The latest news in the logistics industry 07/27/2023

This newsletter's summary

Figure of the week

-8,2%

The decline in the volume of containers processed by the port of Rotterdam in the first half of the year, compared to the same period of 2022. The largest port in Europe does not expect a rebound in the second half of the year.

The Trans-Pacific is rebounding, but it may already be over

Following the China-Northern Europe and India-Europe routes, some companies are seeking to drive upward rates between Asia and the Mediterranean, a route that has resisted better in recent months. Spot rates are still around?50% higher?there than on the Asia-Northern Europe route, according to Drewry’s World Container Index. The index, slightly down, reached last week at 1902 USD/FEU between Shanghai and Geneva.

Maersk?was the first company to unlock, with an announcement of a raise in Freight All Kinds (FAK) rates, which will reach?between 2,300 USD/FEU?for Barcelona and?3,600 USD/FUE?for Morocco. (Casablanca). They will be effective on 31 July and valid until the end of the maximum year.

As of August,?MSC?will charge 1762 USD/TEU between Asia and the western Mediterranean ports, compared to 2100 USD/TEU for?CMA CGM. Cosco, on the other hand, raises its FAK rates to 1850 USD/EVP between China and Italy. It remains to be seen now whether the market, based on supply and demand, will “validate” these forced increases, presented by the companies as “indispensable” forining the quality of service.

Asia-Europe: Blank sailings at their lowest as a new wave of capacity unfolds

Everyone has announced them, but it is hard to see that they are not actual yet. Blank sailings remain at?exceptionally low levels?on the Asia-Europe maritime route, even the lowest in two years. According to Sea-Intelligence, the share of cancelled flights reached?8.7% in July. Forecasts give a blank sailing rate of 6.4% in August, but this figure is expected to continue to evolve.

This weakness of the blank sailings on the European road is?surprising?in several titles. It does not follow the trend observed on the Trans-Pacific, where cancellations are much more numerous, and especially intervenes when demand does not rebound and capacity, linked to the delivery of new container carriers, flows on trade.

The investment bank Stifel estimates that the overall capacity will continue to grow sharply throughout the year. Sea-Web estimates that the current and confirmed order book exceeds?7.3 million EVPs, which is around 30% of the current active fleet. For its part, Drewry forecasts the delivery of 2.5 million EVPs of additional capacity this year.

CMA CGM?expects, for example, 500,000 EVP capacity from new container carriers only by the end of 2024, according to Alphaliner. Its total order book would now consist of?122 ships, meaning 1.24 million EVPs. By 2025 or 2026, the company from Marseille is expected to become the world’s second largest company in terms of capacity, ahead of Maersk.

Aerial: Summer hole for traffic to Europe

The air freight market continues to go through the summer in a form of soft stability. Demand during week 28 (July 10 to 16) increased slightly (+2%), but over the entire first half of July, the tonnage transported?dropped by 3%?compared to 2022, according to WorldACD data. The most interesting thing is to observe the regional contrasts.

Some regions show dynamism while others evolve in negative territory. In the 27th and 28th weeks, for example, tonnages increased by?3% in the Trans-Pacific?when they declined significantly in the trans-Atlantic in the North America-Europe direction?(-16%)?or between Asia Pacific and Europe?(-4%).

In terms of freight rates, they remain fairly stable overall, even though they?decline by an average of 4% between Asia and Europe. For its part, global air freight capacity remains 8% higher than a year ago, and even 33% more from Asia-Pacific. As a reminder, in the summer of 2022, China was still fighting Covid-19 and had largely closed its borders.

In short. Lithium: Air France KLM Martinair Cargo certified.?The French airline has obtained the IATA Center of Excellence for Independent Validators Lithium Batteries (CEIV Libatt) certification for its hubs in Paris Charles de Gaulle and Chicago O'Hare.

This benchmark certification crowns maximum compliance with safety obligations and regulations surrounding the transport of lithium batteries, a highly sensitive subject for the air freight industry.

???Until Next Week

DocShipper Team

Sources

https://www.drewry.co.uk/supply-chain-advisors/world-container-index-weekly-update/world-container-index-assessed-by-drewry

https://theloadstar.com/maersk-pins-hopes-on-asia-med-trade-and-unveils-fak-price-hikes/

https://www.joc.com/article/asia-europe-ocean-carriers-look-steady-market-august-rate-hikes_20230724.html

https://www.joc.com/article/asia-europe-blank-sailings-hit-two-year-low-despite-sluggish-market_20230719.html

https://theloadstar.com/with-122-new-ships-on-the-way-cma-cgm-has-maersk-in-its-sights/

https://www.joc.com/article/rotterdam-posts-sharp-drop-h1-volume-provides-muted-full-year-outlook_20230720.html

https://www.afklcargo.com/