Chairman's message
As we usher in the New Year 2023, I can’t help but look back at the series of events in the past year. It has been yet another eventful year for the world. With the ongoing COVID-19 pandemic, 2022 had seen the continued impact of inflation, further worsened by the Russian’s invasion of Ukraine. With the lower volume demand and the shift in supply chains, there was no longer the peak in cargo demands and pre-holiday volume surge prior to China’s golden week and the year-end festive period. 2022 was also the year where COVID-19 restrictions were lifted in many countries and the reopening of international borders, including China lately. This has laid a good foundation for normalization of logistics flow globally.
For ocean freight, 2021 was a phenomenon year of unprecedented record rates, and the trend continued into 2022. With the easing of capacity and port constraints and the drastic dip in rates starting from 3rd quarter of 2022, shipping carriers did all they could with blank sailings and other measures to mitigate the sharp decline in demand and to prevent the rates from plunging.
The global supply chain have already been repeatedly tested in the past few years with challenges on labour shortages, port congestions, capacity issues, inflation etc. 2023 is expected to be a much tougher year to come.
With the easing of supply chain pressures and the fast sliding container freight rates, there is a need to actively manage our procurement strategy to remain cost effective while working with reliable carriers.?Similarly, in the face of the challenging environment, we shall work closely with our suppliers and vendors to reduce costs through efficient operations.
We expect the migration of factories from China to S.E. Asia to continue to gather momentum.?There will be a trend of diversification to have multiple suppliers and manufacturing locations especially in Asia.?Being well placed as Asia’s leading consolidator, this presents an opportunity for our continual expansion of our core LCL services for intra-Asia and Asia export services.
The risk of economic recession due to the conflict between Russia and Ukraine and global inflation adds to the uncertainty of the business environment, which may reduce the number of direct LCL services in the market. To serve our forwarder customers, we are ready to expand on our comprehensive hub solutions to provide cargo flow optimization and connectivity.
Sustainability continues to be a hot topic for the shipping industry. With the new regulations from IMO, the Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII) are being enforced in 2023 to reduce the carbon intensity, and these would likely reduce the shipping capacity as vessels are required to sail at slower speeds to comply, given the shortage and high price of biofuels. With the record number of new container ships to be delivered in 2023 and 2024, there is a possibility of oversupply and likelihood of older vessels being retired. With such complications and complexity, the shipping lines’ attempt to make capacity adjustments on their services remains to be seen.
领英推荐
In the face of an uncertain year ahead, we remain confident of our strengths and resilience as a tightly knit network to overcome the challenges with the Globelink Group as one.?Our sales and marketing efforts will be better tuned to serve as reliable long term service providers to meet our customers’ needs and compete for every cbm of cargo.
For me personally, this is a special year as it marks the 50th year or half of a century in my career history. I have personally witnessed the up and down of the market over the years and I thank all the customers and partners for your strong support. We will continue with our internal digitalisation journey and to provide you with greater values as we weather the storm together.
Let me take this opportunity to wish all our customers and partners a Happy and Prosperous New Year!
Mr Tan Choon Wei
Executive Chairman