Posted on March 4, 2024
Global shipping news

Weekly Shipping & Logistics News Wrap, Week 10 

Top Highlights 

  • Red Sea crisis drives schedule reliability to record low. 
  • Strong Transpacific rates favour carriers in contract talks. 
  • CMA CGM’s completes historic acquisition. 
  • New trading opportunities with EU ETS. 
  • Kuehne+Nagel sees decline in profits.  

Shipping Schedule Reliability Hits New Low Amid Red Sea Crisis 

The shipping and logistics industry witnessed a significant drop in schedule reliability this January, hitting its lowest point since September 2022 due to the ongoing Red Sea crisis. According to Sea-Intelligence, the global schedule reliability fell by 5.1 percentage points month-over-month to 51.6%.  

This downturn reflects the challenges faced by the industry, with the average delay for late vessel arrivals worsening, highlighting the need for immediate solutions to restore confidence and efficiency in maritime logistics. 

Transpacific Rates Hold Strong, Benefiting Carriers Amid Contract Negotiations 

In shipping and logistics latest news, despite minor decreases, transpacific container spot rates remain significantly above last year’s figures, reinforcing ocean carriers’ strong stance in upcoming contract negotiations. Xeneta’s XSI shows the Asia-US west coast rate dropped 3% to $4,619 per forty-foot container, a stark increase from $1,316 the previous year. Before the Red Sea crisis, December’s rate was $1,593. Drewry’s WCI indicates the Asia-US east coast rate at $5,820, down 3% week-on-week but up 110% year-on-year, affected by Panama Canal limits and Cape of Good Hope detours. Asia-Europe routes see a gradual rate decline, with the XSI Asia-North Europe rate falling 1% to $4,262, against last year’s $1,316. Asia-Mediterranean rates are dropping fast, with a 6% decrease to $4,757. Meanwhile, the transatlantic North Europe-US east coast rate is down 2% to $2,091 but has risen 46% month-on-month as carriers shift to more lucrative routes. 

CMA CGM Completes Major Acquisition, Bolstering Logistics Capabilities 

French shipping giant CMA CGM has finalized its acquisition of Bolloré Logistics for €4.85 billion, marking a significant expansion in its logistics services. This acquisition, the largest in CMA CGM’s history, positions the company as the world’s fifth-largest logistics provider, enhancing its service offerings and reinforcing its commitment to delivering comprehensive and innovative logistics solutions.  

“The new entity, made up of CEVA and Bolloré Logistics, is the world’s number 5 in its sector. We will now be able to offer our customers a complete range of services and extend our expertise to new businesses,” said Rodolphe Saadé, CEO and chairman of CMA CGM. 

Key Market Indicators Week 10

EU ETS Sparks New Trading Opportunities and Risks for Maritime Sector 

The introduction of the EU Emissions Trading System (EU ETS) for the maritime industry has opened new trading avenues and strategies for shipowners. The EU Emissions Trading System was implemented on January 1st, mandating that ship owners purchase EU allowances (EUAs) matching their vessels’ carbon emissions per tonne for visits to EU ports, serving as ‘carbon credits’. EUAs’ pricing is notably unstable, with fixed-price purchases available through auctions hosted by the European Energy Exchange (EEX) for the EU.  

The EUAs are tradable on the secondary market via brokers or digital platforms, where their prices vary based on market supply and demand dynamics. The volatility of EUAs prices and the speculative nature of stockpiling credits pose potential financial risks. As the industry adapts to the ETS, stakeholders are navigating the balance between compliance, profitability, and environmental responsibility. 

Kuehne+Nagel Faces Profit Decline Amid Market Challenges 

Global logistics leader Kuehne+Nagel reported a 50% reduction in operating profit for 2023, reflecting the broader industry’s struggle with excess capacity and a slowdown in trade. Despite these challenges, the company remains optimistic about stabilizing demand and has announced strategic acquisitions to strengthen its market position.  

Kuehne+Nagel has reached a deal to buy City Zone Express, a trucking firm from Malaysia with operations across Southeast Asia. The company boasts a fleet of 260 vehicles, employs 500 staff, and owns 860,000 square feet of warehouse facilities. The acquisition is anticipated to be finalized later this year. 

House of Shipping Insight 

This week’s shipping and logistics industry news highlights the sector’s resilience and adaptability amid ongoing challenges. From schedule reliability issues exacerbated by geopolitical crises to strategic acquisitions and the complexities of environmental regulation compliance, the industry continues to navigate a rapidly evolving landscape.  

The ability to adapt to these changes, leveraging opportunities for innovation and sustainability, will define the future success of companies within the maritime, air cargo, and freight sectors. As the industry looks forward, the balance between operational efficiency, environmental responsibility, and strategic growth remains paramount. 

Weekly Shipping & Logistics News Wrap, Week 10 

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