Market Update – 23rd October 2023

One person has died and four are missing after a British cargo ship sank off the coast of Germany following a collision in the North Sea.

Two vessels collided at about 5am on Tuesday about 13 miles south-west of the island of Helgoland; the British Verity and the Bahamian bulk carrier vessel, Polesie.

Only 2 people were rescued onboard the British ship, whilst the body of another was found as the search continued for the missing crew. But now, the search has been suspended by the German rescuers, due to harsh weather conditions and an extreme lack of visibility.

The water temperature at the time of the collision was about 12 degrees Celsius. People can only survive for about 20 hours in this temperature. With the prediction that the other crew members have been trapped in the Verity at the bottom of the ocean, hope is dissipating.

In other news…

Land

• In the USA, a rising number of truckers have gone out of business as demand shrinks, costs surge and worsening overcapacity pushes rates down. Although the bottoming-out of the market has been predicted, in recent weeks the downward trend has continued.
• An investment bank has agreed to inject close to €1bn into the upgrade of the Czech Republic’s railways, as part of a major greening initiative. This increased quality of rail is to promote a modal shift from road to rail freight.

Air

• A new air logistics hub has been inaugurated in the heart of Cargo City at the Paris Charles de Gaulle airport. It has the capacity to handle 300 air freight pallets a week and its processing surface is 20% times bigger than the previous space, with direct access to runways.
• Despite a modest decline in tonnage last month, Amsterdam Schiphol (AMS) is outperforming most of its peers in what is a subdued air cargo market.

Sea

• The box shipping fleet has reached its highest average age since records began, with a great number, overwhelmingly in the smaller size range, set for demolition.
• Airbus is to replace its shipping fleet in a bid to reach 2030 decarbonisation goals and has commissioned three new vessels that will be supported by wind propulsion. The new vessels are expected to reduce the manufacturer’s average annual transatlantic CO2 emissions by more than half.

Industry news

The forecast for the global container shipping trades continues to darken, which is threatening an industry-wide $15bn loss for next year. A 60% reduction in global freight rates has been predicted for this year, with spot and contract combined, followed by a drop of 33% in 2024.

Since COP26, the international shipping sector has felt pressures to reduce its greenhouse gas emissions more rapidly. The recent adoption of the 2023 International Maritime Organisation Strategy on Reduction of GHG Emissions confirms ambitious plans to achieve net zero for the sector by 2050.

The average cost of a cyberattack in the maritime sector has soared to $550,000, a drastic increase from $182,000 in 2022. Moreover, ransom demands have skyrocketed by more than 350%, with an average payment of $3.2 million.

The Chinese government have stated that exporters will not be required to obtain permits to ship high-purity, high-hardness and high-intensity synthetic graphite material, along with its derivatives. This is to protect national security and keep their supply chain running smoothly.

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.