The multimodal network news digest - issue #29
The "new hierarchy of needs" for market players.
As contracts negotiated in 2022 are close to expiring, everyone is perplexed about at what rates the new ones will be arranged. It is expected that contract rates will be as low as spot rates. The composite global spot index now stands at $1,997.22 per FEU. Even if in the second half of the year the volumes could potentially recover, the rates will be still under pressure from the high capacity when the new vessels come into the game, so the situation will not improve in the coming months. For now, carriers are hoping for the lasting effect of last year’s contracts that secured the long-haul volumes. However, they will soon disappear and that is when the new order will unfold.
On estimate, global box volumes can slide by 2.5%. With the continuous fall of spot rates, backhaul trades have also decreased. Competition for backhaul cargo may risk turning into the next Hunger games. Carriers are trying to benefit from the empty containers racking-up huge storage costs at depots around the world. Now they no longer want to reposition their equipment to China where it used to be the most profitable direction. Delays made Asian ports less favorable.
Not only Asia is hitting the rocks. The US Intermodal traffic has had the worst January in the past 10 years. Domestic trailers slumped 29.7%, while the domestic container count sank 4.2%. No change is expected in the near future.
Following the separation from the MSC, Maersk has confirmed the rumors that it will not form any other alliance. The company plans to focus on integrating its ocean business into logistics by elevating operational control over the services it provides.
The Iskenderun Port will be closed, most likely, after the Turkey - Syria earthquake. Evergreen and other carriers already announced that they would divert their cargo. The ripple effects are expected to spread to other ports and destabilize supply chains.
Routes & services
- CMA CGM is almost done with the acquisition of La Méridionale, a ropax operator with 3 ships that will become the part of CMA CGM.
- FMC has MSC on its radar demanding an explanation of why the company charged SOFi Paper Products a congestion fee. If there is none, the refund must follow.
- Rail freight services between the Rail Service Centre in Rotterdam and the Contargo terminal in Mannheim run by Hupac will restart on Feb 13.
Other
- The Indian container market is becoming the carrier’s new target in attempts to redeploy their tonnage to improve capacity utilization and elevate profits. MSC’s Asia-US west coast connection will include calls at Nhava Sheva (JNPT) and Mundra in India and Cosco/OOCL consortium is beginning a West India-US east coast routing.
- It is no secret that Asia was disrupted by the supply chain shocks which cost ASEAN economies an estimated $17bn a year, according to data. However, studies show that regardless of the constraints, the economies are on the growth track. In the case of China, for example, the growth will be due to the strategy of diversification. The country has put some of the production centers and warehouses outside China.
- The Port of Riga is going through a major increase in throughput containers in the aftermath of the geopolitical situation. The port has handled 460,700 TEU which is 16% more than the last year’s KPI.
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.
