WEEKLY MARKET UPDATE 04/25/2024
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This newsletter's summary
Figure of the week
6 500 000 Km
Is the extra distance added by shippers who have redirected exchanges.
Quote of the week
“Without logistics, nothing works.”
? -General Friedrich von Mellethin
?Increased carbon emissions from cargo ships?
According to Xeneta data, the continuous Red Sea shipping issue resulted in 63% more carbon emissions?from containerships transiting between Asia and the Mediterranean?in Q1 2024 than in Q4 2023.
Ships consume more fuel during diversions around the Cape of Good Hope, which extends sailing distances by an average of 5,800 nautical miles. Additionally, higher speeds increase carbon emissions. Due to the issue, some shippers have redirected commerce?via Russia's rail system, which also involves a significant amount of carbon emissions, and turned to air freight.
Major carriers that have chosen not to use the Red Sea route have added 6.5 million km?to their total distance traveled, potentially increasing CO2 emissions by more than five times for each container.
Red Sea shipping challenges are boosting air cargo usage
Air carriers are anticipating a busy peak season due to the resurgence of air cargo demand, which is being driven by the quasi-blockade of Red Sea shipping and an increase in reservations?from Chinese e-commerce platforms.
Meanwhile, logistics providers are becoming concerned about finding enough capacity. Due to the unreliability of ocean shipping and the strong demand from Chinese e-commerce?behemoths like Shein and Alibaba, industry experts have been taken aback by the double-digit growth in air cargo demand that has been observed for four months running, accompanied by rising rates since late February.
According to Xeneta, the volume of air freight rose by 11%?in March compared to the same month last year, with flight activity and prices experiencing a notable surge worldwide. Some companies have switched to air travel in order to escape delays caused by the Red Sea shipping issue, with worries about possible regional wars.
领英推荐
Weekly logistics trivia
Indra Nooyi, former CEO of PepsiCo, is a prominent figure in the logistics sector, renowned for her innovative leadership and strategic vision.
Indra Nooyi's notable contributions to the logistics industry include:
Her impactful contributions to the logistics sector continue to inspire innovation and transformation in supply chain management worldwide.
Belarus sees an 8% increase in railroad costs
The Belarusian government has decided to raise rail freight taxes?by an average of 8%, citing a change in tariffs for rail transportation. This fee increase corresponds with an increase in demand for rail transit between China and Europe via Russia and Belarus, but it is not applicable to all freight trips.
Since the start of 2024, travel between China and Europe via Russia has increased by 44%, with the northern route growing more and more popular due to its affordability and security concerns in the Red Sea. Belarus stands to benefit from this increased demand because it is the main entry point into the EU for trains coming from China via Russia; it may try to take advantage of this by increasing rail freight prices to raise revenue.
Customs & Regulations
Beginning on October 31st, businesses will need to register for the Safety and Security (S&S GB) service for Great Britain or the Import Control System Northern Ireland (ICS NI) for Northern Ireland in order to submit declarations under new customs regulations?for goods entering both countries.
Before goods reach the border, declarations must be precise and comprehensive, with the opportunity to be amended until the products reach the UK border if necessary. Electrical energy, goods entering through pipelines, letters, postcards, printed materials, goods in passengers' carry-on luggage, and goods verbally reported to customs are among the goods that are not need to be declared.
?Depending on the type of shipping or transport service utilized, there are different deadlines?for submitting declarations.
???Until Next Week
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Sources