WEEKLY MARKET UPDATE 02/01/ 2024

This newsletter's summary

Figure of the week

25%

According to reports from the Panama Canal Drewry Shipping consultants, the overall number of ships transiting the Panama Canal fell by 25% as vessel types are avoiding the waterway due to ongoing tensions.

Quote of the week

“Freedom is a matter of logistics”

 -Ben H. Winters

 Container Schedule Reliability Drops Amid Red Sea Disruptions

The Shanghai Containerized Freight Index (SCFI) has surged by 126% since late November 2023, reaching its highest level since September 2022. Linerlytica predicts that despite an expected correction, freight rates will likely retain most gains after the Chinese New Year.

However, analysts like Simon Heaney note a slower rate of increase and diminishing demand for vessel capacity. The Red Sea crisis has primarily affected container shipping, causing diversions around the Cape of Good Hope.

While delays in European ports are expected, it is seen as a temporary disruption rather than a widespread supply chain crisis. HSBC anticipates potential delays in European ports due to bunching as diverted vessels arrive from Asia.

January Air Cargo Volumes Surge

Air cargo volumes surged by 10% year on year in January due to concerns over Red Sea-Suez Canal delays and an early Lunar New Year, prompting some shippers to switch from ocean to air transport.

However, increased capacity has prevented rate hikes, with global spot rates declining by 12% month-on-month to $2.27 per kg.

Despite a rebound in rates from Northeast Asia to Europe, general cargo rates from China to the US continued to decrease. Xeneta's chief airfreight officer predicts that the Red Sea disruption won't lead to a long-term shift to airfreight, as stability is expected to return once supply chains adjust.

Concerns over post-Christmas e-commerce performance and economic slowdowns could further affect air cargo demand in 2024, but January's strong performance indicates a positive start for the year.

Weekly logistics trivia

Julius Caesar was a military general and statesman in ancient Rome. He demonstrated exceptional logistical skills in managing the movement of troops, supplies, and resources across vast territories during his conquests and campaigns.

Julius Caesar had several logistics strategies and characteristics, such as:

• Strategic Planning: Caesar devised long-term military strategies, including the organization of supply lines and logistical networks to support his armies during campaigns.
• Adaptability: He showed flexibility in adjusting his logistical plans based on changing circumstances, such as shifting battlefronts or unexpected disruptions to supply routes.
• Organization: He implemented systematic logistical systems, including the establishment of supply depots, logistical bases, and efficient transportation networks to streamline the movement of troops and supplies.
• Leadership: Caesar's strong leadership qualities enabled him to inspire confidence and discipline among his troops, fostering cooperation and coordination.

Caeser's ability to organize and coordinate logistical operations played a crucial role in his military successes and helped establish him as one of history's greatest military commanders.

Intercontinental Trade: The Rise Of Intermodal Transport

Intercontinental trade is facing numerous challenges, including long distances, border crossings, and time constraints. However, intermodal transport offers a solution by combining different modes of transportation effectively.

The New Silk Road project, spearheaded by China, has revolutionized intercontinental trade, improving efficiency, reducing environmental impact, and optimizing costs. The Euro China Train, a flagship project of ADAMPOL S.A., provides a stable connection between Europe and Asia, offering flexible, door-to-door service.

The Logistics Center in Małaszewicze serves as a crucial hub, facilitating smooth cargo handling and providing comprehensive customs support.

Customs & Regulations

One of the biggest Customs changes in the EU in 2024 is the Proof of Union Status system (PoUS) which will face huge updates! This will occur during many phases, including :

Phase 1 of the EU's new system for union status certificates T2L and T2LF is active until March 1, 2024, after which applications must go through the Proof of Union Status system (PoUS).

This system issues and tracks union status certificates, each assigned a Movement Reference Number (MRN) for customs reporting during importing.

Phase 2, expected by the third quarter of 2025, will introduce the electronic Customs Goods Manifesto for requesting and verifying certificates across multiple shipments and goods.

🚀 Until Next Week

DocShipper Team

Sources

Container Schedule Reliability Drops Amid Red Sea Disruptions

January Air Cargo Volumes Surge

Intercontinental Trade: The Rise of Intermodal Transport

EU Implements New System for Union Status Certificates