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Tanker, Bulker, LNG Rates Plunge, Container Rates Hold Near Top

Tanker, Bulker, LNG Rates Plunge, Container Rates Hold Near Top

By Greg Miller of FreightWaves

It’s a tale of two shipping markets. Spot rates remain near historic highs for container shipping; the boom shows no sign of ending. But over…

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Tanker, Bulker, LNG Rates Plunge, Container Rates Hold Near Top

By Greg Miller of FreightWaves

It’s a tale of two shipping markets. Spot rates remain near historic highs for container shipping; the boom shows no sign of ending. But over in commodity shipping — dry bulk, crude and product tankers, liquefied natural gas (LNG) carriers — spot rates have now sunk below five-year averages.

Crude tankers

“A bleak outcome,” said brokerage BRS of the recent rates for very large crude carriers (VLCCs; tankers that carry 2 million barrels). “A terrible start of the year,” it said of rates for Suezmaxes (tankers that carry 1 million barrels).

According to Clarksons Platou Securities, average global spot rates for 10-year-old VLCCs fell to just $800 per day on Wednesday. That’s down 90% month on month and down 70% on average year to date versus the same period in 2021, to just a sliver of the breakeven rate of $26,000 per day. (The assessment for the Middle East-China route has just fallen back below zero, to -$400 per day, implying that freight is not covering the cost of fuel.)

“The end of the holiday season didn’t help push [VLCC] rates up,” said brokerage Banchero Costa.

Clarksons put 10-year-old Suezmax rates at $4,200 per day, down 69% month on month, versus a breakeven of $19,000 per day.

Crude tanker owners have been bleeding cash for over a year, and the market will have to absorb more new tonnage in 2022 than in 2021. There are 44 VLCCs and 39 Suezmaxes scheduled for delivery this year, versus 35 VLCCs and 23 Suezmaxes in 2021, according to Clarksons.

Product tankers

Crude tanker rates were so bad last year that a record number of newbuild VLCCs carried clean product cargoes during initial voyages after leaving Asian yards, cannibalizing volumes normally carried by larger product tankers. That practice looks set to continue. “Unfortunately, market information suggests that [VLCC] owners are still eyeing lifting clean cargoes on their newbuilds [into] early Q2 2022,” reported BRS.

As with crude tankers, it’s been a terrible start out the gate for product tankers in 2022.

Clarksons put spot rates for 10-year-old LR2s (larger product carriers with capacity of 80,000-119,999 deadweight tons or DWT) at $5,200 per day on Wednesday, 71% lower month on month and 38% lower on average year to date versus the same period in 2021, to less than a third of their $18,000-per-day breakeven rate.

Rates for smaller 10-year-old MRs (25,000-54,999 DWT) averaged $7,900 per day, down 49% month on month and 22% below their $11,000 breakeven rate.

“The second week of the year followed the same pattern as the first. All of the clean [product] routes are having difficulties,” said Banchero Costa.

Dry bulk

According to Stifel analyst Ben Nolan, “Dry bulk rates have been in freefall in recent weeks, primarily led by the large Capesize [180,000 DWT] vessels, but the weakness has been felt across the board.”

Clarksons estimated Wednesday’s Capesize spot rate at just $10,200 per day, down 55% month on month and far below the recent peak of $87,000 per day in early September (breakeven for a 10-year-old Capesize is estimated by Clarksons at $17,000 per day). Capesize rates year to date are 20% below their average during the same period last year.

It has been a “brutal start of the year” for Capesizes, said Fearnleys Research.

Spot rates for Panamaxes (bulkers with capacity of 65,000-90,000 DWT) averaged $20,000 per day on Wednesday, 9% lower month on month, while rates for Supramaxes (45,000-60,000 DWT) averaged $20,200 per day, 26% lower month on month. 

Month-on-month declines are to be expected now, given dry bulk seasonality, and on a positive note, rates in both of these segments are still sharply higher year to date on average versus the same period in 2021: Panamaxes by 73%, Supramaxes by 94%.

LNG shipping

Spot LNG shipping rates have fallen more steeply in terms of dollars per day than any other bulk commodity shipping segment.

Spot rates of tri-fuel diesel engine (TFDE) LNG carriers shot up to an average of $205,000 per day in late November and early December, according to Clarksons. There were reports of deals as high as $424,000 per day at the peak.

As of Wednesday, Clarksons estimated that TFDE carrier spot rates averaged just $22,000 per day, down 61% week on week and 81% month on month, to around one-ninth of the early December high. The average rate year to date is 76% lower than the same period in 2021.

Unlike dry bulk and tanker markets, however, LNG shipping is primarily a term-charter as opposed to a spot-voyage market, so spot rates are less telling. According to Clarksons Platou Securities analyst Frode Mørkedal, “The spot activity has been remarkably low, with only one voyage charter being done in the first two weeks of 2022. On the other hand, activity in the multi-month market has been healthy.

“The spot market may be under pressure at the moment, but charters continue to seek longer-term charter cover given the market backdrop,” he said.

Container shipping

Rates for crude tankers, product tankers, dry bulk carriers and LNG carriers have all gone the same way in the first few weeks of 2022: down.

Not so for container shipping.

Tanker rates are being weighed by COVID effects on mobility and aviation, and artificially constrained production by OPEC+ members. Dry bulk is being swayed by the Chinese economy (which is faltering) and state policies; seasonal weather conditions in Brazil, Australia and Asia that reduce rates at this time of year; and a coal export ban in Indonesia. LNG shipping rates are being driven by winter weather conditions, the spread in LNG commodity pricing between Europe and Asia, and the shift away from spot deals to long-term charters.

Container shipping rates are being heavily driven by persistently high U.S. consumer demand, which has overwhelmed transport supply, creating an extreme congestion situation that appears much “stickier” for rates than current drivers in other shipping segments.

The weekly Shanghai Containerized Freight Index is now just short of its all-time high. The weekly Drewry World Container Index (WCI) is at $9,545 per forty-foot equivalent unit, up 12% from early December and up 82% year on year. The WCI is 3.3 times higher year to date than the five-year average for that period.

There were a record high 106 container ships waiting to berth in Los Angeles/Long Beach on Friday, with 99 on Tuesday. On Friday, Maersk pre-announced Q4 2021 results that yet again topped its forecasts: earnings before interest, taxes, depreciation and amortization of $8 billion, bringing its full-year EBITDA to a record-trouncing $24 billion.

On Tuesday, a day when the broader stock market was deep in the red, shares of liner operator Zim hit a new 52-week high, while shares of container-ship lessor Danaos jumped 8% on news of $870 million in fresh charter revenues.

Deutsche Bank analyst Amit Mehrotra pointed to persistent container-shipping rate tailwinds in a research note on Tuesday. He noted that the retail sales-to-inventory ratio is now three standard deviations below its 10-year historical average and that this ratio is inversely correlated with container rates, “which makes sense as lower ratios imply strong consumer demand and the need for inventory restocking.”

“If we assume a reversion to pre-pandemic sales-to-inventory and use current demand, retailers would need $821 billion in inventory. Taking the fastest inventory has grown — which was November 2021, up $12 billion — it would take retailers 17 months to restock. 

“While we acknowledge restocking could be faster … as supply chains work themselves out, the resurgence of COVID, in our view, tempers the notion that the unwinding of the supply chain congestion will be … easy.

“We note that the LA/LB ports have three times the number of ships waiting as they did at the same point last year. In our view, it appears likely that the need for inventory restocking will be a persistent issue in 2022, with the likelihood of continuing into 2023.”

Tyler Durden Fri, 01/21/2022 - 11:00

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Lab, crab and robotic rehab

I was in Berkeley a couple of months back, helping TechCrunch get its proverbial ducks in a row before our first big climate event (coming in a few weeks,…

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I got previews of a number of projects I hope to share with you in the newsletter soon, but one that really caught my eye was FogROS, which was just announced as part of the latest ROS (robot operating system) rollout. Beyond a punny name that is simultaneously a reference to the cloud element (fog/cloud — not to mention the fact that the new department has killer views of San Francisco and frequent visitor, Karl) and problematic French cuisine, there’s some really compelling potential here.

I’ve been thinking about the potential impact of cloud-based processing quite a bit the last several years, independent of my writing about robots. Specifically, a number of companies (Microsoft, Amazon, Google) have been betting big on cloud gaming. What do you do when you’ve seemingly pushed a piece of hardware to its limit? If you’ve got low enough latency, you can harness remote servers to do the heavy lifting. It’s something that’s been tried for at least a decade, to varying effect.

Image Credits: ROS

Latency is, of course, a major factor in gaming, where being off by a millisecond can dramatically impact the experience. I’m not fully convinced that experience is where it ought to be quite yet, but it does seem the tech has graduated to a point where off-board processing makes practical sense for robotics. You can currently play a console game on a smartphone with one of those services, so surely we can produce smaller, lighter-weight and lower-cost robots that rely on a remote server to complete resource-intensive tasks like SLAM processing.

The initial application will focus on AWS, with plans to reach additional services like Google Cloud and Microsoft Azure. Watch this space. There are many reasons to be excited. Honestly, there’s a lot to be excited about in robotics generally right now. This was one of the more fun weeks in recent memory.

V Bionic's exoskeleton glove shown without its covering.

Image Credits: V Bionic

Let’s start with the ExoHeal robotic rehabilitation gloves. The device, created by Saudi Arabian V Bionic, nabbed this year’s Microsoft Imagine Cup. The early-stage team is part of a proud tradition of healthcare exoskeletons. In this case, it’s an attempt to rehab the hand following muscle and tendon injuries. Team leader Zain Samdani told TechCrunch:

Flexor linkage-driven movement gives us the flexibility to individually actuate different parts of each finger (phalanges) whilst keeping the device portable. We’re currently developing our production-ready prototype that utilizes a modular design to fit the hand sizes of different patients.

Image Credits: Walmart

This is the third week in a row Walmart gets a mention here. First it was funding for GreyOrange, which it partnered with in Canada. Last week we noted a big expansion of the retail giant’s deal with warehouse automation firm, Symbotic. Now it’s another big expansion of an existing deal — this time dealing with the company’s delivery ambitions.

Like Walmart’s work with robotics, drone delivery success has been…spotty, at best. Still, it’s apparently ready to put its money where its mouth is on this one, with a deal that brings DroneUp delivery to 34 sites across six U.S. states. Quoting myself here:

The retailer announced an investment in the 6-year-old startup late last year, following trial deliveries of COVID-19 testing kits. Early trials were conducted in Bentonville, Arkansas. This year, Arizona, Florida, Texas and DroneUp’s native Virginia are being added to the list. Once online, customers will be able to choose from tens of thousands of products, from Tylenol to hot dog buns, between the hours of 8 a.m. and 8 p.m.

Freigegeben für die Berichterstattung über das Unternehemn Wingcopter bis zum 25.01.2026. Mit Bitte um Urhebervermerk v.l.: Jonathan Hesselbarth, Tom Plümmer und Ansgar Kadura von Wingcopter GmbH. Image Credits: © Jonas Wresch / KfW

There are still more question marks around this stuff than anything, and I’ve long contended that drone delivery makes the most sense in remote and otherwise hard to reach areas. That’s why something like this Wingcopter deal is interesting. Over the next five years, the company plans to bring 12,000 of its fixed-wing UAVs to 49 countries across Sub-Saharan Africa. It will cover spots that have traditionally struggled with infrastructural issues that have made it difficult to deliver food and medical supplies through more traditional means.

“With the looming food crisis on the African continent triggered by the war in Ukraine, we see great potential and strong social impact that drone-delivery networks can bring to people in all the countries in Sub-Saharan Africa by getting food to where it is needed most,” CEO Tom Plümmer told TechCrunch. “Especially in remote areas with weak infrastructure and those areas that are additionally affected by droughts and other plagues, Wingcopter’s delivery drones will build an air bridge and provide food from the sky on a winch to exactly where it is needed.”

Legitimately exciting stuff, that.

Image Credits: Dyson

In more cautiously optimistic news, Dyson dropped some interesting news this week, announcing that it has been (and will continue) pumping a lot of money into robotic research. Part of the rollout includes refitting an aircraft hangar at Hullavington Airfield, a former RAF station in Chippenham, Wiltshire, England that the company purchased back in 2016.

Some numbers from the company:

Dyson is halfway through the largest engineering recruitment drive in its history. Two thousand people have joined the tech company this year, of which 50% are engineers, scientists, and coders. Dyson is supercharging its robotics ambitions, recruiting 250 robotics engineers across disciplines including computer vision, machine learning, sensors and mechatronics, and expects to hire 700 more in the robotics field over the next five years. The master plan: to create the UK’s largest, most advanced, robotics center at Hullavington Airfield and to bring the technology into our homes by the end of the decade.

The primary project highlighted is a robot arm with a number of attachments, including a vacuum and a human-like robot hand, which are designed to perform various household tasks. Dyson has some experience building robots, primarily through its vacuums, which rely on things like computer vision to autonomously navigate. Still, I say “cautiously optimistic,” because I’ve seen plenty of non-robotics companies showcase the technology as more of a vanity project. But I’m more than happy to have Dyson change my mind.

Image Credits: Hyundai

Hyundai, of course, has been quite aggressive in its own robotics dreams, including its 2020 acquisition of Boston Dynamics. The carmaker this week announced that part of its massive new $10 billion investment plans will include robotics, with a focus of actually bringing some of its far-out concepts to market.

Another week, another big round for logistics/fulfillment robotics, as Polish firm Nomagic raised $22 million to expand its offerings. The company’s primary offering is a pick and place arm that can move and sort small goods. Khosla Ventures and Almaz Capital led the round, which also featured European Investment Bank, Hoxton Ventures, Capnamic Ventures, DN Capital and Manta Ray.

Amazon Astro with periscope camera

The periscope camera pops out and extends telescopically, enabling Astro to look over obstacles and on counter tops. A very elegant design choice. Image Credits: Haje Kamps for TechCrunch

We finally got around to reviewing Amazon’s limited-edition home robot, Astro, and Haje’s feelings were…mixed:

It’s been fun to have Astro wandering about my apartment for a few days, and most of the time I seemed to use it as a roving boom box that also has Alexa capabilities. That’s cute, and all, but $1,000 would buy Alexa devices for every thinkable surface in my room and leave me with enough cash left over to cover the house in cameras. I simply continue to struggle with why Astro makes sense. But then, that’s true for any product that is trying to carve out a brand new product category.

A tiny robot crab scuttles across the frame. Image Credits: Northwestern University

And finally, a tiny robot crab from Northwestern University. The little guy can be controlled remotely using lasers and is small enough to sit on the side of a penny. “Our technology enables a variety of controlled motion modalities and can walk with an average speed of half its body length per second,” says lead researcher, Yonggang Huang. “This is very challenging to achieve at such small scales for terrestrial robots.”

Image Credits: Bryce Durbin/TechCrunch

Scuttle, don’t walk to subscribe to Actuator.

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Asymptomatic SARS-CoV-2 infections responsible for spreading of COVID-19 less than symptomatic infections

Based on studies published through July 2021, most SARS-CoV-2 infections were not persistently asymptomatic, and asymptomatic infections were less infectious…

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Based on studies published through July 2021, most SARS-CoV-2 infections were not persistently asymptomatic, and asymptomatic infections were less infectious than symptomatic infections. These are the conclusions of an update of a systematic review and meta-analysis publishing May 26th in the open access journal PLOS Medicine by Diana Buitrago-Garcia of the University of Bern, Switzerland, and colleagues.

Credit: Monstera, Pexels (CC0, https://creativecommons.org/publicdomain/zero/1.0/)

Based on studies published through July 2021, most SARS-CoV-2 infections were not persistently asymptomatic, and asymptomatic infections were less infectious than symptomatic infections. These are the conclusions of an update of a systematic review and meta-analysis publishing May 26th in the open access journal PLOS Medicine by Diana Buitrago-Garcia of the University of Bern, Switzerland, and colleagues.

Debate about the level and risks of asymptomatic SARS-CoV-2 infections continues, with much ongoing research. Studies that assess people at just one time point can overestimate the proportion of true asymptomatic infections because those who go on to later develop symptoms are incorrectly classified as asymptomatic rather than presymptomatic. However, other studies can underestimate asymptomatic infections with research designs that are more likely to include symptomatic participants.

The new paper was an update of a living (as in, regularly updated) systematic review first published in April 2020, which includes additional, more recent studies through July 2021. 130 studies were included, with data on 28,426 people with SARS-CoV-2 across 42 countries, including 11,923 people defined as having asymptomatic infection. Because of extreme variability between included studies, the meta-analysis did not calculate a single estimate for asymptomatic infection rate, but it did estimate the inter-quartile range to be that 14–50% of infections were asymptomatic. Additionally, the researchers found that the secondary attack rate—a measure of the risk of transmission of SARS-CoV-2 — was about two-thirds lower from people without symptoms than from those with symptoms (risk ratio 0.32, 95%CI 0.16–0.64).

“If both the proportion and transmissibility of asymptomatic infection are relatively low, people with asymptomatic SARS-CoV-2 infection should account for a smaller proportion of overall transmission than presymptomatic individuals,” the authors say, while also pointing out that “when SARS-CoV-2 community transmission levels are high, physical distancing measures and mask-wearing need to be sustained to prevent transmission from close contact with people with asymptomatic and presymptomatic infection.”

Coauthor Nicola Low adds, “The true proportion of asymptomatic SARS-CoV-2 infection is still not known, and it would be misleading to rely on a single number because the 130 studies that we reviewed were so different. People with truly asymptomatic infection are, however, less infectious than those with symptomatic infection.”

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In your coverage, please use this URL to provide access to the freely available paper in PLOS Medicine:

http://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1003987  

Citation: Buitrago-Garcia D, Ipekci AM, Heron L, Imeri H, Araujo-Chaveron L, Arevalo-Rodriguez I, et al. (2022) Occurrence and transmission potential of asymptomatic and presymptomatic SARS-CoV-2 infections: Update of a living systematic review and meta-analysis. PLoS Med 19(5): e1003987. https://doi.org/10.1371/journal.pmed.1003987

Author Countries: Switzerland, France, Spain, Argentina, United Kingdom, Sweden, United States, Colombia

Funding: This study was funded by the Swiss National Science Foundation http://www.snf.ch/en (NL: 320030_176233); the European Union Horizon 2020 research and innovation programme https://ec.europa.eu/programmes/horizon2020/en (NL: 101003688); the Swiss government excellence scholarship https://www.sbfi.admin.ch/sbfi/en/home/education/scholarships-and-grants/swiss-government-excellence-scholarships.html (DBG: 2019.0774) and the Swiss School of Public Health Global P3HS stipend https://ssphplus.ch/en/ (DBG). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.


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Harsher COVID-19 restrictions associated with faster “pandemic fatigue”

Between November 2020 and May 2021, adherence to COVID-19 pandemic restrictions decreased in Italy, with the fastest decreases taking place during times…

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Between November 2020 and May 2021, adherence to COVID-19 pandemic restrictions decreased in Italy, with the fastest decreases taking place during times of the most stringent restrictions, according to a new study publishing May 26th in the open-access journal PLOS Digital Health by Laetitia Gauvin of ISI Foundation, Italy, and colleagues.

Credit: Ben Garratt, Unsplash (CC0, https://creativecommons.org/publicdomain/zero/1.0/)

Between November 2020 and May 2021, adherence to COVID-19 pandemic restrictions decreased in Italy, with the fastest decreases taking place during times of the most stringent restrictions, according to a new study publishing May 26th in the open-access journal PLOS Digital Health by Laetitia Gauvin of ISI Foundation, Italy, and colleagues.

Pandemic fatigue, the decreased motivation to adhere to social distancing measures and adopt health-protective behaviors, represents a significant concern for policymakers and health officials. In the time period spanning November 2020 to May 2021 in Italy, tiered restrictions were adopted to mitigate the spread of COVID-19, with regions declared red, orange, yellow or white depending on their health data. Restrictions ranged from a nighttime curfew in the yellow tier to general stay-at-home mandates in the red tier.

In the new study, the researchers used large-scale mobility data from Facebook and Google captured in all 20 Italian provinces in 2020 and 2021 to analyze the timing of pandemic fatigue. Facebook reports the change in a user’s number of movements over time, while Google data estimates the change in time spent at home.

People’s relative change in movements increased an average of 0.08% per day and their time spent outside the home increased by an average 0.04% per day, leading to a more than 15% increase in relative mobility over the entire seven-month study period. During times of red tier restrictions, individual mobility increased an additional 0.16% per day and time spent outside the home increased an additional 0.04% when compared to the average. This means that during every 2-week period spent in the red tier, there would be an additional average 3% increase in relative mobility.

The authors conclude that changes to pandemic restrictions are faster during periods characterized by the strictest levels of restrictions. However, they acknowledge that the data used are subject to bias since they include only Facebook and Google users who opted-in to location sharing. In addition, untangling the combined effects of vaccination and new pandemic variants on adherence to pandemic restrictions was not within the scope of the study and requires more work.  It is also important to note that the study did not investigate on the effectiveness of each tiered restriction against the spread of SARS-CoV-2.

Gauvin adds, “By analyzing mobile phone-derived mobility data in Italy, we investigated how adherence to COVID-19 restrictions changed over time, under different levels of increasing stringency. Our results show that adherence can be difficult to sustain over time and more so when the most stringent measures are enforced. Given that milder tiers have been proven to be effective in mitigating the spread of COVID-19, our study suggests policymakers should carefully consider the interplay between the efficacy of restrictions and their sustainability over time.”

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In your coverage, please use this URL to provide access to the freely available article in PLOS Digital Health: https://journals.plos.org/digitalhealth/article?id=10.1371/journal.pdig.0000035

Citation: Delussu F, Tizzoni M, Gauvin L (2022) Evidence of pandemic fatigue associated with stricter tiered COVID-19 restrictions. PLOS Digit Health 1(5): e0000035. https://doi.org/10.1371/journal.pdig.0000035

Author Countries: Italy

Funding: The study was partially supported by the Lagrange Project of the ISI Foundation funded by the CRT Foundation. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.


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