The multimodal network news digest - issue #24

The current situation on the market is radically different from what it used to be like at the same time last year when shippers were desperate for contracts and ready to pay any price. Now with decreased demand, overcapacity, low spot rates, and blank sailing as the main practice to stabilize the situation, the tables have turned. However, experts say the bottom of the spot rates might have been achieved on the Asia-North Europe and Asia to US west coast routes. There are some signs that this is where the rates may pick up. Drewry’s WCI index actually recorded a slight uptick, to $1,706 per 40ft and Xeneta XSI reading ticking up 1.3%, to $1,529 per 40ft. With all the uncertainty, there are only two big questions for shippers: how much of their diminished volumes they will commit to renegotiated contracts, and how much will be reserved by the spot market? They already expect poor performance from carriers with worsening arrival predictability. 

FMC called for 20 shippers to prove how they comply with the prohibitions of OSRA 2022. It states that it is illegal for ocean carriers to discriminate or retaliate against a shipper for filing a complaint or challenging a charge. With this being stated, FMC will thoroughly investigate any allegation of illegal behavior and proceed accordingly in case of a violation. 

Routes & services 

• CNC, owned by CMA CGM, will start a new service on the 3rd of January: Singapore – Port Klang (Malaysia) – Yangon (Myanmar) – Port Klang – Singapore – Sihanoukville (Cambodia) – Singapore.
• Since China eased COVID restrictions, the hopes to return to normality on the New Selk Road have been up. Experts are optimistic about the volume of westbound trains, and some companies have already planned to increase the number of trains to Europe. 
• APM Terminals and DP World called to focus on central and eastern Europe, and  Central Asia from the perspective of the Middle Corridor. Central Asia in particular should be seen as a market on its own, not just a mere transit region. However, transit times and the cost of the route are not competitive, and this is something that requires close attention. 
• Uzbekistan has sent its first train loaded with copper to Europe via the Middle Corridor. The country also announced its plans to invest more in trade with the EU. 
• CNC has launched a direct service linking Myanmar and Cambodia to Singapore and Malaysia called Yangon Cambodia Express (YCX). From January 3rd, the rotation will be Singapore – Port Klang – Yangon – Yangon – Port Klang – Singapore – Sihanoukville – Singapore.

Other

• FedEx wants to cut costs significantly and to do that, the company will outsource a lot, park aircraft, close offices, eliminate Sunday delivery and release drivers at its Freight division. The company plans to remove $2.7 billion in costs.  
• Trucking index keeps sliding with no sign of improvement. ATA For-Hire Truck Tonnage Index fell 2.5%, month on month, in November, following a 1.2% slip in October. Since shippers no longer need capacity, truckers, reportedly, are willing to accept almost any load that comes their way. However, not everything is so frustrating. The global downturn is not expected to be severe. 
• The German government will reduce electricity prices for railways to 13 cents per kWh. 
• Following a bomb alert on Dec 21, the MSC Lorena had to change its course. Now the ship is at the Scheldt.
• DP World and Hassana Investment Company will invest $2.4 billion in three of DP World’s UAE assets to capture the potential of the wider market in the long run. 
• Bolloré SE has sold Bolloré Africa Logistics to MSC Group for the price based on an enterprise value of $6.4 billion. Nevertheless, the Bolloré Group will continue to have a significant presence in Africa, particularly through Canal+, and expand its operations to other industries. As for Maersk, the company wants to keep strengthening the continent’s connections and boost commerce inside Africa. 

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.