Spotlight
ILA strike wake disrupts north-south trade
Shippers on the north-south trade lanes to and from South America are facing disrupted shipping schedules and congestion at key ports along the east coast of South America amid cascading effects from the early October strike at US East and Gulf coast ports that are just now being felt . Market sources say cargo leaving ports in Brazil , Argentina and Uruguay is being delayed because ships bound for those ports are arriving from the US with disrupted schedules following the Oct . 1-3 strike by the International Longshoremen ’ s Association ( ILA ). The disruption in Brazil is being exacerbated by longshore labor strikes there . Maersk in an advisory said some South American terminals are seeing waiting times of as much as a week . Maersk terminals in Santos , Itapoá and Rio Grande in Brazil , Bahia Blanca in Argentina and Montevideo in Uruguay were seeing delays of one to three days . Additionally , the Brasil Terminal Portuário in Santos and terminals in Paranagua were dealing with delays between four to seven days . A freight forwarder in Brazil said the biggest hurdles he was facing were at terminals in the southern region of the country . “ Some ( terminals ) are working over their capacity , which is causing extreme difficulty in terminal windows opening for delivery of containers ,” the source said . “ Santos was being used as an escape for this , but it ’ s also starting to get more difficult .”
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MSC expands Brazilian logistics reach
Mediterranean Shipping Co . ( MSC ) will take over a majority stake in Brazilian port and logistics operator Wilson Sons valued at $ 768 million as the carrier extends its reach deeper into key markets in preparation for the rollout of its standalone network early next year . MSC ’ s SAS Shipping Agencies Services reached an agreement with London-listed Ocean Wilsons Holdings on Oct 21 to acquire a 56.47 % stake in Wilson Sons , its Brazilian port and logistics subsidiary . The Geneva-based carrier will exit the 2M Alliance with Maersk on Jan . 31 and has been on an acquisition spree over the past year to shore up its global logistics and container terminal operations . Wilson Sons is one of the largest providers of maritime services in Brazil and in 2023 handled more than 1 million TEUs at its two terminals , Tecon Rio Grande container terminal in Rio Grande do Sul and the Tecon Salvador container terminal in Salvador Bahia . In the first half of 2024 , Wilson Sons ’ container terminal revenue rose 29 % year over year on the back of rising transshipment and gateway volume , higher revenues from ancillary services and fixed cost dilution , the company said in its first-half earnings statement .
Ocean carriers signal profit strength
Maersk has raised its full-year profit forecast for the second time in three months , driven by expected third-quarter operating profit of $ 3.3 billion as the delayed effect of rising contract rates secured in the second quarter pushed earnings higher . The ocean carrier in its preliminary earnings release Oct . 21 also upped
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its full-year outlook for container volume growth to the top end of the 4 % to 6 % range set back in August . Maersk is expecting strong demand through the rest of the fourth quarter as shippers move cargo ahead of an early Lunar New Year that in 2025 falls on Jan . 29 compared to Feb . 10 this year . Maersk third-quarter earnings are scheduled for release Oct . 31 . Earlier in the month , Taiwan ’ s Big Three carriers — Evergreen Marine , Yang Ming Marine Transport and Wan Hai Lines — each reported third-quarter revenues more than double from a year ago on stronger freight rates . Rates were driven by an early peak season as shippers consigned cargo ahead of the longshore strike along the US East and Gulf coasts last week and a capacity crunch as vessels continued to divert around southern Africa to avoid militant attacks in the Red Sea . Evergreen ’ s revenues climbed 109 % year over year to $ 4.8 billion in the third quarter , according to its exchange filings . Yang Ming also reported a 109 % rise in third-quarter revenues to $ 2.3 billion , while intra- Asia-focused Wan Hai saw revenues in the period surge 119 % to $ 1.7 billion . None of the carriers provided profit figures , but those details will be given when the carriers release full quarterly results next month .
6 Journal of Commerce | November 4 , 2024 www . joc . com