Freight transportation reports, projects and other news from outside North America
12/3/2023
South Africa: Transnet to receive R47 billion from government to suppoert recovery plan
On Dec. 1, The Republic of South Africa’s National Treasury announced it would issue beleaguered Transnet with a R47 billion (South African rands) guarantee facility in support of the rail system’s recovery plan, including meeting its immediate debt obligations.
Transnet will drawdown an initial amount of R22.8 billion to “deal with immediate liquidity matters,” including settling maturity debt, and government officials are “confident that this guarantee facility alongside swift implementation of the Transnet Recovery Plan will be sufficient to resolve Transnet’s challenges,” National Treasury officials said.
Panama Canal: Canal congestion ‘set to worsen’ — container shipping market intelligence firm
The number of daily neo-panamax transit slots on the Panama Canal will be cut from eight to five by Jan. 1 2024, and there will be a weekly limit of 35 transits, according to container shipping market intelligence firm.
“Containerships currently account for 29 weekly neo-panamax transits (before adjustment for blanked sailings) of which 18 are northbound voyages (to the U.S.) and 11 are southbound (from the U.S.),” according to Linerlytica’s Market Pulse report, issued on Nov. 27. “These containership transits account for 83% of the January transit quota, leaving just 17% of these slots to non-container ships.” As of last week, congestion at the canal was building up, with 22 containerships waiting, of which 14 were neo-panamax ships, Linerlytica officials said.
Israel: ZIM reroutes ships in response to threats in Arabian, Red seas
In light of “the threat to safe transit of global trade in the Arabian and Red Seas,” global container shipping company ZIM Integrated Shipping Services Ltd. is taking temporary measures to ensure crew, vessel and cargo safety by re-routing some of its vessels, the global container shipping company announced on Nov. 27.
One result of the measures: longer transit times in the relevant ZIM services are anticipated, though every effort is being made to minimize disruptions,” officials from the Haifa, Israel-based company said. ZIM plans to re-route vessels around Africa.
Container xChange issues ‘The Future of Shipping in 2024’ report
Most supply chain professionals predict China Plus One to “prominently emerge,” and competition and shrinking profits will lead to more market consolidation in 2024.
That’s but two findings in shipping industry research firm Container xChange’s second annual “2023 Shipping Industry Trends and Future of Shipping in 2024” report.
Issued Nov. 21, the report is based on surveys conducted with global supply chain professionals and indicates “high probability of market recovery failure in 2024,” Container xChange officials said. The industry will “grapple with persistently reduced demand and oversupply, potentially leading to fiercer competition, further reduced profits, and possible market consolidation. Although container schedule reliability is improving, persistent challenges remain. Blank sailings are expected to rise in response to market volatility, while imbalanced container availability, driven by economic crises, may continue in certain regions.”
Among the findings:
• “In the wake of longer-term factors such as inflation, increased interest rates, and a shift in consumer spending patterns from goods to services, cautious consumer spending in 2023 is expected to extend into 2024,” Container xChange officials said. “This caution is anticipated to impact the demand for imported manufactured products, with implications for the container market.”
• Oversupply risks and increased deliveries: “The shipping industry faces the risk of oversupply in 2024 as deliveries are set to increase to 2.95 million TEUs. The surge in deliveries, including ‘Megamaxes’ and ‘Neopanamaxes,’ may lead to intense competition, reduced profits, and potential mergers and acquisitions.”
• Geopolitical uncertainties and shifts in trade routes: “Geopolitical uncertainties in 2023, including conflicts in Ukraine, Taiwan, and Israel, significantly impacted the shipping industry. These effects are expected to persist in 2024, with potential consequences for trade routes. The Russia-Ukraine conflict led to the closure of Black Sea ports, causing congestion and delays in goods transportation. Potential conflicts in the Taiwan Strait and the Israel-Palestine region pose risks to key shipping routes, impacting trading in 2024 and beyond.”
• China Plus One diversification: “Various factors, including ongoing trade tensions between the United States and China, rising labor costs, and concerns about potential future manufacturing disruptions, are driving companies to diversify away from China. While completely disengaging from China is challenging due to extensive electronic supply chains, companies are making strategic moves to relocate final manufacturing and assembly processes outside of China.vChristian Roeloffs, CEO of Container xChange, noted the expected increase in trade between China and Southeast Asia, India and other similar destinations.
Denmark: Citing ‘worsening pricing outlook’ in its ocean group, Maersk to cut 10,000 jobs
On Nov. 3, Copenhagen-based A.P. Moller–Maersk’s issued its third-quarter 2023 financial results, which company officials “were in line with expectations in a difficult market environment with rates well off their 2022 peak and tested by the increase of capacity in ocean.” The company posted revenue of $12.1 billion compared with $22.8 billion for the same year-ago period, and an EBIT margin at 4.4% impacted by lower freight rates and lower volumes.
“Maersk has imposed rigorous cost containment measures during the year to effectively cushion the impact of the challenging market conditions, including headcount reduction from 110,000 early 2023 to around 103,500 today,” Maersk officials said in a Nov. 3 statement. “Given the worsening price outlook in the Ocean unit, Maersk is intensifying those measures and today introduce plans to further decrease the workforce by 3,500 positions, with up to 2,500 to be carried out in the coming months and the remaining to extend into 2024. This will reduce the global workforce to below 100,000 positions.”
Lufthansa Cargo launches high-speed td.Zoom freight service
Last month, Lufthansa Cargo launched td.Zoom, a high-speed service for time-critical freight. It’s Lufthansa’s fastest shipping service, company officials said in a Nov. 3 statement. “The special handling processes at Lufthansa Cargo’s hubs in Frankfurt, Munich, and Vienna enable fastest transport times with ramp supervision during aircraft loading and unloading, dedicated ramp transfer from the warehouse to the aircraft and vice versa as well as tail-to-tail transfer on demand,” company officials said. The service includes 24/7 td.Zoom Customer Service, which monitors and steers shipments, and “takes immediate action to prevent irregularities,” they said.