz (CVN-68) left its pier at Naval Station North Island at around 8 a.m. Saturday local time, according to ship spotters and headed out into the Pacific. In a Saturday statement to USNI News, […]

USS Nimitz (CVN-68) passing amphibious warship USS Portland (LPD-27) while departing San Diego, Calif., on Dec. 3, 2022. Photo via San Diego Web Cam used with permission

The Nimitz Carrier Strike Group left San Diego, Calif., on Saturday for a Western Pacific deployment, USNI News has learned.

USS Nimitz (CVN-68) left its pier at Naval Station North Island at around 8 a.m. Saturday local time, according to ship spotters and headed out into the Pacific.

In a Saturday statement to USNI News, U.S. 3rd Fleet acknowledged Nimitz left San Diego but did not provide additional details.

“USS Nimitz (CVN-68) departed San Diego, Calif. to conduct operations in U.S. 3rd Fleet,” reads the statement.
Nimitz is the flagship for Carrier Strike Group (CSG) 11 and is ready to answer the nation’s call and deliver combat-ready naval forces to deter, and if necessary, win conflicts through sustained and forward naval presence.”

The carrier left its Bremerton, Wash., homeport on Nov. 28 and sailed to San Diego to pick up the carrier strike group leadership before leaving California, Navy officials confirmed to USNI News. The carrier left Naval Base Kitsap, Wash., with 2,500 sailors aboard, according to the Kitsap Sun.

“The sailors assigned to Carrier Strike Group 11 are manned, trained and certified to deliver combat-ready naval forces to deter, and if necessary, win conflicts through sustained and forward naval presence,” Rear Adm. Christopher Sweeney, commander of CSG 11, said in a statement to the paper last week.

Nimitz, the oldest aircraft carrier in the fleet, its escorts and Carrier Air Wing 17 completed their Composite Unit Training Exercise (COMPTUEX) in October ahead of the deployment. The carrier was sidelined for two weeks in late September after the crew discovered potable water tanks aboard Nimitz were contaminated with jet fuel.

The carrier is deploying with USS Bunker Hill (CG-52), the oldest cruiser in the fleet, the staff of Destroyer Squadron 9 and five guided-missile destroyers USS Decatur (DDG-73), USS Paul Hamilton (DDG-60), USS Chung-Hoon (DDG-93), USS Wayne E. Meyer (DDG-108) and USS Shoup (DDG-86).

Nimitz‘s last deployment was at the height of the COVID-19 pandemic. The Western Pacific deployment was preceded with a quarantine period for the crew that began in April 1, 2020. The deployment ran from June 8, 2020 to March 4, 2021 – meaning the carrier crew was deployed eight months and 28 days, and away from home for 11 months and seven days.

USS Nimitz (CVN-68) prepares to depart Naval Base Kitsap-Bremerton for a scheduled deployment on Nov. 28, 2022. US Navy Photo

The following is the compostiion of the Nimitz Carrier Strike Group:

Carrier Strike Group 11

Carrier

  • USS Nimitz (CVN-68), homeported in Bremerton, Wash.

Carrier Air Wing 17

Carrier Air Wing (CVW) 17, based at Naval Air Station Lemoore, Calif., will be embarked aboard Nimitz for COMPTUEX and includes a total of nine squadrons and detachments:

  • The “Fighting Redcocks” of VFA-22 Strike Fighter Squadron (VFA) flying F/A-18Fs from Naval Air Station Lemoore, Calif.
  • The “Mighty Shrikes” of VFA-94 – F/A-18F – from Naval Air Station Lemoore.
  • The “Kestrels” of VFA-137 – F/A-18E – from Naval Air Station Lemoore.
  • The “Blue Diamonds” of VFA 146 – from Naval Air Station Lemoore.
  • The “Cougars” of VAQ-139 – EA-18G – Electronic Attack Squadron (VAQ) – from Naval Air Station Whidbey Island, Wash.
  • The “Sun Kings” of VAW-116 – E-2D – Carrier Airborne Early Warning Squadron (VAW) – from Naval Air Station Point Mugu, Calif.
  • The “Providers” of VRC-30 – C-2A – Fleet Logistics Multi-Mission Squadron (VRM) – from Naval Air Station North Island, Calif.
  • The “Indians” of HSC-6 – MH-60S – Helicopter Sea Combat Squadron (HSC) – from Naval Air Station North Island.
  • The “Battle Cats” of HSM-73 – MH-60R – Helicopter Maritime Strike Squadron (HSM) – from Naval Air Station North Island.

Cruiser

  • USS Bunker Hill (CG-52), homeported at Naval Station San Diego, Calif.

Destroyer Squadron 9

Destroyer Squadron 9 is based in Everett, Wash., and is embarked on Nimitz.

  • USS Wayne E. Meyer (DDG- 108), homeported at Naval Station Pearl Harbor, Hawaii.
  • USS Chung-Hoon (DDG-93) homeported at Naval Station Pearl Harbor.
  • USS Decatur (DDG-73) homeported at Naval Station San Diego, Calif.
  • USS Paul Hamilton (DDG-60) homeported at Naval Station San Diego.
  • USS Shoup (DDG-86) homeported at Naval Station San Diego.

Dirty Bulkers Are Now Being Used To Carry Food Crops to Asia

By Ann Koh and Hallie Gu (Bloomberg) –Dirty bulk ships used to carry iron ore are being scrubbed clean so that they can transport grain to Asia, in an unusual shift…

By Ann Koh and Hallie Gu (Bloomberg) –Dirty bulk ships used to carry iron ore are being scrubbed clean so that they can transport grain to Asia, in an unusual shift...

Breathing Life Into The Ocean

By Emily Cassidy NASA Earth Observatory–From global to regional scales, images from satellites portray the dynamic beauty of the world’s oceans. Each view reveals something unique, from the seasonal pulses…

By Emily Cassidy NASA Earth Observatory–From global to regional scales, images from satellites portray the dynamic beauty of the world’s oceans. Each view reveals something unique, from the seasonal pulses...

Russia Says It Won’t Accept Oil Price Cap

By Caleb Davis and Mark Trevelyan Dec 3 (Reuters) – Russia “will not accept” a price cap on its oil and is analyzing how to respond, the Kremlin said in comments reported…

By Caleb Davis and Mark Trevelyan Dec 3 (Reuters) – Russia “will not accept” a price cap on its oil and is analyzing how to respond, the Kremlin said in comments reported...

U.S. Seizes 1.1 Million Rounds of Ammunition, Other Illegal Weapons in Gulf of Oman

December 03, 2022, MANAMA, Bahrain —  On Dec. 1, U.S. naval forces in the Middle East intercepted a fishing trawler smuggling more than 50 tons of ammunition rounds, fuses and…

December 03, 2022, MANAMA, Bahrain —  On Dec. 1, U.S. naval forces in the Middle East intercepted a fishing trawler smuggling more than 50 tons of ammunition rounds, fuses and...

VIDEO: 18 Marines Become U.S. Citizens Following Naturalization Ceremony

There are 18 new American citizens Friday, after the Marine Corps held a naturalization ceremony aboard former battleship USS North Carolina. 1st Battalion, 8th Marines, 6th Marine Regiment, 2d Marine Division held the ceremony Friday morning, bringing in 18 Marines from 14 countries to become U.S. citizens, one of the largest ceremonies for a Marine […]

U.S. Marines with 1st Battalion, 8th Marine Regiment, raise their right hand during the Oath of Allegiance aboard the Battleship USS North Carolina Dec. 2, 2022. US Marine Corps Photo

There are 18 new American citizens Friday, after the Marine Corps held a naturalization ceremony aboard former battleship USS North Carolina.

1st Battalion, 8th Marines, 6th Marine Regiment, 2d Marine Division held the ceremony Friday morning, bringing in 18 Marines from 14 countries to become U.S. citizens, one of the largest ceremonies for a Marine Corps battalion, according to a news release from the 2nd Marine Division.

Since 2002, the United States has naturalized more than 158,000 service members, according to the U.S. Citizenship and Immigration Services. In Fiscal Year 2022 alone, 10,640 service members became U.S. citizens, an increase of approximately 21 percent over the previous fiscal year.

The top five countries for service members who become U.S. citizens are the Philippines, Jamaica, Mexico, Nigeria and China, according to Citizenship and Immigration Services.

The 18 Marines came from countries including Burkina Faso, China and Colombia.

Although the 18 Marines have been serving already, their new citizenship will allow them to pursue different specialities or commissioning opportunities, according to the release.

“Today was a great chance to recognize a significant event in the lives of these young Marines” Lt. Col. William Kerrigan, the battalion’s commanding officer, said in the release. “They have already raised their hands and committed to defending this nation, without even being U.S. citizens. Now that they have earned their citizenship, I’m excited to see where it takes them.”

Between FY 2018 and FY 2022, 63 percent of service members who became naturalized citizens came from the Army, with 17.3 percent from the Navy, according to Citizenship and Immigration Services. The Marine Corps accounted for 5.9 percent of service members who became naturalized citizens.

Transportation hiring surge falls short in November

Hiring expectations fell short across many transportation sectors in November, with real trucking employment dropping while warehousing firms and couriers added workers.

Hiring expectations fell short across many transportation sectors in November, with real trucking employment dropping while warehousing firms and couriers added workers.

Container shipping rates still sinking, no sign yet of market floor

Spot shipping rates continue their historic slide, putting even more pressure on container lines’ contract business.

The post Container shipping rates still sinking, no sign yet of market floor appeared first on FreightWaves.

So much for the theory that container lines are a nefarious cartel that can control freight pricing — spot rates are still falling over a year after they peaked.

“This cliff that rates have fallen from shows there is more competition in the market than a lot of people had feared,” said Patrik Berglund, CEO of rate-tracking company Xeneta, in a recent interview with American Shipper.

The pace of spot-rate declines did slow in some trade lanes in October versus August and September. However, rate losses picked up again in many lanes in November, causing global averages to fall further. There’s no sign yet of a market bottom in most trades.

Lars Jensen, CEO of consultancy Vespucci Maritime, commented on recent spot-rate action in an online post: “We are coming out of the tunnel, only to discover that the bridge we are driving onto has collapsed.”

Declines since the peak

Different spot-rate indexes provide different numbers but show the same downward trend. 

The weekly Drewry World Container Index shows a 78% decline in the global composite rate between Sept. 16, 2021, and Thursday. Drewry’s Shanghai-Los Angeles index fell 84% over that period and its Shanghai-New York index dropped 73%.


The Drewry rate assessments show a gradual decline in the first half of this year, followed by a more precipitous fall starting in August. Despite the huge drop from last year’s record peak, the global index is still 61% higher than the 2019 average, pre-pandemic.

chart of shipping rates
Spot rate in $ per FEU. Blue line: Shanghai-LA, orange line: Shanghai-NY, green line: global (Chart: FreightWaves SONAR)

The Freightos Baltic Daily Index (FBX) China-West Coast assessment plunged 93% between Sept. 5, 2021, and Thursday. The FBX China-East Coast rate is down 84% over that timeframe. The FBX global composite is down 75%.

The FBX indexes show a drop in Q4 2021, a plateau in January-April 2022, then a severe decline since May.

chart of shipping rates
Spot rate in $ per FEU. Blue line: Shanghai-LA, orange line: Shanghai-NY, green line: global (Chart: FreightWaves SONAR)

Weekly rate of change in trans-Pacific

Spot rates have fallen harder on the Asia-West Coast route than in other lanes. Asia-West Coast spot rates look like they might be close to bottoming, simply because they can’t fall much further. Xavier Destriau, CFO of ocean carrier Zim (NYSE: ZIM), said on Nov. 16: “There is not much more room for a reduction.”

Declines in the Drewry Shanghai-Los Angeles index were fastest in the week ended Sept. 8, when average rates plunged 14% or $780 per forty-foot equivalent unit versus the previous week. Weekly declines eased throughout October and November. In the week ended Thursday, the Shanghai-Los Angeles rate fell only $30 per FEU or 1.4% versus the week before, to an average of $2,039 per FEU.

chart of shipping rates
(Chart: American Shipper based on data from Drewry)

The pricing dynamic is completely different in the Asia-East Coast trade, where lingering congestion and strong import volumes have kept spot rates higher for longer, meaning they still have plenty of room to fall. 

The Drewry Shanghai-New York index fell the most in the week ended Sept. 22: 9% or $776 per FEU versus the prior week. Unlike in the Asia-West Coast market, Asia-East Coast rates show no sign of bottoming and continue to suffer sizable drops. In the week ended Thursday, rates fell 9% or $438 per FEU compared to the prior week.

(Chart: American Shipper based on data from Drewry)

Weekly rate of change for global indexes

Because of ongoing declines in the Asia-East Coast lane — as well as weakness in other trades such as Asia-North Europe — global composite indexes are continuing to sink.

The Drewry global composite was falling fastest in percentage and dollar-per-FEU terms in late September. It has continued to experience significant weekly drops over the past month. In the week ended Nov. 10, it fell 9% or $277 per FEU.

(Chart: American Shipper based on data from Drewry)

The most-watched index among shipping analysts is the weekly Shanghai Containerized Freight Index (SCFI), released each Friday. It has displayed the same pattern as Drewry’s global index: falling fastest in September but still showing continued declines in November.

(Chart: American Shipper based on data from SCFI)

Effect on contract rates

The majority of containerized cargo is moved on long-term contracts, not spot deals. 

But spot-rate moves are increasingly important for three reasons: Shippers with contracts are shifting more volume to spot to save money, reducing contract volume; the decline of spot rates to levels below contract rates has compelled shipping lines to lower some existing long-term rates mid-contract; and upcoming negotiations on 2023 annual contracts will hinge on where spot rates end up. Most Asia-Europe annual contracts begin Jan. 1 and most Asia-U.S. annual contracts begin May 1.

Even before those dates, long-term shipping rates are already falling due to new contracts signed at other times of the year as well as existing contracts being renegotiated lower.

The Xeneta Shipping Index (XSI) tracks long-term rates. The global XSI fell 5.7% in November versus October, the largest month-on-month decline since Xeneta launched the index in 2019. The regional index for U.S. import contracts fell 8.9% month on month. The Far East export index sank 8.5%, more than it has in any previous month. 

According to Berglund, “We’ve already seen how spot rates have collapsed since summer. We’re now witnessing a ‘catch-up’ as existing [annual] agreements expire and new contracts come into force.”

Ocean carriers could face a particularly painful drop in Asia-U.S. contract rates in 2023 if spot rates do not find a floor soon and continue to decline during the first half of next year. A backdrop of falling spot rates would put ocean carriers in an even worse position when negotiating next year’s agreements. 

Click for more articles by Greg Miller 

The post Container shipping rates still sinking, no sign yet of market floor appeared first on FreightWaves.