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JOC 12/3/13 - Asia-Europe Rates Set for Stress Test Print E-mail


Asia-Europe Rates Set for Stress Test


Carriers are unlikely to stem the decline in freight rates in the Asia-to-North Europe trade lane any time soon, even if the general rate increases they plan to implement later this week boost spot rates for a few days.


Carriers were able to sustain high vessel utilization rates through a combination of canceled sailings and some service suspensions in the weeks leading up to the Chinese New Year celebration, when Chinese factories shut down for two weeks starting Feb. 10, but spot rates in the Asia-Europe trade dropped below $1,000 per 20-foot-equivalent container in the week of March 8, marking the seventh straight week of decline, with rates falling 29.5 percent or $419 per TEU since Jan. 11.


Carriers were able to manipulate the situation so they were full going into the Chinese New Year, when demand was up, but demand has plummeted since then, said Simon Heaney, research manager at Drewry in London. We estimate that vessel utilization has gone from 100 percent in January to 70 percent in February because of supply and demand fundamentals.


Demand has fallen so precipitously that the CKYH Alliance of Cosco, K Line, Yang Ming and Hanjin Shipping announced plans on March 11 to suspend its NE1 Asia-Europe loop and not to resume the NE4 service that it cut back in October of last year. The alliance had reportedly been planning to resume the NE4 service in May.


Similarly, the G6 Alliance announced in January it would not resume sailings of its Loop 3 service between the Far East and Europe covering all major ports with weekly sailings. Adjustments have also been made to the groups five other Asia-Europe services to accommodate port calls from the Loop 3 service, which the group had suspended in October. The G6 Alliance consists of APL, Hapag-Lloyd, Hyundai Merchant Marine, MOL, NYK Line and OOCL.


Asia-Europe carriers have announced plans to put a general rate increase, ranging from $600 to $700 per TEU, into effect in mid-March, but it remains to be seen how long the increase will last. Carriers are doing their best to remedy the supply situation with these canceled sailings, but effectively its tinkering around the edges and not addressing the underlying overcapacity issue in that trade.


Vessel capacity in the Asia-Europe trade is expected to increase 4 percent this year, while demand is only forecast to grow 1 percent, Alphaliner executive consultant Tan Hua Joo told The Journal of Commerces 13th annual TPM Conference last week. He said freight rates increased sharply last year despite overcapacity and weak demand, but that its overly simplistic to assume that carriers can repeat 2012 performance in 2013.


Demand is likely to pick up in the Asia-Europe trade in the next few weeks, but whether it is strong push vessel utilization rates up to levels where they can sustain the rate increases remains to be seen, Heaney said.


Asia-Europe carriers have scheduled another GRI for April 1, when they plan to implement increases ranging from $750 to $775 per TEU.


Regardless of the supply-demand equation prevailing on the trade, the success of the carriers rate increases will come down to their ability to maintain discipline. Its up to the resilience of carriers to make sure these things stick, Heaney said. But if the supply-demand fundamentals are appalling, theres a limit to how far they can push it.

JOC 12/3/13 - China's Share of US Import Market Slips Print E-mail


China's Share of US Import Market Slips


China, while still the undisputed leader in supplying apparel, footwear and furniture to the U.S., is seeing its market dominance diminish because of annual double-digit wage increases in those industries.


Meanwhile, low-wage countries in Southeast Asia and Latin America are steadily increasing their share of U.S. apparel, footwear and furniture imports, according to a report released Tuesday by PIERS, a sister company of The Journal of Commerce.


Chinas strength in labor-intensive export manufacturing is waning as factory wages rise at a double-digit pace and labor shortages deepen. A rising yuan does not help the situation either, said Mario Moreno, JOC staff economist.


Moreno emphasized that China has such a commanding lead in these labor-intensive industries that it will take many years before it loses its top spot. At the same time, it is becoming highly clear that a new trend is developing in the sourcing shares of these labor-intensive goods, he said.


Furthermore, a loss of market share does not necessarily mean Chinas exports to the U.S. are declining. In the apparel sector, for example, U.S. imports from China in constant dollars increased 7 percent in 2011. However, U.S. imports from Vietnam and Cambodia increased 13 percent and 18 percent, respectively.


Even in volume terms, which discounts the effect of inflation and exchange rates, the trend of U.S. apparel imports from Vietnam, Cambodia and El Salvador increasing faster than from China is evident, according to the PIERS report.


China is the largest source of footwear in the U.S., accounting for 72.6 percent of imports in 2012. However, its market share is down from 76.1 percent in 2010. Vietnam, Indonesia and Mexico, meanwhile, have increased their U.S. market shares. Modest gains were seen for India, Cambodia, Bangladesh and Nicaragua, according to the report.


By volume, containerized shipments from China were down 1 percent and 18 percent in 2011 and 2012 year-to-date, respectively, while shipments from Vietnam were up 14 percent and 2 percent in those same years, respectively, Moreno stated.


China is the largest shipper of furniture to the U.S., but its share has declined to 51 percent in 2012 from 52.8 percent in 2010. Furniture imports picked up last year with the improving housing economy, but while imports from China through September were up 9 percent, imports from Mexico, Vietnam and India were up by double-digit rates in dollar terms.


From 2001 to 2011, furniture imports from Vietnam expanded at a compound annual growth rate of 62.7 percent, the highest growth rate among developing economies.


The PIERS report also examines the effects of Chinas rapidly increasing wage rates and the much slower growth in wage rates in Southeast Asia and Latin America. The gap between wage rates in China and those other developing countries has narrowed considerably the past few years.

JOC 12/3/13 - USDA Proposes More Specific Origin Labels on Meat Print E-mail


USDA Proposes More Specific Origin Labels on Meat


The U.S. Department of Agriculture is proposing to amend the Country of Origin Labeling regulations to require more detailed country of origin information on meat labels, including where the animal was born, raised and slaughtered.


For example, for animals exclusively born, raised and slaughtered in the U.S., current labeling requirements would be changed from Product of the U.S. to Born, Raised and Slaughtered in the U.S.


The USDA is proposing the changes to labeling requirements in response to a 2012 World Trade Organization ruling that the U.S. labeling law treats imported meat less favorably than domestic meat, but also said the changes will benefit consumers. The U.S. has until May 23 to comply with the WTO ruling.


The agency is seeking comments on the proposal, which must be received on or before April 11, 2013. They should be submitted online under docket number AMS_FRDOC_0001 or by email or mail.


The National Cattlemens Beef Association has criticized the proposal. 


NCBA has maintained that there is no regulatory fix that can be put in place to bring the current COOL rule into compliance with our WTO obligation or that will satisfy our top two trading partners, Mexico and Canada, said Scott George, president of NCBA and a cattleman from Cody, Wyo., in a written statement. With the amended rule, the USDA has proven that to be true. The proposed amendments will only further hinder our trading relationships with our partners, raise the cost of beef for consumers and result in retaliatory tariffs being placed on our export products.

Shpg Gazette 13/3/13 - Poor cargo fit prompts APL to drop 53-foot containers on transpacific Print E-mail


Poor cargo fit prompts APL to drop 53-foot containers on transpacific


SINGAPORE's APL, the container shipping arm of Neptune Orient Lines (NOL), has discontinued transpacific service to 53-foot containers after championing US standard truck-length box since 2007.


"The economics just didn't work," said APL Americas CEO Gene Seroka, reported American Shipper. "We'll keep watching it, but at this time it's just not a viable option."


It was hard to find exports to match inbound cargo arriving in the containers which were fortified of ocean passage and now used by Trailer Bridge, a truck-box barge service between Jacksonville, Puerto Rico and the Dominican Republic. Some 53-footers were now used by APL Logistics while others have been sold.

[12-03-13] CSCMP Thailand Roundtable จัดสัมมนาหัวข้อ "Future Value Chain 2020" Print E-mail

Imageเมื่อวันที่ 12 มีนาคม 2556 CSCMP Thailand Roundtable ร่วมกับ สภาผู้ส่งออกฯ และ สถาบันโซ่วิทยาการ มหาวิทยาลัยศรีปทุม  จัดสัมมนาหัวข้อ "Future Value Chain 2020" โดยได้รับเกียรติจาก คุณเตชะ บุณยะชัย รองประธานสภาผู้ส่งออกฯ และคุณคงฤทธิ์ จันทริก ผู้อำนวยการบริหารสภาผู้ส่งออกฯ เป็นวิทยากรบรรยาย ณ  ห้องประชุม 1 สภาผู้ส่งออกฯ โดยมีผู้เข้าร่วมสัมมนาทั้งสิ้น 22  คน

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