Did You Know That…

…Markets diverge: another fall in transpacific amid Asia-Europe gains.

·         SCFI Shanghai-US west coast index drops 18% vs last week; Shanghai-US east coast index falls 9%

·         SCFI Shanghai-North Europe index rises 7% week on week; Shanghai-Med index remains flat

·         Ships arriving in Rotterdam, Antwerp and Hamburg face high waiting times

Container trades to the US are suffering from seasonal weakness compounded by rising inflation. Trades to Europe are holding up better, with port congestion continuing to support rates.

 

…Carriers bid for Asia-Europe pre-CNY rates push – but will new GRIs hold? Ocean carriers are keen to “keep pushing increases” on the Asia to Europe trade, ahead of any potential rate war.  

 

…CMA CGM keeps US shipbuilding ambition alive as it adds megamax newbuilds in China.

·         CMA CGM Group chief financial officer Ramon Fernandez confirms talks ongoing with US authorities following March’s announcement to build ships in US shipyards

·         Third-largest container line confirmed to have ordered up to 10 22,000 teu boxships from Dalian Shipbuilding

·         CMA CGM reported a 2.3% increase in third-quarter container volumes compared to the same quarter last year

CMA CGM has a four-year plan to invest in the US that builds on its existing commitments, including not only air freight and container terminals but also new ships.

…Which is India’s superstar state? HOW FAST should India grow? Narendra Modi, the prime minister, wants it to gain “rich-country” status by 2047, the centenary of its independence. A back-of-the-envelope calculation suggests that will require its economy to expand by around 8% annually, up from roughly 6% on average over the past 25 years. Only a few big states reliably post such numbers. Two places in particular are held up as exemplars. One is Gujarat, a heavily industrialised western state that Mr Modi ran for more than a decade before he became prime minister in 2014. The other is Tamil Nadu in the south-east, which is growing by double digits, making it India’s top performer last year among the states that have reported figures.

For generations Gujarat has prospered as a manufacturer of textiles, polisher of diamonds and hub for shipping. More recently it has sold itself as a home for capital-intensive megaprojects, such as in pharmaceuticals and petrochemicals. It is now attempting to grow in financial services and to break into chipmaking.

Two hours south by flight is Tamil Nadu, another littoral state that is roughly as rich and as populous. Last year its economy expanded by 11%. The spurt has a lot to do with the growth of electronics manufacturing—and, in particular, Apple’s decision to increase the number of devices it makes in India. Tamil Nadu exported around $15bn of electronics last year (about 40% of India’s total), up three-fold from 2022-23. But the state is also a big maker of cars, motorbikes and lorries. And it has managed to pick up some of the tech-services and other back-office work that are usually associated with places like Bangalore and Hyderabad.

 

…Chinese regulations and competition are panicking European manufacturers. Recent curbs on computer chips and rare earths are feeding broader fears about deindustrialisation. Bert Sutter, the boss of a medical-devices firm and head of an association of German manufacturers, has a blunt assessment of European industry’s prospects in the face of a wave of cheap Chinese competition. “In my sector they look at the price-point of the market leader and sell for roughly half of that,” he says. “Europe is not prepared for this hyper-competition.” It is not just Mr Sutter who is concerned, and it is not only low Chinese prices that are prompting consternation. The VDMA, an association of German machinery firms, put out a report in June which argued that China is “not playing fair” and urged the European Union to find ways to level the field. European manufacturers’ anxieties were amplified in October when China abruptly curbed exports of two critical inputs. First it added five rare earths (minerals which are used to make many motors and other gadgets) to its new export-licensing regime. Days later it banned the export of computer chips made by Nexperia, which supplies lots of carmakers, among other European customers. Several European firms warned of production stoppages and a few German companies put some workers on leave without pay. China, many European manufacturers have concluded, is threatening to put them out of business, by both fair means and foul. What can be done to protect European industry, they ask—and will Europe have the gumption to do it?

 

…Shut up, or suck up? How CEOs are dealing with Donald Trump. Chief executives are learning to live with a unique commander-in-chief. When you learn how things got to where they are, though, you rub your eyes. The president raised import duties in April on most of America’s trading partners, then moved them up and down in ways that were hard to fathom. The S&P 500’s ascent from some $50trn in aggregate market value on November 5th 2024 to $60trn or so now included a $7trn tumble between election day and the start of his trade war. He has tried to sack a Fed governor (unsuccessfully so far), get private companies like Intel and Microsoft to fire executives he disapproves of (likewise), and force individual law firms he dislikes to take up MAGA causes pro bono (many succumbed). Things get more shocking still: the state holds a “golden share” in US Steel (now in Japanese hands), owns stakes in a bunch of rare-earth miners plus 10% of Intel, a struggling chipmaker, and wants a 15% cut of Nvidia’s and AMD’s chip sales to China.

 

…Maersk selects Charlotte as North American HQ. A.P. Moller-Maersk has announced Charlotte as its official North American headquarters, signalling its commitment to growth and innovation in the region. The company plans to add over 500 jobs in Charlotte over the coming years, increasing its local workforce to more than 1,300 employees.

 

…Samskip launches direct Morocco–Europe service. Samskip has launched a new direct shortsea service connecting Agadir and Casablanca with the UK and Netherlands, revolutionising Moroccan exports and European trade.

 

…AD Ports and CMA CGM expand Khalifa port. AD Ports Group has signed an agreement with CMA CGM Group to nearly double the capacity of their joint terminal at Khalifa Port, less than a year after its opening. The USD 115 m expansion, scheduled for completion in early 2028, will increase the terminal's capacity from 1.8 to 2.7 m teu – an almost 50% rise – raising Khalifa port's total handling capacity by 9% to 10.5 m teu annually. The upgrade includes extending the quay wall by 50%, expanding the yard area by over 40%, and upgrading utilities and systems, including advanced reefer racks for refrigerated containers.

 

…Foxconn’s revenues from making AI servers and data-centre equipment surpassed revenues from its consumer-electronics business, such as assembling the iPhone, for the second quarter in a row. The company said it would soon announce a deal with OpenAI.

 

…Wading in dangerous waters. China lodged a formal protest after Japan’s new prime minister, Tataichi Sanae, suggested that any attack by China on Taiwan threatened Japan’s survival and would warrant a military response.

…Today the world celebrates World Television Day – the UN-created reminder (since 1996) that no matter how small the remote is, TV remains one of humanity’s biggest communication tools.

…This DYKT news bulletin will be published on the website as well, go to www.eaanetwork.com.

Have a good week!