WEEKLY MARKET UPDATE 02/15/ 2024
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This newsletter's summary
Figure of the week
4%
In the past month, global air cargo capacity dropped by 4% compared to the previous month.
Quote of the week
“In many cases, the real work of a company occurs in its supply chain and not in its marketing or sales departments.”
-John Gattorna
Red Sea Crisis Sparks Charter Market Surge
The Houthi military actions have disrupted trade routes to the Mediterranean, Northern Europe, the Middle East, and India post the Gaza war, leading vessel owners to divert tonnage from the Red Sea/Suez Canal route.
Around 50% of vessels are diverting, prompting liner carriers like Maersk Line, CMA CGM, and Hapag-Lloyd to charter vessels for medium-term disruption mitigation. The charter market, especially for feeder vessels, has seen increased activity, with average charter periods extending to 12 months.
However, a slowdown in vessel demolitions, attributed to the Red Sea crisis, may exacerbate fleet growth, potentially leading to a shortage of feeder and regional ships by 2027. This lack of investment in smaller tonnage has driven the growth of average feeder sizes, but future increases may be impractical due to infrastructure constraints.
Bangkok Flight Services Implements Cargo Import Embargo
Amidst a surge in cargo volumes attributed to the Red Sea crisis and the upcoming Lunar New Year, Bangkok Flight Services (BFS) has announced a temporary embargo on general cargo imports at Suvarnabhumi Airport.
The embargo, effective from February 12 to 18, comes as BFS's warehouse capacity reaches its limit. Meanwhile, other cargo categories and services will continue as usual.
This move follows a similar embargo by dnata in Dubai. The surge in air cargo volumes is attributed to a modal shift from sea to air and preparation for the Lunar New Year.
Weekly logistics trivia
James E. Casey is an American businessman who played a significant role in revolutionizing the transportation and delivery industry by founding the United Parcel Service (UPS) in 1907.
领英推荐
Casey had several logistics strategies and characteristics, these are:
Casey's innovative approach to package delivery and his emphasis on customer service laid the foundation for UPS's success and its evolution into one of the world's largest and most trusted logistics companies. His visionary leadership and dedication to efficiency and reliability have left a lasting legacy in the field of logistics.
Hupac's 2023 performance highlights European rail challenges
In 2023, Hupac experienced an 11.7% decline in traffic volumes compared to 2022, transporting around 975,000 road consignments, equivalent to 1,866,000 TEUs. This decline affected all transport segments, with transalpine transport experiencing a moderate drop of 7.6%.
Despite challenges, Hupac adjusted its strategy by temporarily consolidating departures while expanding other services, such as the Benelux-Italy corridor and the Rotterdam-Warsaw/Brwinów route. The decline was attributed to shifting consumer behavior, industrial production changes, increased market prices, and infrastructure impairments, including the partial closure of the Gotthard Base Tunnel.
Hupac praised solutions with SBB but expressed concerns over reduced rail subsidies in Germany, which may impact the combined transport sector negatively. The company emphasized the need to prevent a shift from rail to road transport and called for continued support for long-distance transalpine transport.
Customs & Regulations
There are concerns that new post-Brexit border rules might lead to bypassing required animal product checks at UK ports due to potential congestion.
Under the Border Target Operating Model (BTOM), EU animal products entering the UK are categorized by risk level, with medium- and high-risk items needing health certificates. With ports possibly unprepared for checks, a temporary automated clearance process called Todcof could be implemented for medium-risk products.
This move has sparked mixed reactions from organizations like the Freight Liaison Group and Dover Port Health Authority, highlighting the delicate balance between trade facilitation and safety at the UK border.
???Until Next Week
DocShipper Team
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