Posted on February 26, 2024
Global shipping news

Weekly Shipping & Logistics News Wrap, Week 9 

Top Highlights

  • Red Sea disruption increases shipping emissions risk. 
  • Shipping industry enters contracting season. 
  • FMC sets rules on demurrage and detention. 
  • Middle East bids for DB Schenker. 
  • EY points towards GenAI adoption hurdles. 

Let us look at the above shipping and logistics news in more detail: 

Red Sea Diversions Amplify Global Shipping Emissions by 70% 

The UN Conference on Trade and Development (UNCTAD) warns that geopolitical strife and climate impacts on key maritime routes, especially the Suez and Panama Canals, are drastically reshaping global trade. The diversion from the Suez Canal to alternative routes, like the Cape of Good Hope, could spike greenhouse gas emissions by a staggering 70%, undermining efforts towards environmental sustainability in shipping. 

Transpacific Spot Rates Soar as Shipping Industry Enters Contracting Season 

In more shipping and logistics latest news, transpacific container spot rates are on the rise as the contracting season begins, with potential resistance from carriers on new contract rates. Xeneta reports a 1% increase for the Asia-US west coast route, now averaging $4,762 per 40ft container, significantly up from last year’s $1,329. The Freightos Baltic Index shows a 3% rise for the Asia to US east coast route to $6,764 per 40ft container, doubling the rate from a year ago. As industry stakeholders prepare for the JoC TPM conference in Long Beach, carriers aim to leverage the higher spot rates to negotiate substantial contract rate increases. 

FMC Finalizes Guidelines on Demurrage and Detention 

The Federal Maritime Commission (FMC) has issued definitive guidelines on demurrage and detention practices, aiming to bring clarity and fairness to these charges. The move, part of the Ocean Shipping Reform Act of 2022 (OSRA 2022) implementations, reflects a significant step towards addressing the $6.9 billion D&D fees collected in recent years, aiming to mitigate undue financial burdens on shippers. 

Key Market Indicators week 9

Middle East Investors Eye DB Schenker Acquisition 

The sale of logistics giant DB Schenker has attracted interest from over 20 bidders, including Middle Eastern companies and funds. The potential takeover by entities such as DP World and the Saudi Arabian Public Investment Fund highlights the strategic importance of logistics and supply chain assets on the global stage, despite geopolitical and regulatory scrutiny. 

EY Highlights Challenges in GenAI Adoption for Supply Chains 

A report by EY emphasizes the roadblocks in adopting generative AI within supply chain management, including cybersecurity, talent shortages, and legacy system integration issues. Despite these challenges, GenAI holds transformative potential across supply chain planning, sourcing, and manufacturing, pointing to a need for strategic investment in technology and skills. 

House of Shipping Insight 

The stark environmental impact of route diversions underscores the urgent need for sustainable shipping practices. Meanwhile, the tug-of-war over transpacific rates highlights the ongoing challenges in balancing cost pressures with service demands. The FMC’s new guidelines signal a regulatory shift towards greater transparency and fairness, a crucial step in stabilizing shipping operations.  

The keen interest in DB Schenker’s acquisition illustrates the strategic value of logistics networks in today’s economy, suggesting that the sector remains a hotbed for investment and competition. Lastly, the challenges surrounding GenAI adoption in supply chains spotlight the technological and human capital investments necessary to harness its potential fully. Collectively, these stories paint a picture of an industry at a crossroads, navigating the pressures of innovation, sustainability, and economic viability. 

Weekly Shipping & Logistics News Wrap, Week 9 

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