Posted on March 18, 2024
Global shipping news

Weekly Shipping & Logistics News Wrap, Week 12 

Top Highlights 

  • Steady vessel sizes amid volatility on Asia-North Europe route. 
  • Gemini cooperation aims for cost reductions.  
  • Ocean Alliance unveils new service network.  
  • DP World invests strategically in South Korea.  
  • Fluctuating rates in transpacific shipping lanes. 

Let’s look at the above shipping and logistics news in more detail. 

Vessel Size Dynamics in Asia-Europe Trade 

The vessel size on the Asia-North Europe route has shown stability, with an almost horizontal trend line indicating no significant change in average vessel size. Conversely, the Asia-Mediterranean route has experienced a clear upward trend in vessel sizes since the latter half of 2023, a development that predates the Red Sea crisis. The Ocean Alliance notably increased its average vessel size following disruptions, but this adjustment seems tied more to network disruptions than a systemic shift. 

The impact of outliers is evident when comparing average to median vessel sizes, revealing the strategic adjustments made by alliances such as THE Alliance’s suspension of the FE5 service. This move, while not directly upscaling vessels, effectively reduces average slot costs by omitting vessels with lower efficiency.

Gemini Cooperation Looking to Reduce Costs 

The Gemini Cooperation, a new alliance between Hapag-Lloyd and Maersk, aims to introduce cost-saving measures amidst a challenging environment marked by geopolitical tensions and environmental regulations. By implementing a hub and spoke system, which traditionally has not been favored due to increased costs and reduced reliability, Gemini seeks to enhance efficiency. The alliance promises lower costs through better utilization and fewer port calls, potentially increasing the appeal of transhipment services despite historical reservations. 

Ocean Alliance’s Launches New Service Network 

In response to the unstable situation in the Red Sea, the Ocean Alliance’s ‘DAY 8 Product’ focuses on rerouting through the Cape of Good Hope, ensuring continued high standards of service visibility, reliability, and punctuality. This initiative underscores the alliance’s commitment to adaptability in face of disruptions, ensuring customer satisfaction through optimized transport solutions across key global trade lanes.

 

Key Market Indicators Week 12

DP World’s Strategic Investment in South Korea 

DP World announces a significant investment in a new logistics center in South Korea, aimed at enhancing the Busan New Port’s role as a crucial supply chain hub. This development is expected to not only improve logistics services for local and regional customers but also contribute to the growth of key Korean industries. The investment highlights DP World’s commitment to offering comprehensive supply chain solutions and strengthens Busan’s position in intra-Asia trade. 

Transpacific and Asia-Europe Rate Fluctuations 

The shipping industry continues to grapple with rate fluctuations across major trade lanes. Despite a general decline in spot rates, the impact of the Red Sea crisis and the subsequent rerouting around Africa has led to persistent high rates, particularly on the transpacific and Asia-Europe routes. Carriers are strategically managing capacity to mitigate rate erosion, while shippers navigate the challenges of securing cost-effective and reliable service agreements. 

House of Shipping Insight 

As the global shipping industry navigates through turbulent waters, the emphasis on cost management, service reliability, and adaptability remains paramount. The developments highlighted by key players and alliances reflect a proactive approach to overcoming the challenges posed by external factors and market dynamics. Through strategic investments, innovative service models, and collaborative efforts, the industry is poised to continue its crucial role in global trade, even in the face of uncertainty. 

Weekly Shipping & Logistics News Wrap, Week 12 

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