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Writer's pictureBianca Flint
Feb 55 min read

2024 - The Year We Catch a Break?



 

Good Afternoon All,


Happy Monday.


We are back, and it's 2024!


We hope you all had a lovely festive season and that the start of 2024 has been exciting and prosperous.


Grab your coffee, tea, or water (Steve is doing water only in February), and let's get stuck in, as we have a lot to cover.

 

Markets:


In the last few weeks, we have experienced increased conflict in the Middle East, cyber-attacks, inflationary pressures, and industrial action at Australian ports. 2024 started with a bang!


United States:


This week Tesla has announced the expansion of its gigafactory in Sparks, Nevada USA. The plan is to manufacture lithium iron phosphate (LFP) cells onshore, in an effort to reduce the risk of supply chain delays.


The US announced a key agreement on supply chain resilience has been signed under the Indo-Pacific economic framework involving 14 partner nations, including India, Japan and Australia. This agreement will come into effect 24/02/2024, with the aim of building, "...resilient, efficient, productive, sustainable, transparent, diversified, secure, fair, and inclusive supply chains...".


Quick summary of the US port volumes in December:


Houston up by 11% YOY, Seatlle & Tacoma up 10% YOY, Virginia down 2% YOY, Oakland up 8% YOY, Long beach increased by 30% YOY, Los Angeles up 2% YOY.

Data sourced from SupplyChain Dive.


We are still seeing mass job cuts within the US supply chain and logistics fields, with Flexport, a US-based freight agency, trimming 15% of its workforce. UPS has reported that it will be cutting a further 12000 jobs in 2024 due to a weakening market and reform within their business model. Penkse Logistics has also filed documents stating it intends to cut 200 truck and warehouse workers. It's going to be interesting times, watching how companies within the supply chain cope with the competitive yet falling market.


China:


China is making moves in the automation space, with the opening of a completely independent intelligent port management and control system facility, which opened at the end of December 2023 in the new third phase of the Qingdao Port’s Qianwan Container Terminal. This is the first Chinese fully automated port container terminal, with 27 other ports under construction or renovation to enhance automation capabilities.


Chinese New Year is just around the corner. The national holiday starts on February 10th and ends on February 24th. It is common for suppliers and factories to close early, and this year we have been advised this will be a more common occurrence due to severe snowstorms and heavy rainfall, which is predicted to affect much of the country, making it a challenge for people to travel back to their families for the holiday period.


Due to the Red Sea crisis, fuel costs in the Asian markets have shot up close to a reported 50%. This tends to have a flow-on effect on freight pricing; however, rates are holding steady for the month at this stage.


The General Administrator of Customs of the People's Republic of China has released the statistical data for China's Total Export & Import Values as of December 2023 (in USD).


(1) China's Total Export & Import Values, December 2023 (in USD) - Unit: USD 100 Million


Item 12 1-to-12 12 1-to-12

Month-on-Month ±% Year-on-Year ±% Year-on-Year ±%

Total Import 2,282.8 25,568.0 2.2 0.2 -5.5


This is supported by data from the China Federation of Logistics and Purchasing, which showed the average prosperity index increasing 3.2 percentage points from 2022. China's road logistics price index edged up 0.03 percent week-on-week from January 29th to February 2nd.


COSCO is expected to re-start its Australian West Coast service after Chinese New Year. The line canceled this service last year due to the MUA and extensive backlogs. Currently, the more reliable and stable shipping lines servicing the CN-AU trade lanes are Maersk, MSC, One & COSCO.


Australia Domestic:


I can't believe I am typing this! DP World has reached an “in-principle” four-year agreement with the maritime union. The MUA action started in September 2023 and has cost the economy millions of dollars and caused chaos in the supply chain industry. We finally see a resolution to the conflict due to the intervention of the Fair Work Commission.


We are still not out of troubled waters, with thousands of containers backlogged, vessels sitting off ports to be processed, and the timely announcement of increased terminal fees. However, this is a very positive note to start 2024 on.


We are seeing reports of empty parks being at capacity, which is a flow-on effect from the MUA. We are working closely with the lines and our transport operators to mitigate the inconvenience, and we appreciate your patience and understanding.


Global:


The Panama Canal Authority (PCA) has increased its vessel allowance to 24 vessels a day in the month of January, due to the wet season increasing the water levels, however, it is expected to be decreased again in February as the rains stop.


The Rea Sea is still struggling with attacks by Houthi rebels causing major delays and cost implications as shipping lines struggle to increase security and think outside the box with their routings and sailings options. The US & UK have increased their strikes in Yemen which experts have stated are assisting to lessen the attacks on sea vessel, however, there are still major congestion issues as ship divert away from the Suez Canal.


There are predications of a shift to move cargo to air and sea-air logistics, which has been evident in the pricing increases and demand for airfreight services. We are currently experiencing slight delays in obtaining spacing in the airfreight consoles; however, this is the better option vs the 8-12 week transit from Chinese mainland for LCL cargo.


Freight Data - Sourced from Freightos - Week 31/01:


Ocean rates - Freightos Baltic Index:

Asia-US West Coast prices (FBX01 Weekly) increased 38% to $4,099/FEU.

Asia-US East Coast prices (FBX03 Weekly) climbed 21% to $6,152/FEU.

Asia-North Europe prices (FBX11 Weekly) fell 1% to $5,456/FEU.

Asia-Mediterranean prices (FBX13 Weekly) fell 5% to $6,449/FEU.


Air rates - Freightos Air index:

China - N. America weekly prices increased 11% to $5.33/kg.

China - N. Europe weekly prices fell 5% to $3.16/kg.

N. Europe - N. America weekly prices increased 2% to $1.98/kg.

 

News Articles:


 

OSCL News:


We had an amazing time over the festive season in Perth with our family & thank you to all our amazing clients who wished OSCL & myself a happy birthday - another year bites the dust.


It has been a massive start to 2024 for the OSCL team. We are excited to announce our Women's International Shipping & Trading Association (WISTA) Australia membership. I am very humbled to have been accepted as a Canberra Woman in Business committee member following our award win last year.


We are prepping for Stage 2 of ISO 9001, planning the already chockers calendar, and hopefully, starting our Trusted Trader application.


Did you know we are on social media? We would love it if you could give our socials a like and follow. We post weekly content that you may enjoy and find handy - find us here: https://www.instagram.com/onesource_customs?igsh=MTluZGJzZXdsODh2Zg%3D%3D&utm_source=qr


If you have a spare moment and would like to support us further, we would appreciate it if you could leave us a Google review - https://g.page/r/Cb3A9Nu3n5zMEAg/review


Thank you again for your support in 2023.


We are very much looking forward to supporting you in 2024.


All the best,

Steve & Bianca







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