Market Update – 21st July 2023

This week the UK signed a deal to join a trade pact with several countries in Asia and the Pacific. 

The CPTPP, or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, is a trade agreement between 11 countries. 

Specifically, the countries are: 

• Australia
• Brunei
• Canada
• Chile
• Japan
• Malaysia
• Mexico
• New Zealand
• Peru
• Singapore
• Vietnam

These founding members generate 13% of the world’s income between them. The UK is the first non-founding country to join and will be its second biggest economy after Japan, and by joining, it takes the value of the new grouping to £11 trillion. 

However, initial reports indicate the boost to Britain’s GDP could be minimal with some predicting only a 0.08% increase over 10 years. 

The reason is because the UK already has relationships with most of these nations. The only two it doesn’t already deal with are Brunei and Malaysia, who account for less then 0.5% of the total of UK trade. 

There are nations within the agreement that are undergoing significant growth. Vietnam has slowly emerged as an alternative manufacturing hub to China. Similarly, Mexico is being eyed up by US businesses looking to near-shore their production closer to home. 

Greater access to each their markets would be welcome, as would a pledge to eliminate or reduce 95% of import charges or tariffs. 

In other news: 

Social post: 

Land:    

• UK road freight services are defying inflation, with stable prices year-on-year. The latest data from the TEG Road Transport Price Index shows that year-on-year haulage and courier prices remain stable, despite inflation pushing prices up elsewhere. 
• Between January to June 2023, Russian demand for road freight transport increased by 61%. Between May and June, this figure doubled compared to the same period last year.  

Air:   

• Automation has begun to transform air freight handling, due to a shortage of skilled workers.
   
• The current price war is keeping air cargo rates below its natural level. 

• Belgium’s Transport Minister Georges Guilkinet submitted a proposal for a draft decree envisioning a ban on night flights between 11pm and 6am to limit environmental and noise pollution at airports. 

• Liège could be a big winner in the proposal to ban night flights at Brussels airport. 

Sea:    

• To develop more lucrative trade routes, shipping companies are looking for ship-sharing partners outside of the major East-West alliances. 

• High port charges and unilateral tariff policies have been major concerns for container routes serving India’s trade, but industry resistance appears to have alleviated some pressure.
   
• A Chinese feeder boxship collided with a sand freighter this week and partially sank. All personnel onboard have been safely evacuated.
   
• The South African Ports Authority has forged a 25-year “groundbreaking” partnership with International Container Terminal Services (ICTSI), bringing the sector closer to privatisation.   

Industry news   

• Following last year’s free trade agreement, India and the United Arab Emirates are showing signs of accelerating bilateral supplies, further cementing their economic ties. 

• Russia formally withdrew from a UN-backed deal allowing Ukraine to export grain across the Black Sea. 

• More than 100 workers are preparing for industrial action at Amazon’s Rugeley distribution centre in the West Midlands, UK, and 1,000 colleagues in Coventry are also on strike.   

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.