Market Update – 6th November 2023
There have been ongoing acts of railway sabotage by anti-war activists in Russia this week, which has presented challenges for authorities and having inevitable repercussions on military logistics.
The sabotage includes damages to railway tracks and arson.
The logistics of Russia’s military, including the provision of supplies for the conflict in Ukraine, continue to depend on the nation’s extensive 33,000km of railway lines.
The essential military operations for the Russian Armed Forces heavily rely on rail transportation, serving as the primary method for troop and heavy weapon movement. Russia has a dedicated branch referred to as the railway troops, specifically tasked with supporting the logistics network.
Given the prohibition of virtually all forms of open dissent in Russia, a minority of young people find sabotage to be an effective means of protest against the special military operations. Now, nearly 150 Russians are facing criminal charges for their demonstrations.
In other news…
- Haulage contract rates in Europe saw their first increase since Q4 2022 during the three months leading up to September. However, the situation on the spot market is still unfavourable.
- 13 US attorneys have expressed their support for the mandatory requirement for train operators to promptly provide their cargo information to the authorities in cases of derailment. A letter has been signed urging first responders and agencies to be issues with electronic cargo manifests.
- Small and medium-sized agents are gaining ground in the air freight market at the expense of large forwarders. The bigger forwarders have seen their market share of total chargeable weight drop by 1.1%. In contrast smaller forwarders have increased their share by 0.9%. Some of the major forwarders are scaling down their operations due to declining profits.
- Turkish Airlines has provided more details about its plans to grow its freighter fleet in the next five to ten years. The airline aims to increase its existing overall fleet, currently at around 429 aircraft, to over 800 within a decade.
- The terminal operators at Lazaro Cardenas, Mexico’s 2nd-largest container port on the Pacific coast, are ready to enhance their capacity. This $220million project aims to increase terminal capacity from 1.3million teu to 2million teu.
- Tanker market rates have surged due to escalating geopolitical tensions in the Mediterranean region. The demand for oil, natural gas and coal is expected to peak within this decade in accordance with current governmental policies.
A logistics company has constructed a port facility in South Africa that will facilitate the unloading of larger quantities of a crucial battery metal from one of the world’s longest freight trains for export. This development comes as the country grapples with a shortage of rail capacity.
In Glasgow, a drone project has effectively carried out several liver flights trials for medical logistics. This initiative aims to establish the UK’s inaugural national drone-based distribution network for medical supplies.
TikTok, the popular social media platform, is making a substantial investment in logistics as it aims to convert its extensive streaming audience into a significant presence in the e-commerce sector. This involves a new network of warehouses and fulfilment operations, where tasks like inventory management and delivery are taken on.
Egypt is set the shift the control and operations of vital logistics and transportation organisations to the private sector. They are starting with the aviation sector.
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.