The multimodal network news digest - issue #46

Expanding rail 

There is an ongoing decline in freight rates and the possibility of a "liner bear market" in the shipping industry. Several factors are exacerbating the situation, including slow demand recovery, rising fuel costs, increased operational expenses, and oversupply of vessels. The latter is attributed to the influx of new container ships entering the market. In the current context, the container lines' profitability is expected to suffer in the coming months due to the inability to pass on increased costs to customers. Yet, some carriers are resorting to aggressive pricing strategies, including below-cost rates, to attract customers and gain a competitive edge. The industry's recovery is highly dependent on resolving supply chain bottlenecks and improving global trade conditions.

The shortsea market is experiencing turbulence. Weak demand, influenced by economic uncertainties and reduced trade activity, is negatively impacting its profitability. Shortsea shipping companies are exploring strategies like network consolidation, digitalization, and eco-friendly initiatives to improve efficiency and reduce costs.

Automobile 

• The International Road Transport Union has introduced a new plan to address the truck driver shortage. One approach to addressing the issue and ensuring the smooth operation of essential road transport services involves implementing uncomplicated strategies to manage the global supply and demand of labor. This includes facilitating legal immigration processes and taking measures to prevent the mistreatment of non-resident drivers. However, the plan misses the underlying issues causing the driver shortage such as low wages, long working hours, and challenging working conditions.

Ports

• The deal between COSCO Shipping Ports and Hamburg's Container Terminal Tollerort (CTT) has been finalized. COSCO has acquired a minority shareholding in CTT (24.99%), strengthening its presence in the port of Hamburg.

Routes, rates & services 

• Southeast Asia and China are working to enhance rail connections for the transportation of fruits. The first train left from Bac Giang in Vietnam and arrived in the border city of Pingxiang in China. Future connections will enable faster and more reliable transportation, making Southeast Asian fruit exports more competitive in the Chinese market.
• Kazakhstan's national railway company, Kazakhstan Temir Zholy (KTZ), has imposed a ban on the import of jet fuel by rail from Russia. The ban comes as a result of concerns over the quality and safety of the imported jet fuel. The ban will impact the supply of jet fuel to airports in Kazakhstan, potentially leading to disruptions in air travel and affecting airlines operating in the country.
• A new distribution center for the Yixinou China-Europe freight train has opened in Duisburg, Germany. The Yixinou train is part of the China-Europe rail network, which aims to facilitate trade and connectivity between China and Europe.
• Pacific International Lines has introduced a new service called the Korea-China Straits (KCS) service. The rotation will be Pusan – Kwangyang – Shanghai – Shekou – Singapore – Port Kelang (Westport) – Penang – Singapore – Ho Chi Minh (Cat Lai) – Nansha – Pusan. 
• Rhenus Logistics and Kazakhstan Temir Zholy have formed a partnership to enhance the Middle Corridor. The collaboration seeks to attract more businesses and freight volumes enhancing the routes’ competitiveness. The Middle Corridor offers advantages such as shorter transit times, reduced costs, and lower carbon emissions compared to other routes.
• Regional Container Lines is expanding its focus beyond Asia in order to generate additional revenue and overcome increasing competition. The company aims to capitalize on emerging markets and trade opportunities in regions such as Africa and South America. RCL is also targeting more reefer business and fleet renewal. 
• Barge operators along the Rhine River have implemented surcharges due to a rapid decline in water levels. The low water levels on the Rhine River have caused difficulties for barge transportation, impacting cargo movements. The surcharges aim to compensate for the lower cargo capacity and maintain profitability for barge operators. 
• Orient Overseas Container Line has expanded its services on the China-Indonesia route. CIS2 directly connects multiple ports in China with Indonesia and the Philippines to cater to the increasing demand in the market. 
• Samskip is expanding its operations in Central and Eastern Europe. Its services will connect key locations in the region, including countries such as Poland, the Czech Republic, Slovakia, Hungary, and Romania.

Other 

• Despite a labor agreement, certain ships bound for the West Coast are still facing delays. The delays are attributed to various factors, including congestion at ports and ongoing supply chain disruptions.
• The dissolution of the 2M Alliance will bring significant changes to container trades. On the Far East-Europe trade, it seems unlikely that Maersk will be able to maintain equivalent port coverage as a standalone operator. In terms of transpacific trade, the situation is slightly different, primarily due to the Jones Act and the geographical layout of North American ports. These factors make transshipment a less feasible option for ensuring extensive port coverage. In reality, Maersk and MSC have already begun to separate their networks in this trade. 

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.