Bangkok’s Suvarnabhumi Airport has seen spikes in modal shift from sea to air this year, as the Red Sea crisis continues to put global supply chains under strain.

A source at the Thai international gateway said airfreight exports had shot up 58% in January, with air imports surging 29% year on year, and that the shift had continued into February.

They told The Loadstar: “February airfreight volumes were up 30% year on year,” noting that the airport was not “traditionally a sea-air hub”.

That was in reference to the latest WorldACD update, which lists Bangkok as one of three gateways to have witnessed a “strong sea-air surge” in the closing weeks of February, with Colombo and Dubai also listed as beneficiaries of the trend.

Dubai saw an explosion in airfreight, up 146% year on year during weeks 7 and 8; Colombo’s climbing 80%.

WorldACD said the “exceptionally high demand” was being driven by “cargo owners whose supply chains have been disrupted by attacks on container shipping in the Red Sea” seeking “fast but affordable alternatives to deliver to Europe from Asia Pacific”.

The update noted that volume growth at Bangkok dipped to 15% during week 8, suggesting a “moderating of demand on that lane”.

However, it may also have been tied to Bangkok Flight Services (BFS) having announced a 24-hour embargo on imports between the 13 and 14 February, as it struggled to contend with what it described as a “surprise surge” in demand. This mirrored a similar decision at Dubai’s dnata handling group a day before, an embargo which, unlike BFS’s, lasted 48 hours.

BFS said: “Due to unprecedented volumes, due to the Red Sea crisis resulting in a modal shift from sea to air, and a higher-than-expected surge prior to Chinese New Year, we have built up a backlog of cargo for processing and have had to suspend processing of imports.”

Such was the impact of the collective spikes at Bangkok, Colombo and Dubai, that worldwide airfreight volumes grew a record 9% week on week in the seven days to 25 February.

During the wider two-week period covered by WorldACD though, global tonnages were down 11% against the preceding two weeks, and it cited big drops in exports out of Asia-Pacific (down 24%) and Central and South-America (down 25%).

Only European exports (up 3% ) and the Middle East and South Asia (up 11%) saw any real growth over the two weeks, with Africa down 8% and North America down 1%.

President Joe Biden today launched a sweeping Executive Order designed to give the Department of Homeland Security and the U.S. Coast Guard broader authority in strengthening maritime cybersecurity. Under the guise of strengthening the nation’s supply chains and security, the administration is highlighting a plan to invest over $20 billion over the next five years in port infrastructure including an effort to reestablish domestic crane manufacturing to end Chinese dominance in large cargo cranes.

“Every day malicious cyber actors attempt to gain unauthorized access to the Marine Transportation System’s control systems and networks,” The White House wrote in announcing the Executive Order.  Without citing any specific examples and saying the move was not in response to a specific threat, the order is designed to bolster the security of the nation’s ports along with actions to strengthen maritime cybersecurity, fortify supply chains, and strengthen the U.S. industrial base they said.

While there have been multiple instances of port authorities, terminal operators, and shipping companies all experiencing hacking and cyberattacks, the issue of Chinese-manufactured cargo cranes surfaced nearly a year ago after The Wall Street Journal ran a story citing unnamed sources alleging a threat from the Chinese either spying on U.S. ports or having the potential to control the cranes remotely. The American Association of Port Authorities (AAPA) strongly refuted the accusations calling them “sensationalized claims” and saying that there is no evidence of the cranes being used to harm or track port operations.

In the Executive Order signed today by President Biden, the Department of Homeland Security is directed to address maritime cyber threats, including setting cybersecurity standards. The U.S. Coast Guard is given authority to respond to malicious cyber activity, including the authority to “control the movements of vessels that present a known or suspected cyber threat.”

It also institutes mandatory reporting of cyber incidents or active cyber threats. This includes threats to vessels, harbors, ports, or waterfront facilities. The U.S. also intends to name a Maritime Security Director.

The USCG is directed to issue a Maritime Security Directive “on cyber risk management actions for ship-to-shore cranes manufactured by the People’s Republic of China located at U.S. commercial strategic seaports.” The owners and operators of the cranes “must acknowledge the directive” and take action on the cranes and the associated information and operational technologies.

“Several vulnerabilities have been identified,” according to The White House in a MARAD advisory that is being released today. In a background briefing, Rear Admiral John Vann of the USCG said they were already assessing 200 cranes for cybersecurity vulnerabilities. He pointed out that by design the cranes and software have remote programming capabilities and tracking devices built into their systems which he contended are “vulnerable to exploitation.”

Without specifically citing the cranes, the FBI and other security agencies have warned of a potential threat from China or other malicious actors to U.S. infrastructure.

The White House today highlighted an agreement with PACECO Corp., a U.S.-based subsidiary of Japan’s Mitsui E&S Co., which they report is planning to relaunch a U.S. manufacturing capability for cranes. They emphasized that the company was a pioneer in 1958 with the first dedicated ship-to-shore container crane but ended U.S.-based crane manufacturing in the late 1980s. PACECO is reported to be looking for partners and a site but plans on manufacturing cranes in the U.S. for the first time in 30 years.

Currently, 70 to 80 percent of the large, container cranes used in ports worldwide are manufactured by ZPMC, a company headquartered in China. Emerging as a lower-cost alternative, and in many cases, the only viable supplier, the company’s large ship-to-shore cranes are deployed in over 100 countries.

Last year, lawmakers in the U.S. House of Representatives proposed the Port Crane Security & Inspection Act addressing any crane manufactured by a “foreign adversary,” and also a “crane for which any information technology and operational technology components in such crane is connected into cyberinfrastructure at a port located in the United States.”

AAPA highlighted that the Chinese company built its lead by being the only major manufacturer of large cranes. They called on the U.S. Congress to focus on efforts to reshore the manufacturing of cranes to the U.S. as a means of supporting American industry and ports.

Many of the elements of these initiatives appear to have influenced the content of the Executive Order signed today. The USCG reports it opened a public comment period running until late April as it moves forward to enact the new rules.

Despite all the challenges being reported for container shipping and the negative outlook presented by the carriers, U.S. import container volumes are soaring and expected to continue their upward momentum through at least the first half of 2024. This comes as economists continue to point to the resiliency of the economy and the apparent soft landing to the feared 2023 recession.

U.S. container import volume had its largest month-over-month gain in January 2024 in the last seven years according to data released by Descartes Systems Group, a software provider for logistics-intensive businesses. Their February Global Shipping report highlights a 7.9 percent increase in overall container import volume in the U.S. in January 2024 versus December. They report a nearly 15 percent rise in imports from China, highlighting that most of the volume went to the ports of Los Angeles and Long Beach.

The strong growth in January 2024 also brought container volumes back up to year-ago levels and even slightly ahead of January 2019 before the pandemic. Descartes calculates volumes were up nearly 10 percent year-over-year to a total of 2.27 million TEU in January 2024. This is also 9.6 percent ahead of January 2019.

“January was another solid month driven by surprisingly strong imports from China,” said Chris Jones, EVP Industry and Services, Descartes. He however warns, “The combined effect of the Panama drought and the conflict in the Middle East is beginning to impact transit times, particularly at the top East and Gulf coast ports.”

Descartes cautions that the global supply chain performance could be impacted throughout 2024. They highlight the ongoing limits of transits at the Panama Canal, the disruptions to routes through the Red Sea and Suez Canal, and the upcoming labor negotiations at U.S. Atlantic and Gulf Coast ports. The International Longshoremen Association reported it has given its locals a May 2024 deadline as it works to complete a master contract before the September 30, 2024, expiration.

The National Retail Federation, the trade group for U.S. retailers, is also predicting a strong start to 2024 with a forecast of a better than five percent increase in import container volumes for the first half of 2024 versus 2023. Their Global Port Tracker is forecasting a strong gain of 20 percent for February in part due to the timing of the Lunar New Year in 2023 and the beginning of a slowdown in import volumes a year ago.

“U.S. retailers are working to mitigate the impact of delays and increased costs,” says Jonathan Gold, NRF Vice President for Supply Chain and Customs Policy, discussing the ramifications of the Suez Canal and Red Sea disruptions. He highlights that only about 12 percent of U.S.-bound cargo comes through the Suez Canal,” but warns like others, “the longer the disruptions occur, the bigger impact this could have.”

After a strong February, the NRF predicts volumes will be up at a more moderate pace in the first half of the year. They forecast between 2.65 percent and 5.5 percent gains with only May expected to be flat with the year-ago. Monthly retail import volumes are projected at between 1.7 and 1.9 million TEU per month.

A month after the Panama-flagged Genius Star XI diverted to Alaska after reporting a cargo fire, the vessel has finally been permitted to dock to prepare for its onward voyage. The U.S. Coast Guard confirmed that the vessel was permitted to move to the dock in Dutch Harbor, Alaska on January 30 to provide a safer environment and streamline the logistics for the next phase recovery operation.

The 13,600 dwt cargo ship operated by Taiwan’s Wisdom Line was crossing the Pacific when the crew reported a cargo fire. It was contained to the No. 1 hold and believed to have been extinguished with the onboard CO2 system. A second fire was later discovered in the No. 2 hold after the vessel had exhausted its CO2 supply. The Genius Star XI was 225 miles southwest of Alaska when the fire was reported, however, by the time the ship reached Dutch Harbor early on December 30 the USCG reported normal heat signatures from the holds.

The vessel however was held at anchor in Broad Bay while temperature measurements were taken. By early January, they began ventilating the cargo holds with an air circulation system devised by the salvage team while plans were developed for the operation. The holds were initially kept sealed to prevent a reflash, but the plan was later to open them for a visual inspection of the cargo.

The suspicion remains that the fire was in part caused by the shifting of the cargo during rough seas on the Pacific crossing. In the next phase of the operation, the USCG reports salvage teams will work to rescue the cargo and prepare the ship to proceed. They emphasized that no cargo would be offloaded but that crews would work to secure the cargo.

“Moving the ship to a pier allows workers a safer and more efficient environment to work and mitigates work delays caused by weather or rough seas,” said Capt. Chris Culpepper, Captain of the Port for the USCG operation based in Anchorage, Alaska. “Based on the recommendations of several agencies and technical experts we are confident operations can be conducted safely and with no additional risk to the community to expedite preparing the vessel to continue its voyage.”

The Genius Start XI carries 152 CO2 bottles in its fire suppression system. All the bottles were offloaded from the vessel and were being recharged onshore. The Coast Guard is requiring that the system be refilled with the bottles back aboard the vessel before it departs Alaska.

No timeline was reported for the operation and when the vessel would be able to proceed. It left Vietnam on December 10 with a stop in Korea on December 18. The ship was heading to California with its cargo when the fire was reported.