EU | UK news digest. 9 July
In the race for solutions in the rapidly changing market, it is particularly difficult to make decisions that will not make resonance and controversy. At least, the UK knows all about it. The pressure is increasing across all modes – even the promising one, rail.
To address the long-lasting drivers’ shortages, the UK government has decided to temporarily extend working hours for drivers and smaller hauliers. The move has faced a mixed reaction with some claiming it gives flexibility and others arguing that the initiative puts even more pressure on the already exhausted drivers. The authorities are also being involved in the discussion with Rail Delivery Group on the support for shifting freight from road to rail for a greener economic recovery. The post-crisis era will bring new congestion to roads, so the supporters of the shift believe that transition to rail will be the winning strategy.
However, the European modal shift is facing some challenges. In the light of recent sanctions imposed on Belarus by the EU, the country has announced it will not wait for long to pay back. The looming threat of Belarus potentially banning the transit of EU products heading to China will hit such companies as Lithuanian Railways the most. Additionally, the missing part on the railway corridor from Russia to India risks remaining unchanged for longer as the Iranian government is hoping for other infrastructure through Armenia and Azerbaijan to take the reign in development.
As for ocean freight, the reduced services will lead to the decreased revenues with experts predicting that the container volumes over the coming month would be around 20% lower. Demand is declining in large consumption regions such as Europe alongside a considerable scale of void sailings; however, overall, the maritime industry is doing whatever it takes to stay afloat.
Moreover, it does not neglect sustainable development. Having joined the Hydrogen Europe, the Baltic Ports Organization has become a part of the group of almost 300 companies and national associations working towards decarbonizing the maritime sector. Hydrogen and hydrogen-based fuels have been recognized as one of the main means for achieving this objective.
DP World’s Jebel Ali terminal in the United Arab Emirates was struck by an explosion and subsequent fire on July 7. The source of the blast was a small containership preparing to dock at the Jebel Ali container terminal. The satiation is still being assessed, but operations are running at 100%.
Freight markets continue to be severely pressured across the ocean, air, and rail modes. For the ocean, the Q4 of 2021 has been announced the earliest potential period for slight improvements. In turn, air freight will soon have to deal with increased passenger flow that will affect capacity availability and rates. Despite its rigorous development, the situation on the rail frontier is still worrying due to the congestion along the Silk Road railway affecting schedule reliability and wagon shortages at crucial border points on the route between Belarus-Poland-Germany.
A long-standing collaboration between Global freight forwarder body FIATA and the International Union of Railways has been facilitated by a Memorandum of Understanding regarding safety and security-related topics, digitalization, sustainability, and Eurasian corridor developments. It commemorates the joint effort of freight forwarders, rail transport domain around the world, including manufacturers, etc.
DP World enhances its capabilities in Africa by making an offer to the African-focused logistics solutions provider, Imperial Logistics, to acquire all outstanding shares of the company for $ 890 million. In case of success, it will give DP World a strong, attractive footprint.
Expansions in the air market are also on the roll – Lufthansa Cargo is significantly growing its network with new opportunities. Amid to capture more of the e-commerce market, it is in the process of converting two A321s to freighters for intra-European operations. In addition, the company’s interest to drive its market capacity is guided by the decision to widen its business with a new carrier, Eurowings Discover.
