Market Update – 16th October 2023

This week has marked significant discussions about the improvement of sustainability in the maritime sector.

The Global Maritime Forum has identified 5 key action areas to improve the operational efficiency of vessels. These strategic plans are essential in reducing shipping emissions in the future, in the hopes of transitioning to a more carbon-neutral industry.

The 5 actions include:

• Data collection and transparency
• Contractual changes
• Pilot projects
• Ports, terminals, and value chains
• Culture and leadership

It is said these operational efficiencies would decrease annual fuel consumption by 20% and reduce annual emissions by more than 200 million tonnes of carbon dioxide.

Many companies have already come together to incentivise this transition and bring it to the forefront of the shipping agenda.

In other news…

Road

• Road freight rates in the UK have seen their biggest increase in almost a year. This is a marked contrast to the situation in mainland Europe, where there are worries that rates have yet to find their floor.
• UK rates climbed 3.3% September. This has been propelled by the reintroduction of the HGV levy, clean air charges, rising fuel prices and higher business charges.
• The global truck driver shortage has become a severe problem that could drive the industry into failure. There are over 2.8 million truck driver vacancies around the world, with more than 50% of companies reporting they face driver shortages.

Air

• Air cargo markets continue to move towards normalisation post-Covid and, while there are still concerns for 2024, it should be an improving picture as next year unfolds.
• Turning to the spot market, it is estimated that, since the end of last year/Q1 23, rates have come down from being two to three times higher than post-Covid levels, to 35-40% higher.
• South Africa’s airfreight market has seen an impressive bounce. Last week, international airfreight to and from the country rose 16%. Imports were up 12% week on week and exports jumped a mighty 23%. This is despite tonnages falling 5% globally.

Sea

• An engineering and tech company is in collaboration with a Dutch shipping company and an Indian shipbuilding and maintenance facility to bring some of the first ocean container ships that will use hydrogen fuel cell power distribution system. The companies are starting with the construction of 2 vessels which will be able to travel around 800 miles.
• Record low water levels on the Amazon River are disrupting cargo flows to and from Brazil’s seventh-largest port and the nearby free trade zone. As many as 90% of the regular vessels on the river are now operating with some kind of restriction in Amazonas, and the state has called for cargo capacity to be halved.

Industry news

Following a surge in the flow of illegal drugs through European ports, the EC wants to step up coordination among all stakeholders involved. Unprecedented increase of illicit drug available in Europe and drug seizures in the EU are hitting record levels.

Maritime organisations must protect their digital assets as cyber criminals become increasingly capable and ransom payments increase. There has been a shocking 200% rise in the cost of cyber-attacks, costing organisations an average of $550,000 over the last three years.

Ukraine’s three main seaports are all accepting ships. The number of ships traveling along Ukraine’s Black Sea corridor continues to grow with sources calculating that more than 50 transits have now taken place along the route.

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.