Southeast Asian E-commerce Trends in October 2023
In October 2023, the e-commerce platforms Lazada and Shopee experienced a significant traffic change in Southeast Asia. Data from Similarweb showed a total visit count exceeding 724 million across several countries, marking a 2.8% rise from the previous month.
This points to a notable shift in online consumer behavior. The increase in local e-commerce platform traffic in Indonesia and Vietnam suggests a growing regional preference for localized online shopping experiences.
Decline in Freight Rates Across Major Shipping Routes
This week marked an end to the four-week rising streak of the Shanghai Export Container Freight Index (SCFI), with a 3.52% drop influenced by falling rates on North American routes. The most significant decrease was seen on the Far East to US West Coast route, with a 12% drop in freight rates.
This change indicates a shift in the market dynamics, especially for US West Coast routes where freight rates fell below $2000. This trend suggests a period of adjustment, potentially impacting shipping strategies and cost considerations.
RMB’s Mild Rebound Against USD in November
Since the beginning of November, the Chinese Yuan (RMB) has seen a moderate recovery against the US Dollar. Data up to November 6th indicates a 0.91% increase in the offshore RMB rate and a 0.57% increase in the onshore rate, both surpassing the 7.3 threshold.
This trend reflects a nuanced shift in the financial landscape. The RMB’s recovery is influenced by a combination of policy directives, improving economic indicators, and shifts in international financial markets. These developments could potentially impact pricing strategies and cost calculations in international trade, requiring a keen eye on currency fluctuations.
Uptick in US Import Shipping Volumes
As of October 2023, the United States has witnessed a 4.5% month-over-month increase in maritime import volume, a notable rise compared to the same period last year.
This growth marks the fourth consecutive month of positive growth since July, indicating a slight rebound in shipping volumes despite an overall 13.8% year-over-year decline.
Challenges and Changes in the Container Shipping Market
The container shipping market is experiencing a notable shift. BIMCO’s recent forecast indicates a global container shipping volume change of between negative 0.5 percent and positive 0.5 percent in 2023 and an increase of 3% to 4% in 2024. Despite this, the Shanghai International Shipping Institute reported a decline in China’s shipping prosperity index in the third quarter of 2023, reflecting a less optimistic market than expected.
With trade volumes on key routes expected to recover only by 2024 and varying financial pressures on businesses and consumers, strategic planning and adaptability will be essential for navigating these market fluctuations effectively.
Rising Presence of Chinese E-commerce in the US Market
A recent joint study by Nikkei and data.ai revealed a surge in the user base of Chinese e-commerce platforms Temu and SHEIN in the United States. In October, the combined user count of these apps reached approximately 110 million, a fourfold increase within a year, reaching 90% of dominant player Amazon’s user base. Temu and SHEIN, specializing in daily goods and fashion, respectively, have seen their new downloads in the US reach nearly five times those of Amazon.
This trend signals a shift in consumer preferences and market dominance. The rapid growth of these platforms indicates a diversifying e-commerce landscape, which could impact strategies for businesses looking to engage with a broader, more varied consumer base in the global market.
Surge in Global Marine Insurance in 2022
In 2022, the global marine insurance market experienced a significant growth of 8.3%, reaching $35.8 billion. This increase was attributed to the rebound in trade, rise in asset values, and premium adjustments. Ocean hull premiums saw a 5.7% rise to $8.4 billion, and cargo insurance premiums grew by 8.3% to $20.5 billion. The offshore energy sector also witnessed a 7.3% growth, with premiums totaling $4.1 billion.
This growth in insurance premiums reflects a post-pandemic recovery and heightened activity. The increase in cargo insurance premiums indicates a resurgence in global trade. The improved loss ratios and low claims environment suggest a healthier insurance market, providing more stability and potentially more favorable terms for businesses involved in maritime trade.
Cyberattack Impact on Australian Ports
A recent cyberattack on DP World, a major port operator, caused significant disruptions at several Australian ports, including Melbourne, Sydney, Brisbane, and Fremantle. The attack, which occurred on a Friday, led to a backlog of 30,000 shipping containers and halted operations until partial resumption on Monday. The company is working to clear the backlog, but local strikes and ongoing investigations into the attack are expected to delay the return to normal operations.
This situation poses challenges for the global supply chain, particularly for importers and exporters relying on Australian ports. The delay in container movement affects the timely delivery of goods, potentially disrupting international trade schedules. The incident highlights the vulnerability of modern ports to cyber threats and underscores the need for robust cybersecurity measures in the maritime industry.
Central America Service to Port of Wilmington
Seaboard Marine is set to launch a new direct service to the Port of Wilmington in North Carolina beginning later this month. This service aims to bolster the trade connection between Central America and the US East Coast. It will particularly benefit the transportation of apparel, textiles, and various agricultural products, including pork and poultry. Starting November 26th, two container vessels will operate weekly, transporting both dry and refrigerated containers from ports in Guatemala, El Salvador, Honduras, and Nicaragua to Wilmington.
By providing a direct link from Central America to the US East Coast, this new service can bring cost savings and faster shipping times. This is particularly valuable for perishable goods, where maintaining product quality is essential. The addition of this route enhances trade efficiency and opens up new opportunities for market expansion in both regions.
Record Performance at South Carolina Ports
In October, South Carolina Ports (SC Ports) reported a significant achievement, with container volumes showing signs of recovery, reaching new record highs. The highlight was at Wando Welch Terminal, handling 116,745 pier containers, the highest monthly volume ever, surpassing the previous record set in March 2021.
Despite a 9% year-over-year decrease in overall container volumes, largely due to a 27% drop in empty volumes, loaded imports and exports only saw a marginal 1% decline. The record-breaking volumes at Wando Welch Terminal, along with the growth in rail-served inland ports like Inland Port Greer and Dillon, highlight the port’s strategic role in expediting goods to the market.
