The multimodal network news digest - issue #22

A long-awaited ease of Chinese COVID restrictions has come faster than expected. However, the consequences they have caused are also more severe than experts predicted. Total goods export value fell 8.7% year on year in November, while experts anticipated a 2% drop. It is inevitable that exports and imports will deteriorate in the coming months, before improving in 2023. 

Rates on the Asia-North Europe tradelane remain unsolicited. The Drewry’s WCI North Europe component fell 14% week, to $1,686 per 40ft, while Xeneta’s XSI lost 15%, to $2,126, and the Freightos Baltic Exchange shrank 11%, to $3,530. At the same time, there are some offers that are only down to $1,300 per 40f from China to the UK, but experts warn that the validity of these offers is questionable. Nevertheless, it clearly shows that forwarders are looking for new business based on anticipated rate reductions by carriers. 

Experts report that currently, the market is experiencing a full-blown collapse. Foreseeing the overload of ships, some companies have started putting their vessels up for demolition sale. In order to soak up capacity, some vessels take longer routes. For example, they already prefer going south of Africa to Asia, rather than going through the Suez Canal. As a result, this drop in volumes and in earnings is forcing new commerce out of the market. 

Is there a way for the situation to improve? Yes, and the key may be inventory replenishing in 2023. If retailers strive to restock, there will be a rebound in cargo volumes. Following an inventory correction, there is always a succeeding surge in demand as importers aim to return to normal operations. However, what undermines this premise is the possibility of recession and geopolitics affecting the situation further. If it happens, the surge in volumes will occur only in 2024. 

Routes and services 

• Uzbek Railways successfully launched its first freight train running on the 4,500-kilometre-long line. It goes from Turkey to Uzbekistan via Iran and Turkmenistan. 
• A new intermodal train now runs between DP World’s container terminals at London Gateway and Southampton making it an easy, quick way to switch volumes between the two locations. It is DP World’s first direct connection in the UK Ports. 
• From January 2023, a new train service by TX Logistik between Stockholm Norvik Port and the Eskilstuna Intermodal Terminal will start operating. 
• In order to ease the challenges caused by crippled reliability across Europe ports, Swissterminal is developing its service by extending it to Rotterdam and Antwerp. From January 2023, there will be weekly round trips between Frenkendorf (Switzerland) to Rotterdam and Niederglatt (Switzerland) to Rotterdam. 
• King Abdulaziz Port in Dammam has been added to Maersk’s Shaheen Express shipping service to facilitate trade between the Arabian Gulf and the Indian Subcontinent. 
• The new Poti Turkiye Feeder has been added to APM Terminals Poti by ZIM expanding the company’s service between Turkey and Georgia.

Other

• Covid restrictions on cross-border trucking between Hong Kong and mainland China were lifted, so forwarders can expect shorter transit times and lower costs by around 20-30%.
• Soren Skou will retire as CEO of Maersk. His successor will be Vincent Clerc.
• The strike disturbing South Korea in the past 16 days has come to an end as parties reached a consensus following the approval of the bill that provides an extension to the minimum-pay system for another three years. It is reported that more than $2.5 billion of goods had been held up during the strike.

These are only several changes that occurred in more than 250 bn freight rates across 25 million routes with more than 1 million market players. Want to share some news about your company, services, and routes? Just post them on MAXMODAL, a multimodal network that digitally connects routes and rates worldwide to automate sales and operations across container transportation & logistics industry. Join to innovate.