Ocean Update
Chinese New Year is one of the most important dates on the logistics calendar, as manufacturing and export operations in China grind to a halt and have a significant impact on global supply chains.
As such, businesses need to ensure cargo is out of the Far East on time to reach consumers in Europe. In order to meet this demand during the peak period over the next couple of months, Maersk is positioning the right amount of ocean capacity to carry volumes, as well sufficient empty container space to provide customers with the necessary equipment.
Chinese New Year falls earlier in 2023 than previous years (starting on 22nd January), so we encourage customers to begin planning cargo flows before the start of the European holiday season. Organising your inventory to overcome delays and having alternative options in place will also contribute to easing the stress on your supply chain.
As the market continues to normalise and the economic situation remains uncertain, we are expecting peak volumes from Far East Asia into Europe to stay below the level of the previous years – as similarly observed during the 2022 Golden Week.
Check Maersk schedules here.
Key Ports Update
The situation across European hubs and main gateway locations continues to recover after a turbulent 2022. The terminals remain resilient and the overall operation of ports, vessel waiting times and port productivity continue to improve across the board.
Our teams are monitoring the situation and working on improving schedule reliability to keep our customers’ supply chains moving. The focus remains on decreasing the number of longstanding containers, addressing instances of equipment shortages and ongoing backhaul coverage from Golden Week. To help maintain terminal operations at a feasible level, we kindly request you to please continue picking up full import containers or requesting dispatch as swiftly as possible after discharge. Sign up for ETA notifications here. The market has been under tremendous normalisation modulation, with Asia-Europe being one of the trades with frequent capacity adjustments following market demand since Golden Week. We expect this trend to continue throughout Q4.
As a consequence of inflationary pressure across the region, strike action continues to create disruptions across European ports, most recently at Port of Antwerp on 9 November. Read more on the advisory page. At Port of Liverpool, strikes recently ended but more action is possible later this month. Maersk teams continue to monitor the situation and will update the advisory page as more information becomes available.
The sustainability of supply chains is always at the forefront of our mitigation planning. Along with the blanking program, strikes and terminal congestions, Maersk has been striving to offering different solutions via alternative routes, alternative terminals, agile cargo delivery, or off-dock solutions to minimise the impact to our customers’ supply chains.
The end of the year typically brings challenges of its own in terms of weather conditions - seasonal storms in the north of Europe, fog in the south, and wind and rough sea on the west could affect operations and vessels. Maersk teams will keep a close eye on weather forecasts and keep our customers informed of any impact the weather conditions might have on cargo.
Air Freight Update
Within air freight, we are continuing to see high levels of inflation have an impact on demand, as lower sales and increased inventory are causing issues for businesses across Europe. As such, we have not yet seen signs of a significant peak season in Q4, although air will continue to be a frequently used option for companies moving last-minute stock ahead of the busy Christmas period.
Europe outbound continues to stabilise across a number of sectors, although inbound European cargo decreased by 10% in the month of October compared to 2021.
Elsewhere, capacity reductions between Europe and Asia due to sanctions against Russia are leading to significant re-routes of Asia-Europe flows via the Middle East – impacted further by a volatile jet fuel market that continues to affect rates.
Staff shortages in airports mean backlogs continue to pose issues, and although a more reliable ocean network has reduced the demand for air freight slightly, we expect the pressure to remain prominent in the coming weeks.
Maersk Air Freight will continue use its own controlled network to keep supply chains moving quickly and reliably when needed. For more information on our air network and expansion, click here.
Inland Update
Inland transportation continues to be the subject of pressure, with newly announced rail strike action in Europe causing disruption to services across the region. Port strikes on the continent are also having an impact on rail services, with recent action in Antwerp and Liverpool contributing to congestion on the network.
Although ocean freight reliability is improving to alleviate some of the pressure, the truck driver shortage and fuel price crisis are continuing to stretch the trucking industry. While Maersk is striving to improve the conditions for truck drivers in Europe, forecasts predict that the driver shortage will continue its negative trajectory heading into 2023.
Our teams will keep a close eye on the situation and are ready to procure additional landside transportation to combat disruption as necessary.
Also adding resilience to supply chains in Europe will be the development of the Cross Border Rail solution. Maersk is looking to expand the reach of the network and will focus on sustainable long-haul products for customers in the near-future.
For more information on inland services, click here.
E-Delivery Update
Although consumer confidence index is recovering slightly from September 2022 levels, uncertainty is still strong. Consumers are also rethinking their spending behaviours both due to cost pressure and sustainability reasons. As energy and food spending increases, two-thirds of consumers believe they will have less money to spend on Christmas this year compared with 2021 (Deloitte). It is interesting to note that 11% plan to purchase second hand or through reselling platforms.
With this in mind, some retailers are backing off from Black Friday extreme discounts and asking that consumers be conscious of their consumption, while others are looking for opportunities to improve their margin and are introducing charges for the returns of online purchases.
Next to focusing on improving margins, customers are also putting emphasis on maintaining a good consumer experience and being resilient in the face of unexpected circumstances. Employees of Royal Mail in the UK announced a strike action during Black Friday and Cyber Monday, though negotiations between the company and the union remain ongoing. Using a multi-carrier solution, such as the Maersk E-Delivery, can be a solution to sudden supply chain disruptions like this.
On a more positive note, Salesforce shopping index tracker showed that despite GMV (Gross Merchandise Value) having a -2% year-on-year growth globally, Spain and Eastern Europe continued their positive growth trends in Q3 2022 - at +2% and +6% respectively. This shows that even in the current market, there is opportunity for growth.
Maersk E-Delivery is keeping a close eye on the ever-changing developments across Europe and planning ahead where necessary to ensure lead times between 2-4 days for your cross-border deliveries. Head to the E-Delivery portal here.
Customs Update
Supply chain disruption and global uncertainties continue to affect our customers, making it necessary to re-assess logistics operations and find factors that increase predictability in the battle against potential future challenges.
Having an integrated approach to global customs will allow you to make informed decisions, leading to a new level of supply chain resilience. Ultimately, we are seeing customs strategies enable new market opportunities and re-imagine supply chain models to make businesses more resilient in the face of adversity.
In our virtual event on 22nd November, leading experts will share deeper insights on this and how to make customs a positive game-changer – turning customs handling into a strategic advantage. Follow this link to sign up for the free event.
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