Trendwatch: Beneficial cargo owners and service providers need to brace for China shipbuilding tariffs; IATA: Cargo volumes continue to grow in May despite trade turmoil; US manufacturing activity improved in June, but sentiment remains low

Beneficial cargo owners and service providers need to brace for China shipbuilding tariffs

Shipping interests are closely monitoring proposals for import and export trades involving Chinese vessels. Domestic industry prompted a Section 301 investigation by the United States Trade Representative (“USTR”) over concerns about China’s industrial ambitions in sectors critical to U.S. economic and national security. The outsized role of China in international ocean shipping is greater than many would expect. China’s global tonnage of shipbuilding market share grew from less than 5% in 1999 to more than 50% in 2023.  China owns more than 19% of the commercial world fleet, while controlling production of approximately 95% of the world’s shipping containers and 85% of the world’s intermodal chassis. 

IATA: Cargo volumes continue to grow in May despite trade turmoil

Air cargo demand continued to grow in May despite the US implementation of steep tariffs and the ending of the de minimis exemption for shipments from China.

The latest monthly statistics from IATA show that air cargo demand increased by 2.2% year on year in May, while capacity was up 2% and the load factor increased by 0.1 percentage points to 44.5%.

US manufacturing activity improved in June, but sentiment remains low

Stronger production and inventory activity drove an improvement in U.S. manufacturing performance last month despite weaker demand, tariff uncertainty and inflation continuing to weigh on companies, according to the Institute for Supply Management’s June Purchasing Managers’ Index.

The ISM’s index registered 49% in June, up 0.5 percentage points compared to the month prior. A PMI reading below 50% indicates the industry is in contraction.

Qatar resumes operations in conflict hit countries bar Iran

Qatar Airways said it has resumed operations in Iraq and Syria and returned to full flight schedules in Lebanon and Jordan, following the lifting of airspace restrictions.

The reinstated services follow widespread cancellation of operations to Israel, Iraq, Iran, Jordan, Lebanon and Syria as a result of the ongoing conflict and airspace restrictions.

Vessel rerouting contributed to increase in containers lost at sea

While the overall trend continues to show improvement in the number of containers going overboard, the World Shipping Council reports that in 2024, rerouting of vessels to avoid the hostilities in the Red Sea directly contributed to an increase in boxes lost at sea. The trade group points to the industry’s continuing efforts, highlighting that in the absence of a large casualty, the rate of losses continues to improve.

Turkey to set sustainable aviation fuel mandates for airlines, suppliers

Turkey will set mandates for airlines and jet fuel suppliers to boost uptake of sustainable aviation fuel, with a goal of reducing aviation emissions by 5% by 2030, its civil aviation authority said on its website.

The move is aimed at complying with the U.N. International Civil Aviation Organization's emission reduction scheme that will become mandatory in 2027.

MOL conducts technical trial voyage using biofuel ‘B30’

Mitsui O.S.K. Lines, Ltd. announced that on June 26, it refueled its operated coal carrier HOKULINK with biofuel at Yeosu Port in South Korea. The HOKULINK, which transports coal for Hokuriku Electric Power Company (President: Koji Matsuda; Head Office: Toyama-shi, Toyama Prefecture), then began technical trial voyages using biofuel.

Recycling logjam looms following Hong Kong Convention entry into force

Most commercial ships end their lives on the beaches of the Indian subcontinent. Yet, despite the adoption of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (Hong  Kong Convention) no less than 16 years ago and its entry into force on June 26th, two years after Bangladesh and Liberia became ‘contracting states’, a significant number of yards in Bangladesh and not a single facility in Pakistan, which accounts for an estimated 17% of recycled tonnage, comply with the regulations.

Oman Air joins oneworld alliance

oneworld® today welcomes Oman Air as its 15th member airline. As the flag carrier of the Sultanate of Oman, Oman Air strengthens the alliance’s presence across the Middle East and unlocks new opportunities for global travel.

"We are proud to welcome Oman Air to the oneworld family," said Nat Pieper, CEO of oneworld. "Oman Air brings valuable strategic reach and award-winning product and service to the alliance. This partnership opens up exciting new connections for our customers, particularly across the Gulf and South Asia, and reinforces oneworld’s position as the premium alliance for international travellers."

Bangladesh orders striking tax officials back to work; port operations hindered

The Bangladesh government ordered tax and customs workers to return to work immediately on Sunday and end a two-day nationwide strike that has brought tax operations to a standstill, including customs operations at major trade hub Chittagong Port.

“Officials and employees must return to work at once and refrain from activities that harm national interests. Otherwise, the government will be compelled to take strict measures to protect the people and the national economy,” the statement said, without giving details of what such measures might entail.

MSC ramps up megamax expansion with $1.2bn shipbuilding deal in China

Gianluigi Aponte’s Mediterranean Shipping Co (MSC) is pressing ahead with megamax containership fleet expansion through a new shipbuilding deal in China.

The Swiss-based liner giant has ordered up to six 22,000 teu newbuilds from China Merchants Heavy Industries’ Haimen shipyard.

Shipbuilding sources estimate each LNG dual-fuel ship at more than $200m, with deliveries expected to start in 2027.