News

New Balance Adds Investment to Expand Indonesian Operations
06 May 2023
Sportswear giant New Balance announced the plan to expand its Indonesian operations by sourcing products to a seventh factory located in the West Java town of Cirebon. The new factory is expected to begin production in August. An Indonesian government official said the new investment is valued at more than Rp1 trillion ($67.9 million). New Balance Country Manager Elmore Simorangkir said the company has made Rp 2 trillion in direct investment since it came to Indonesia and is committed to adding more, getting convinced by the stable political situation, improved infrastructure, and favorable regulatory regime in the country. New Balance has established partnerships with more than 300 Indonesian suppliers, making the country a strong candidate to become its main production base in Southeast Asia. The new factory will manufacture footwear in collaboration with local manufacturers, Elmore said. New Balance sources footwear and apparel from factories in Banten and East Java with the plan to expand operations in Central and West Java as well, he added. Its footwear export from Indonesia topped $500 million last year to China, Japan, the United States, and European countries. The new investment is expected to create 40,000 new jobs.   Source : https://jakartaglobe.id/business/new-balance-adds-investament-to-expand-indonesian-operations
42nd ASEAN Summit at Labuan Bajo
06 May 2023
The 42nd ASEAN Summit in Labuan Bajo, East Nusa Tenggara, generally discussed a number of issues such as regional economic growth, institutional strengthening, and efforts to overcome internal crises such as in Myanmar. Myanmar’s leaders was absent due to the country’s takeover by its military junta.   Source : https://en.tempo.co/read/1723959/42nd-asean-summit-officially-kicks-off-at-labuan-bajo
Carriers Increasing Slow Steaming Impacting Liner Capacity
06 May 2023
Slow Steaming has become a buzzword phrase in the shipping industry gaining attention as the carriers are confronted by increasing environmental regulations and falling demand. Industry trade association BIMCO’s chief shipping analyst, Niels Rasmussen, is writing about the impact slowing liners is having on the industry while forecasting that the group believes sailing speeds could fall by 10 percent before 2025. Slow steaming was first introduced BIMCO reports in the aftermath of the financial crisis more than a decade ago, cutting sailing speed on mainline routes by as much as 20 percent. The motivation then and again now as freight rates and the spot market had dropped dramatically is that when ships adjust their speed, the transport capacity is affected and the adjustment can be an effective way of managing capacity supply. Lower sailing speeds however are drawing longer-term attention because they also reduce bunker oil consumption and greenhouse gas emissions. “During the COVID-19 pandemic, liner operators increased the average sailing speed by up to four percent due to strong demand and widespread port congestion,” writes BIMCO. “Today, the situation is very different and in the first quarter of 2023, the average sailing speed has slowed to 13.8 knots, down four percent year-over-year.” Most of the focus on slow steaming is now centering on the emerging environmental regulations from the International Maritime Organization, including the Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII). One of the techniques that industry observers predicted would be adopted was slowing the speed of vessels to reduce fuel consumption and in turn emissions. To comply with the EEXI, BIMCO notes that some ships have had to install Engine Power Limitations (EPL), reducing their top speed. To maintain the buffer between the top speed and scheduled speed creating the cushion to allow ships to recover from delays in port or due to weather, carriers have had to reduce schedule speeds and extend travel times for customers. The Carbon Intensity Indicator (CII) regulation which the IMO officially implemented at the beginning of 2023 and overall greenhouse gas emission targets BIMCO forecasts may also drive further reductions in sailing speed. Average sailing speed has reduced significantly, although the traditional faster speed in the head-haul direction remains reports BIMCO in its analysis of ship operations. They note that the adjustments in schedules have naturally mostly impacted the faster head-haul direction while narrowing the difference in speed between the directions. The larger ships sailing intercontinental trades they note have also continued to sail faster than the smaller ships in intra-regional trades Taking into account all the issues now at play in the industry, Rasmussen writes, “These traditions may, however, also be about to change.” In 2019, he notes the largest ships sailed on average 2.6 knots faster than the smallest ships. During the first quarter of 2022, that speed difference had narrowed to 1.8, and further to 1.6 during the first quarter of 2023. As a result, the average sailing speed weighted by the ships’ TEU capacity fell by six percent year-over-year in the first quarter of 2023 BIMCO calculates. By comparison, they note that the simple average sailing speed fell only four pear year-over-year. “Supply has therefore decreased faster than the sailing speed,” says Rasmussen. “The speed difference between head-haul and back-haul direction may also be reduced in the future.” He predicts, ”We believe it is a good indication of things to come.” BIMCO however also notes other potential impacts on the market beyond being used as a tool to manage capacity and achieve near-term improvements to meet the emissions requirements. They note that the lower average sailing speed may be due to improved port congestion. During the height of the surge in shipping volumes, carriers needed to deploy extra capacity to manage with the backlogs and long delays vessels were experiencing on their routes due to port congestion. With port congestion largely cleared away now that volumes have dropped, BIMCO also notes that some ships are returning more slowly to Asia-Pacific than normal.   Source : https://www.maritime-executive.com/article/bimco-carriers-increasing-slow-steaming-impacting-liner-capacity
MSC Takes Delivery of the World's Biggest Ultra Large Container Ship (ULCS)
03 May 2023
Mediterranean Shipping Company (MSC) took delivery of its second ultra large container ship, and this time it is the world’s largest by carry capacity at 24,346 TEU. The carrier took delivery on two of the largest con- tainerships, both surpassing the 24,000 TEU hurdle, on the same day in China as part of a wave of capacity growth coming to the container industry.   Source : https://maritime-executive.com/article/msc-receives-second-ultra-large-and-this-one-is-the-world-s-largest
Indonesia’s retail sales rise 7%
03 May 2023
Retailers reported a jump in sales last month as consumers apparently entered a spending mood before and during Ramadan. A Bank Indonesia (BI) report based on preliminary data showed that its retail sales index jumped 7 percent in March, more than making up for the 3.4 percent month-to-month (mtm) drop in February. The improvement was “attributable to all commodity groups, led by information and communication equipment, cultural and recreation goods, as well as food, beverages and tobacco [FBT],” BI spokesman Erwin Haryono stated in a press release published on the central bank’s website.   Source : https://www.thejakartapost.com/business/2023/04/12/retail-sales-rise-7-in-march-thanks-to-seasonal-jump.html
Container-ship charter rates have bounced off the bottom and are now rising again (at well above pre-COVID levels)
02 May 2023
The duration of charters is also headed back upward; more two-year deals are being done again. Despite weaker import demand, commercially idle tonnage has actually substantially decreased over recent weeks. There was also supposed to be a tsunami of scrapping of older tonnage this year to make way for new-buildings, but with Q1 in the books, scrapping remains fairly minimal (older ships are still earning too much in the charter market and selling for too much in the S&P market).
Global Ports’ volumes nearly halve in Q1 2023
02 May 2023
Global Ports has reported a decline in its consolidated marine container throughput in the first quarter of 2023. The figure totalled 186,000 TEU, a drop of 48.8 per cent compared to the same period in the previous year, due to the high base effect of the first two months of 2022 as reported by the company. However, the figure demonstrated a 4 per cent increase compared to the previous quarter, indicating a gradual recovery in the container supply chain. Despite the decline in the container market, Global Ports remains optimistic about the future, expecting a gradual recovery of the market in the second half of 2023, following the end of the high base effect and the normalisation of the supply chain.   Source : https://www.porttechnology.org/news/global-ports-volumes-nearly-halve-in-q1-2023/
Ace Hardware Indonesia ends two-year rout to post revenue uptick
02 May 2023
Ace Hardware Indonesia has reversed its two-year losing streak to post a 3.35-per cent uptick in net sales. The company, which is Indonesia’s dominant home improvement retailer, disclosed net sales of 6.762 trillion Rupiah, the first time since 2019 that it posted annual gains, thanks to its recovery. A member of the Kawan Lama Group, Ace Hardware Indonesia holds the license to operate Ace Hardware stores in the southeast Asian country. As of end-2022, the company operated 228 retail outlets across Indonesia.   Source : https://www.diyinternational.com/content/news/2023/04/13/ace-indonesia-ends-two-year-rout-to-post-revenue-uptick-in-2022.html