Posted on March 26, 2024
Global shipping news

Weekly Shipping & Logistics News Wrap, Week 13 

Top Highlights 

  • Booking slots now available at Panama Canal  
  • Shipping industry profitability nears pre-pandemic levels  
  • Red Sea route eases carrier capacity crunch  
  • IMO sets 2027 for global greenhouse gas levy  
  • Maersk unveils new warehouse in Mexico 

Let’s look at the above shipping and logistics headlines in more detail: 

Booking Slots Increase at Panama Canal  

The Panama Canal has gradually increased its daily booking slots, now offering 27, as efficient water-saving measures aid the recovery from the region’s worst drought conditions in recent history. Strategies like cross-filling, which involves reusing water from one lock chamber to another, have helped replenish the crucial Gatun Lake that feeds the canal’s locks. While the lake’s level had dropped to 79 feet last July, it has since risen by a foot, prompting cautious optimism. However, the canal acknowledges that full recovery may take time, and it continues to explore long-term solutions like improving water storage reliability. 

Shipping Industry’s Profitability Curve is Closer to Pre-Pandemic Norms  

According to a Sea Intelligence report, major shipping lines experienced a steep year-over-year decline in revenues in the 2023 fiscal year, with figures ranging from a 46.6% to 62.6% drop. Notably, carriers like ZIM, Yang Ming, and Wan Hai recorded EBIT losses during this period. While four shipping lines managed to report an EBIT of over $1 billion, profitability levels are nowhere near the unprecedented heights witnessed during the 2021-2022 pandemic era. An analysis of EBIT per TEU (Twenty-foot Equivalent Unit) offers a clearer picture, with Maersk’s $94/TEU and Hapag-Lloyd’s $235/TEU standing out as relatively strong performers compared to pre-pandemic years. 

Red Sea Diversions Ease Capacity Crunch for Carriers  

The ongoing attacks on commercial shipping in the Red Sea have inadvertently benefited carriers by easing the supply-demand imbalance. With vessels being rerouted via the longer Cape of Good Hope route, the demand for ships has temporarily increased, leading to a 41% surge in charter rates since December. Additionally, average time-charter durations have extended by three months, and freight rates remain 52% higher than at the end of 2023. This equilibrium, however, is contingent on the duration of the Red Sea attacks and their effect on available capacity. 

IMO Paves Way for 2027 Global Greenhouse Gas Levy Implementation  

The International Maritime Organization (IMO) has taken a significant step towards introducing a global greenhouse gas (GHG) levy by 2027. During the recent Maritime Environment Protection Committee (MEPC) meeting, a framework was agreed upon for mid-term measures, including a fuel standard and an economic measure. Expert groups have been established to further deliberate the specifics, laying the foundation for an agreement that aligns with the industry’s net-zero emissions target by 2050. The IMO’s Secretary-General, Arsenio Dominguez, expressed confidence in the implementation of a pricing mechanism to address GHG emissions. 

Key Market Indicators week 13

Maersk’s New Cross-Border Trade Facilitator in Tijuana, Mexico  

Global logistics giant Maersk has unveiled a new 30,000m² warehouse facility in Tijuana, Mexico, strategically located to cater to cross-border trade with the United States. The facility, positioned in the Prisma XII industrial park in Baja California, capitalizes on Tijuana’s significance in US-Mexico trade by being in close proximity to major commercial ports like Los Angeles/Long Beach and Ensenada. Aligned with the Manufacturing, Maquiladora, and Export Services Industry (IMMEX) program, the site offers services like sorting, storage, cross-docking, inventory management, and value-added services like labelling and packaging. The LEED Gold-certified facility is also equipped to handle e-commerce shipments under Section 321. 

House of Shipping Insight 

The shipping and logistics industry continues to navigate choppy waters, with capacity constraints, profitability challenges, and environmental concerns shaping the landscape. While temporary factors like the Red Sea diversions have provided a respite, the industry must brace for a potential supply-demand imbalance as normalcy returns. Initiatives like the IMO’s GHG levy and carriers’ investment in sustainable infrastructure underscore the urgency to address climate impact. Agility and resilience will be key as the industry adapts to shifting trade dynamics and stakeholder expectations. 

Weekly Shipping & Logistics News Wrap, Week 13 

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