Market Update – 11th August 2023

Industrial action has been the headline of the US logistics space this week. Employees across major organisations threatened to down tools, with an estimated 25% of the world’s largest economy parcel deliveries put at risk. 

Elsewhere, in Canada, over 7,400 port workers have been striking at 30 ports on and off since 1st July over pay. 

Not only has this had a direct impact on the transportation of goods but shipment lead times have increased, and service levels have been affected across the board.  

While industrial action is a key foundation of worker rights, it is important for businesses to be aware of the impact that it could have on their supply chain. Even a short period of industrial action could have serious consequences on global freight, with the UK being no exception. 

Tensions have eased somewhat since the port strikes that plagued the UK. However, with a rising cost of living, it’s important businesses have contingency plans. 

In other news:   

Land 

• Rail engineers are about to enter a major phase to connect a new rail freight transshipment point with the West Coast Main Line at Northampton.  

• US road freight activity hits new low since Covid-19 in Q2, with volumes down 9% from Q2 2022 and spending down 10.9%  

Air  

• After a long period of plummeting rates and now a summer lull, hopes are rising for some modest peak season for air freight. 

• North Africa has bucked the trend in the market in the first half of this year, recording sustained tonnage growth, with commentators calling it the potential ‘China+1’ destination of Europe.  

• The transition from passenger to cargo (P2F) aircraft continues at a steady pace, but experts are watching for a potential oversupply scenario. 

Sea      

• Three sea robbery incidents occurred in the Singapore Strait in the space of just six hours. As a result, a regional maritime security advisory is warning ships in the area to be extra vigilant in the coming 10 days. 

• Delays in the Panama Canal averaged around 15 to 19 days per vessel during the first week of August, with low water levels in Lake Gatun limiting the number of fully loaded vessels that could make the transit. 

• Despite the weakening market conditions, owners of non-operating container ships (NOOs) have amassed huge income from long-term charters for ocean carriers, supported by binding charter party.  

• Massive deliveries of new container ships continue, with the extra capacity driving down rates and prompting carriers to improvise new strategies in the face of a dismal financial outlook.  

Industry news  

• After falling 3.7% in real terms (holding prices and exchange rates constant) last year, the global forwarding market is expected to contract a further 3.9% by the end of the year, reducing its market value to just over €334.3bn ($424.6bn). 

• Shippers are now actively rearranging Asian shipments, moving back from the US east coast to the west coast, as the full ramifications of the Panama Canal’s prolonged reduced operational capacity hits home.

• Operation Jardena, the Australian Border Force (ABF) anti-drugs programme, is now monitoring 1,000 individuals and 100 companies at docks and freight terminals, suspecting many may be involved in smuggling. 

• After logging modest growth in the fiscal year that ended in June, exports out of Bangladesh have got off to an impressive start in the new financial year, driven by its mainstay RMG (ready-made garment) trade.

Looking forward  

That’s it for this week’s report, if you have any questions about the stories covered today or need support with your current supply chain, please get in touch.