Panama Canal Announces Reduced Booking Slots
On October 31, 2023, the Panama Canal, a key maritime route, disclosed intentions to reduce daily ship transits in response to severe drought conditions. Starting November 3, the Canal’s authorities will decrease ship booking slots from 31 to 25 daily. In the subsequent three months, the daily transit number is projected to decline further, reaching 18 slots by February 1. Concurrently, the Canal Authority has initiated actions like modifying the ship draft and constraining daily transits to conserve water.
These transit limitations have resulted in substantial delays, leading to extended queues of ships awaiting passage. Data from the US Energy Information Administration suggests that these delays have contributed to an uptick in global shipping rates attributed to the reduced availability of ships. In particular, transportation delays for gas have amplified in the Panama region, causing a surge in the costs associated with transporting liquefied gas, predominantly from the US.
Maritime Rerouting: Ships Divert from Ashdod to Haifa
The ongoing conflict between Israel and Hamas has influenced maritime trade, resulting in the rerouting of cargo vessels initially headed for Ashdod to Haifa for safety. This change was highlighted when Evergreen Line, a shipping company, opted to avoid Ashdod recently.
Despite the ongoing events, Israel’s primary ports remain operational. Israel’s reliance on its ports for essential commodities means disruptions can hinder resource distribution. The ‘war risk’ premium imposed by global insurers could increase regional goods and service costs. The task of maintaining port operations and ensuring inland good deliveries is further complicated by a truck driver shortage.
EU Emission Rules May Influence Shipping Patterns
The EU plans to introduce a new carbon tax measure on January 1, 2024. This initiative, focused on curbing emissions, will apply to vessels traveling within the European Union (EU) and, to a lesser extent, those initiating or concluding journeys outside the EU. CLECAT, a Brussels-based lobby group, has expressed concerns regarding potential shifts in shipping behaviors, particularly if carriers opt for docking at non-EU ports to reduce expenses.
The implications of this regulatory change might be profound for commercial activities. The director general of the European Association for Forwarding, Transport, Logistics, and Customs Services has highlighted the potential repercussions on the competitiveness of EU ports if carriers modify their routes. Such changes could alter the distribution of merchandise, introducing the risk of cargo holdups and influencing the trade framework in the area.
Progress on Asset Acquisition between GLP and Chinese Logistics Group
On October 18, GLP (普洛斯), a prominent supply chain company, updated its fixed-income investors regarding its current negotiations about selling a portion of its assets in China. These dialogues with the strategic buyer, Chinese Logistics Group (中国物流集团), are advancing notably. By September 19, the Chinese Logistics Group had concluded their due diligence on these assets and aimed to finalize the acquisition by the year’s end.
These assets, dispersed across 70 regions in China, are integral for logistics, storage, and data centers. The rationale behind GLP’s decision to offload these assets is to reduce its financial leverage and repurchase outstanding debt. As these changes take shape, businesses involved in trade might anticipate modifications in the logistics infrastructure, potentially resulting in more streamlined operations in the affected areas.
Brazilian Ports Face Sugar Backlog Amid Global Need
Brazil, recognized as the world’s top sugar producer, is encountering congestion at its primary ports, affecting its sugar export rate. This situation coincides with a heightened global sugar demand. Factors like a fire at Paranagua, one of Brazil’s significant ports, and an Amazon drought have exacerbated the logistical challenges. Such congestion is reminiscent of scenarios from over ten years ago when port delays influenced sugar prices.
The present logistical issues are stressing the sugar supply chain. Port delays have intensified competition between sugar and grain shipments. The Amazon’s persistent drought has redirected about 1 million tons of grains to the southeastern ports, further challenging sugar shipments. With upcoming events, such as Brazil’s impending soybean harvest, there may be a shift of focus from sugar to other products, underscoring the importance for involved parties to watch the developments carefully.
Vietnam Records Trade Growth in 2023
In 2023, Vietnam observed a positive shift in its trade dynamics. October registered a trade balance of $3 billion, elevating the cumulative trade surplus from January to October to a five-year peak of over $24.6 billion. This 10-month surplus represents a significant increase from the previous year, as indicated by Vietnam’s Ministry of Industry and Trade.
The foreign-invested enterprise sector contributed notably to this surplus, recording an export surplus of $42.6 billion. On the other hand, the domestic economic sector recorded a trade deficit of approximately $18 billion. A change in the trade balance this year can be attributed to a decline in imports compared to exports. Data shows a 12% reduction in imports, amounting to $267 billion, while exports decreased by 7.1% to $291.28 billion. In response to global challenges, the Ministry plans to stimulate domestic consumption and accelerate trade talks, targeting market, product, and supply chain diversification.
Port of Tacoma Receives Federal Grant for Expansion
The Port of Tacoma has secured a federal grant worth over $54 million, as stated by the offices of US Senators. Originating from the US Department of Transportation’s Maritime Administration’s Port Infrastructure Development Program, these funds are designated for the initial phase of the Husky Terminal expansion. The aim is to improve the port’s operations and position it as a key maritime center.
The project includes enhancements to the terminal yard, allowing the docking of two large vessels concurrently. The plans also detail the installation of 40 racks for temperature-sensitive commodities and a revamp of structural supports for improved terminal truck pathways. Emphasis on power infrastructure updates indicates a move away from diesel-powered cargo handling methods. These changes are intended to meet the needs of transporting vital export goods, such as perishables, and underline the ambition to be competitive in global maritime trade.
Temu E-Commerce Platform Experiences Strong Growth
Over the past year, the cross-border e-commerce platform Temu has significantly expanded its operations. In the third quarter, it reported a sales volume that exceeded $50 billion. This trajectory continued in September, with the platform recording a daily GMV of $80 million, mirroring its performance from the first half of the year. With forthcoming shopping events, there are projections that the platform could approach or even exceed its annual target of $150 billion GMV.
The platform’s strategies have garnered attention in the trading sector. The US has been a significant market, responsible for 60% of the platform’s total sales volume. By July 2023, their retention rates were comparable to other prominent e-commerce platforms. The platform has a presence in 47 countries and added ten more in September. The investments in logistics, warehousing, and promotional campaigns indicate ongoing efforts to adapt to market trends and demands, both domestically and internationally.
Port of Piraeus Records Sustained Growth
Piraeus Port Authority, managing the Mediterranean Sea’s principal container terminal, is on track to exceed its performance for the third year in a row. The information was shared by Shanghai-based COSCO, which manages the port. This organization secured a 35-year management contract for two container terminals in Greece’s primary port in 2008 and later purchased a 67% share in the port authority in 2016. The port’s financial revival has had a positive impact on Greece’s economy.
This shift has implications for entities engaged in European goods transportation. The port’s enhanced infrastructure appeals to various sectors due to its seamless link with European railways. A specialized transit line combining marine and terrestrial paths provides expedited access to European cities, offering an alternative to conventional maritime routes. Such upgrades have led to job creation, with the port authority directly and indirectly supporting around 14,000 positions.
5G Integration Enhances Spanish Ports’ Operations
The Port of Algeciras, located in Spain’s southern region, has adopted technological enhancements. Recognized for its strategic importance in international trade, the port has integrated 5G technology to bolster its operational processes. This adoption accelerates data transfer rates, allowing for real-time functions and advanced remote connectivity.
Similarly, the Port of Huelva in Andalusia’s western region has also benefitted from 5G adoption. The introduction of high-resolution cameras assists in better goods transportation oversight. Notably, the port has developed a “digital twin” using VR technology. This virtual representation offers a real-time view of the port’s activities, fostering effective management tactics and more streamlined workflows.
US October LNG Exports Rise Notably
In November 2023, US liquefied natural gas (LNG) exports showed an increase. October saw exports totaling approximately 7.92 million metric tons, the second-highest monthly figure ever documented. This number approaches the record of 8.01 million metric tons set in April. During the year’s first half, the US outpaced other countries to become the leading global LNG exporter.
Europe emerged as the primary destination, receiving 60% of the US LNG exports in October. Europe’s heightened demand for US gas occurred after decreases in pipeline supplies from Russia and other restrictions on its energy exports. In contrast, Asian demand waned, and their share of US LNG exports declined from 30% to 20% in a month. Concurrently, global gas supply issues and international challenges led to a 70% increase in Asia’s LNG prices since the start of August.
Rapid Courier Service Debuts in Hong Kong
On October 27, global logistics service operator J&T Express began trading on the Hong Kong Stock Exchange. Originating from Indonesia in 2015, it received the stock code 1519. The company’s debut was notable, with shares priced at 12 Hong Kong dollars, resulting in a net sum of around 35.28 billion Hong Kong dollars. By the day’s close, the market valuation reached over 1,057 billion Hong Kong dollars.
The company intends to use the funds from the listing to bolster its global logistics network. Their plans focus on expanding delivery and storage in Southeast Asia and diversifying into new markets. Since its establishment, it has expanded into seven Southeast Asian countries and entered the Chinese market by 2020. By 2022, they operated in thirteen countries, including Latin America, the Middle East, and North Africa.
India-Bangladesh Collaboration on Infrastructure Projects
Leaders from India and Bangladesh recently launched three development projects to enhance trade and connectivity, especially benefiting India’s northeastern states. Notable among these is the Akhaura-Agartala rail link, the first connecting India’s northeastern areas to Bangladesh. This initiative originated from a memorandum of understanding signed in 2013.
Another key project is the Khulna-Mongla Port rail line, linking Mongla, Bangladesh’s second largest port, to the broad-gauge railway. This project aims to reduce road transport reliance and increase Mongla Port usage, providing Nepal and Bhutan with better seaport access. Additionally, the Maitree super thermal power plant is set to cater to Bangladesh’s growing power needs, presenting a cleaner energy source than prevalent diesel-based solutions.
Valenciaport’s METEOR Project Aims to Boost Maritime Safety
Fundación Valenciaport in Valencia, Spain, has launched the METEOR project to enhance the safety of maritime transport. Running from October 2023 to September 2026, this initiative has a budget close to €3 million ($3.2 million) and is co-supported by the Horizon Europe program. The project’s primary objective is to ensure the security of goods inside containers.
Currently, European customs inspect only 5% of containers due to high cargo volumes. To address this, METEOR introduces a vapor-based detection method. By using advanced sampling techniques and instruments, including Non-Targeted Screening (NTS), the goal is accurate detection. This detection tool is portable and cost-effective, designed to identify a variety of illicit materials, from narcotics to explosives and possible biological hazards. The initiative involves collaboration from 12 entities spanning The Netherlands, Belgium, Spain, and Ireland.
Canadian Cargo Mishap Near Iqaluit Port
A cargo ship named M/V Sivumut faced an incident near Iqaluit, which is the capital of Canada’s Nunavut territory. During the occurrence, around 20 containers were lost overboard, leading to the rescue of one individual from the waters, who was later admitted to a hospital.
Recovery efforts are currently underway, with the Canadian Coast Guard and related agencies at the forefront. Considering the possibility of drifting containers or them reaching the shore, nearby mariners and the local community are advised to exercise caution and refrain from approaching these containers for safety purposes.
UPS to Acquire Happy Returns by Year-End
UPS recently announced its intentions to acquire the US-based software and reverse logistics firm Happy Returns from PayPal. The completion of this acquisition is expected by the fourth quarter of the year. Happy Returns provides return services that are box-free and label-free, aiming to simplify the process for businesses and consumers.
Joining forces with Happy Returns, which currently serves over 800 merchants, will potentially expand the number of return locations that do not require boxes or labels across the US. This merger is intended to refine return processes, reduce e-commerce costs, and lead to smoother operations for those in the supply chain.
Improved On-Time Ship Arrivals in September
In September 2023, trans-Pacific shipping services experienced an increase in on-time arrivals. This rise is linked to imports from Asia reaching a peak for the year. The enhanced reliability can be connected to the growth in shipping capacity and a decrease in voyage cancellations during the month.
Despite the improved punctuality for ships heading from Asia to the US West Coast, registering a 47.8% on-time rate in September, draft challenges at the Panama Canal persisted. These issues could influence the punctuality of vessels heading to the US East Coast.