The multimodal network news digest - issue #33

The container shipping market is still experiencing falling spot rates, indicating that it has yet to reach the bottom of the cycle, although, in comparison to other tradelanes, the trans-Atlantic market continues to outperform the trans-Pacific. The dynamic is due to a combination of factors including overcapacity, port congestion, and weak demand. Another signal that the market is bottoming down is how fast vessels are changing hands and older tonnage is being scrapped. 

A new round of alliance restructuring among container shipping companies may occur following the separation of the 2M Alliance. One of the predictions implies that the Ocean Alliance of CMA CGM, Cosco, and Evergreen could be next, but CMA CGM refuted this statement. 

The tough market situation makes ocean carriers expand their services, which puts feeder operators under increased pressure and potential threats to their business. As carriers begin offering direct services on smaller trade lanes traditionally served by feeders, this shift could lead to a consolidation of the feeder market and increased competition among carriers.

Ever since the pandemic, air freight has been struggling to recover. Maersk Air Cargo has been forced to idle new freighters due to decreased demand for air cargo services and focus on shipping activities as the company seeks to minimize losses during the ongoing crisis. The situation highlights the challenges faced by the air cargo industry in maintaining profitability and sustainability amid fluctuating demand and changing market conditions. Another example is a Japanese shipping company NYK that plans to sell its air freight division in a bid to focus on its core ocean shipping business.

Hot topic

• Another train carrying hazardous materials has derailed on Norfolk Southern's tracks, leading to renewed calls for improved rail safety regulations in the US. The incident has highlighted concerns about the risks associated with transporting hazardous goods by rail, particularly given the recent surge in traffic volumes.
• MSC panamax boxship lost more than 40 containers overboard in bad weather on the way from Boston in the US to the Dominican Republic.
• A near-collision of OOCL Utah‘s vessel with a Panama Canal lock gate highlights concerns about the safety of shipping in the narrow waterway, with experts warning that an accident is waiting to happen due to the increasing size of vessels and inadequate infrastructure.
• Pakistan's logistics sector is facing severe challenges as a result of the country's forex crisis, with a backlog of cargo piling up at ports and trucks unable to move due to a shortage of fuel and spare parts.
• MSC ISTANBUL cargo vessel has been refloated after being stranded in Egypt’s Suez Canal for two hours.

Routes and services

• An increasing number of non-vessel-owning companies are buying or chartering their own ships to take advantage of lucrative Russia’s trade. The move is motivated by rising freight rates and limited vessel availability.
• Yilport has improved its train shuttle service in Sweden to offer better connectivity to inland locations. The upgrade includes a new weekly train service between Yilport's terminal in Gavle and Hallsberg, and the deployment of eco-friendly locomotives.
• China is increasingly using Kazakhstan as a transit country to Europe as it offers faster and more reliable connections compared to the Black Sea route. The advantages include reduced transit time, fewer administrative procedures, and lower logistics costs.
• The Erenhot port in China has seen 500 freight trains transporting goods to Europe since the beginning of 2023. The port's strategic location and efficient customs clearance procedures have contributed to its increasing role in facilitating trade between China and Europe via the Belt and Road Initiative.

Other 

• The Port of Riga has opened two new warehouses, increasing its storage capacity by 5,000 square meters, in response to the growing demand for logistics services in the Baltic region.
• Amazon, Patagonia, and Tchibo have teamed up with the Aspen Institute to launch the Zero Emission Shipping Alliance to help decarbonize the shipping industry. The alliance aims to promote the development and adoption of zero-emission shipping technologies by 2030, and support industry-wide efforts to achieve net-zero emissions by 2040.
• There is a slow but steady shift in sourcing away from China by western companies, as they try to diversify their supply chains due to the pandemic, geopolitical tensions, and rising costs. However, China's infrastructure, skilled workforce, and favorable policies continue to make it an attractive option for many companies.
• Deutsche Bahn has hired three investment banks, namely Goldman Sachs, JPMorgan Chase, and Rothschild & Co., to find potential buyers for its logistics unit DB Schenker, as part of its restructuring efforts.

These are only several changes that occurred in more than 250 bn freight rates across 25 million routes with more than 1 million market players. Want to share some news about your company, services, and routes? Just post them on MAXMODAL, a multimodal network that digitally connects routes and rates worldwide to automate sales and operations across container transportation & logistics industry. Join to innovate.