Korean Air Weathered Pandemic Turbulence With Style


Cargo has turned out to be the difference maker for airlines navigating the pandemic, says The Wall Street Journal. Just look at Korean Air.

South Korea’s flag carrier has prospered since taking an initial sharp hit in the early days of the global health crisis, and that’s largely because it expanded its substantial cargo business.

Many airlines turned to cargo as a savior as travel virtually shut down in 2020, but Korean Air was starting from a strong position as one of the world’s largest cargo-carrying passenger airlines and the owner of a big fleet of freighters.

Korean Air counted 42% more freight traffic in the second quarter compared with spring 2019, and cargo revenue was up 44% year over year. Airfreight rates now are pulling back, but the carrier is building up passenger business at the same time.

Europe’s Natural-Gas Crunch Sparks Global Battle for Tankers


Europe’s energy crisis is unleashing a global battle over liquefied natural-gas (LNG) tankers. The Wall Street Journal reports that rates to charter the specialized ships are jumping to record highs and the competition is eating up shipping capacity while higher transport costs are helping push gas prices to record highs in Europe and Asia.

The tanker race is another sign of the reshuffling of the global energy map following Russia’s invasion of Ukraine. The war has intensified competition for tight energy supplies, reoriented commodity flows and fractured parts of the global oil-and-gas market.

One expert says just one LNG tanker is available for charter for a single voyage in Asia two months or more from now, and none is available in the Atlantic.

Traders are going on a buying spree, shelling out $24.1 billion on orders for new LNG tankers so far in 2022.

CHIPS and Science Act Will Strengthen Supply Chains, and Counter China, Biden Claims


President Biden signed into law Aug. 9 the bipartisan CHIPS and Science Act of 2022, as part of an industrial strategy to revitalize domestic manufacturing, create good-paying American jobs, strengthen American supply chains, and accelerate the industries of the future.

The White House said the Act will strengthen American manufacturing, supply chains, and national security, and invest in research and development, science and technology, and the workforce of the future to keep the United States the leader in the industries of tomorrow, including nanotechnology, clean energy, quantum computing, and artificial intelligence.

Spurred by the passage of the Act, companies have announced nearly $50 billion in additional investments in American semiconductor manufacturing, bringing total business investment to nearly $150 billion since President Biden took office.

Micron is announcing a $40 billion investment in memory chip manufacturing, critical for computers and electronic devices, which will create up to 40,000 new jobs in construction and manufacturing. This investment alone will bring the U.S. market share of memory chip production from less than 2% to up to 10% over the next decade.

Maersk Buys Danish Project Logistics Company for $61 Million


A.P. Moller Maersk A/S agreed to by a Danish project logistic company as the transport giant spends some of its windfall from surging container rates to expand its land-based operations.

Maersk will pay $61 million in enterprise value for Martin Bencher Group, the Copenhagen-based company said in a statement on Friday. Maersk said it’s paying a multiple of 7.1 times estimated 2021 earnings before interest, tax, depreciation and amortization for the firm.

Maersk, which controls about one-sixth of the world’s container trade, earlier this week raised its 2022 profit forecast to a record $31 billion as bottlenecks in key trade lanes continue to boost rates. The company is pursuing a strategy to build out its land-based logistic — where profit margins historically have been higher than at sea — through takeovers and organic growth.

Taiwan Turmoil Prompts Detours and Delays for Global Shipping


China’s announcement of military drills around Taiwan as U.S. House Speaker Nancy Pelosi visits the island is already having ripple effects across global supply chains, prompting detours and causing delays of energy shipments.

Gas suppliers are rerouting or reducing speed on some liquefied natural gas vessels currently en route to North Asia, according to people familiar with the matter. Shipments to Taiwan and Japan this weekend will be affected, said the people, who requested anonymity as the information isn’t public.

Shipping companies are reassessing their options after China’s response to the visit of the highest-ranking U.S. official to the island in 25 years. The actions threaten to disrupt one of the world’s busiest waterways.