Insights by Auba (Nov 1st): The Impact of Disruptions in Global GDP

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The Busiest Ports in Mexico

It's been a tough year for logistics. Across of 2024, the industry has lived through a number of challenges, from issues in the Panama Canal , to the blockade of the Red Sea by Houthi rebels .

Given how prominent these disruptions have been, we wanted to look more closely at how they have impacted the world of logistics over the last couple of months. And, most importantly, using recent data published by the United Nations , we wanted to provide an estimate of how much these disruptions cost to the global economy—an impact that is now estimated at well over $63 bn.

So, what is happening?

On the one hand, the Panama Canal, one of the world's most critical maritime passages, faced an unprecedented crisis when extreme droughts lowered its water levels drastically. On the other side of the globe, Houthi rebels in Yemen launched a series of targeted attacks on vessels in the Red Sea, disrupting access to the Suez Canal.

Together, these events contributed to a marked increase in the average nautical miles traveled in seaborne trade, which rose from 5,047 miles in 2023 to an anticipated 5,186 miles in 2024. This increase may appear modest on paper but represents a significant operational change for the global shipping industry, affecting scheduling, fuel consumption, and freight costs. More so when noticing the drastic up tick in travel for container ships.

Read more below:

The Week in Short

?? Container shipping lines successfully implemented a general rate increase (GRI) on Asia-Europe routes this week, halting a 15-week decline in spot freight rates, with the Shanghai-Rotterdam rate rising 8% to $3,396 per 40ft (more on Freight Waves ).?

?? The refrigerated cargo sector is experiencing robust growth and drawing new investments, with North American ports, like Wilmington, North Carolina, investing heavily in modern cold storage facilities to meet rising demand. These new cold chain warehouses, replacing older, inefficient facilities, enable ports to handle high-margin goods like meats, produce, and pharmaceuticals (more on GCaptain ).??

???? The Panama Canal faced a 29% decline in transits in FY2024, with deep-draught transits down 21% due to drought-induced water-saving measures. Despite these challenges, the Canal Authority reported a $300 million increase in net income, and projected revenue of $5.62 billion, driven by strategic fees and operational adjustments (more on Sea Trade Maritime ).

?? A new National Academy of Sciences report calls claims of a long-term truck driver shortage "spurious," arguing that high turnover stems from industry practices aimed at reducing costs rather than structural labor shortages (more on Freight Waves ).

???? CMA CGM and Marsa Maroc formed a joint venture to invest $280 million in a new container terminal at Morocco's Nador West Med port, with CMA CGM holding a 49% stake and Marsa Maroc 51%. The 25-year project will include a 750-meter quay and 35 hectares of yard, targeting a 1.2 million TEU capacity (more on Sea Trade Maritime ).?

???? French MPs adjusted a finance bill to make a temporary windfall tax on ocean shipping operators permanent and modified the tonnage tax regime, imposing additional financial pressures on CMA CGM. Initially meant as a temporary measure for 2025-2026, the tax targets shipping lines with annual revenues exceeding €1 billion—impacting only CMA CGM (more on Load Star ).?

?? The Federal Railroad Administration’s CRISI grant program awarded over $2.4 billion across 122 rail projects in 41 states and D.C., aiming to bolster rail infrastructure, job creation, workforce training, and sustainable freight transport. Key grants include $100 million for California’s Surf Line, $105.6 million for North Carolina capacity enhancements, and $72.8 million to Wisconsin’s Muskego Yard Bypass (more on Freight Waves ).??

That is all for this week, but make sure to follow Auba to stay up to date on all things supply chain and logistics