Dear readers! We present to your attention the seventh issue of Logistics for 2024. In the latest issue, we continue the topic of digitalization of logistics. Thus, P.A. Zabolotneva in her article examines the main trends in the digitalization of logistics activities and presents supply chain management tools. In addition, the author identifies five digital technologies that will become drivers of the industry's development. D.V.
Dear readers! We present to your attention the sixth issue of Logistics for 2024. On its pages, we summarize the results of the international exhibition of logistics, transport, warehouse equipment and Logistika Expo, which became the main premiere of this year. Our editorial staff took part in the event, as a result of which they made useful acquaintances and found new readers. In the latest issue, we continue the topic of automation and robotization in the industry.
Dear friends! We present to your attention the fifth issue of Logistics for 2024. Like you, our dear readers, we see an increasing trend of digitalization and automation of the logistics industry, and more and more authors are paying attention to it.
Xeneta, the leading global benchmarking and market intelligence platform for containerized ocean freight, says that in-depth analysis of Q3 container shipping costs reveals positive trends for the beleaguered container carrier segment. However, the market remains highly complex and unpredictable, with the ‘Hanjin Effect’ already ebbing away.
According to Xeneta, which crowd sources shipping data from more than 600 major international businesses, covering more than 60,000 port-to-port pairings and over 17 million contracted rates, the recent collapse of Hanjin laid the foundations for a trading period like no other.
“It was certainly a stand-out quarter,” states Xeneta CEO Patrik Berglund. “Short-term rates on the world’s number one trade route – Far East Asia to North American main ports – sky-rocketed, largely due to Hanjin transforming oversupply to undersupply almost overnight. This enabled significant rate hikes, with the market average price for 40’ containers climbing by 47% across Q3, starting at 1240 USD and ending on 1826 USD.
“However, looking at today’s data we can already see that prices are trending down somewhat, meaning the Hanjin Effect is history. There is clearly still an issue of structural overcapacity, albeit more balanced now, and that pushes prices down – with risks for both the carriers and BCOs/shippers. Short term rates on the number two route – Far East Asia to North Europe – actually fell by 24% in Q3.
“That said, this is more of a stabilization, or flattening out, as it should be seen in the context of a longer-term climb. Market averages for 40’ containers hit a low of 662 USD in April and had risen to 1500 USD by the close of September on this route. So, the fall isn’t as serious for carriers as it may seem. However, if it continues that’s another matter. That could bode for a very challenging 2017 for carriers and, therefore, a risky time for shippers who must have predictability in their supply chains.”
On the plus side for carriers, Xeneta’s CEO notes that reported market low rates have risen spectacularly since Q1, climbing by 258% from the end of that quarter to the beginning of Q4. That curve stabilized in Q3, but remains on an upward trajectory.
The data and trends are complex, Berglund admits, but the feedback from Xeneta’s network of global shippers is perhaps simpler to decipher. He explains that large volume shippers seeking long-term contracts are reporting carriers aren’t prepared to negotiate near the bottom end of the current market, where many of the older, expiring long- term contracts sit.
“This should wave a red warning flag to any shipper tendering/bidding for new long-term rates in January, the European norm, and next May, the US standard,” he says. “It makes it clear carriers have an expectation that the market will continue to pick up.
“From our data we can see how much long-term rates have risen through Q2 and Q3. For example, the cost of shipping a 40’ container for the Far East to North Europe route has escalated from a low of 361 USD in April to 965 USD on 30 September, a 168% increase. With this in mind shippers probably shouldn’t expect the same low price contracts in 2017 as they secured in 2016.”
Berglund adds the caveat that it’s “too early” to accurately predict the market for 2017 though, citing the unpredictability of a segment that changes almost daily. The Xeneta CEO argues that the only way for both shippers and carriers to keep up with these dynamic developments, and get the best prices for cargoes, is to utilize the latest business intelligence and analytical tools.
“Xeneta gives users an unrivalled real-time view of pricing, something that was not previously possible with static, historical rate reporting,” he concludes. “This allows all businesses through this key link in the logistics chain to benchmark their performance against the wider market, and therefore negotiate rates that deliver optimal value.
“This market moves incredibly fast, but with the right data your decision making can always stay one step ahead.”