Market Update – 17th March 2023

This week strikes across the UK has been hitting the headlines with several trade unions involved in the demonstrations. According to reports this was the biggest walkout since the current wave of industry action began, seeing teachers, civil servants and border force officials take part. 

It was the latter that caused some disruption for logistics firms and port operators. Not least because it timed perfectly with demonstrations occurring across France. 

Now to add to the disruption, British passport officers have announced that they will also be striking, for five weeks. 

This will take place between 3rd April and 5th May and will undoubtedly hurt travellers, create enormous backlogs and disrupt summer holidays. Likewise, drivers taking goods across borders will need to be proactive or risk becoming ineligible for work. 

The UK Government has yet to comment on the announcement but on Thursday this week they agreed a final pay offer with healthcare workers, suggesting an offer could be negotiated. 

In other news:  

Transportation trends          

Land:         

• In 2022, road goods vehicles made 3.22 million trips from GB to Europe, a 6% increase compared to the previous year but 6% below the 2015 to 2019 average.
   
• Food trucks are at an ever-growing risk of theft, as criminals seek ‘low risk, high reward’ targets. And retailers and manufacturers are playing into their hands.
   
• On Thursday 16 March, the first freight train departed between the Chinese capital Beijing and that of Russia – Moscow. It marked the start of a new service of the China-Europe Railway Express, connecting the capitals of the befriended countries.
   
• The path to a positive new normal has apparently been hampered by a wave of port protests occurring across the globe and issues with labour relations. 

Air:  

• The market has been expecting a second-half recovery as air freight prices have settled below peak-Covid levels and the Baltic Air Freight Index dropped 1.5% last week. 

• More reports have emerged this week suggesting that there might be a slight improvement in the market led by the ramping up of production in China. In its latest weekly market report, data provider TAC Index pointed out that the overall Baltic Air Freight Index covering prices by forwarders rose 3.5% in the week to March 6. 

Sea:       

• The 2M Alliance has officially announced that the AE1/Shogun Asia-North Europe circle will be terminated after blanking it for several weeks. It is the first allied service on the tradelane to be formally eliminated, and more are likely to follow as ocean carriers attempt to lessen the effects of considerably decreased demand in the coming weeks. 

• Ocean carriers are being pushed to scale up their efforts to reduce CO2 pollution by a new coalition of significant shippers. The Aspen Institute and the carriers Amazon, Patagonia, and Tchibo have teamed up to form the Zero Emission Maritime Buyers Alliance (Zemba).
   
• In order to make drastically reduced full-year profit projections, carriers are writing off the first half of this year and counting on a demand lift from restocking in the second half.   

• Although the reliability of carriers’ schedules may be increasing, it is possible to argue that supply chain delays are more frequently caused by last-minute blanking of promoted sailings than by late-running ships. 

• Russia has consented to a 60-day extension of the Black Sea Grain Initiative, which is half the number of days originally agreed upon when it first expired in November, with just days remaining before the most recent time was scheduled to expire.  

Industry news 

• In order to create a green shipping route over the Pacific, the Japanese government and the governor of California have now signed a statement of intent.    

• At its meeting on March 9, the Oakland Board of Port Commissioners passed an environmental law. The port legislation stipulates that tenants who use cargo-handling machinery must develop a strategy for making the machinery zero-emissions capable. 

• Concerns over the Sri Lankan government actions to deregulate export/import freight pricing, terminate all-in rates, and reinstate fees have been voiced by shippers. 

• With an increasing fleet of bulk ships departing ports in Australia for the People’s Republic, Beijing has lifted its prohibition on Australian coal.    

• 200 Sparrows Offshore Services employees will protest soon, according to Unite the union, which could result in the closure of numerous sites on the UK Continental Shelf.  

Looking forward      

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