The analytics firm Everstream released a risk report in April related to sourcing from Chinese suppliers. According to the report, they’ve applied a 90% risk score to the supply chain because of the continuing potential for delays and cancellations — mainly because of ongoing localized outbreaks of COVID-19 across the country.
However, the report didn’t focus solely on China. They indicated several risk factors here at home, such as cybercrime, financial insolvencies, and ever-increasing commodity prices from Europe.
Speaking of Europe, their service sector is booming. In fact, they’re experiencing their biggest rebound since 2009. Unfortunately, that’s being served up with a side dish that isn’t so appealing. Specifically, the manufacturing sector continues to decline.
Europe continues to struggle with what’s happening in the ocean market overall, ongoing strikes throughout the first quarter, depots that are still overloaded, low freight rates, and like everywhere else, reduced demand for goods.
The good news is, at the end of the day, Europe believes they’ll see an overall if slight, gain.
There’s some good news in the ocean cargo sector. It comes on the back of a mountain of negative data, but it is good news regardless.
Declining volumes, thanks, in part, to a weak economy, is the mountain of negative data. Put those declining volumes have made it possible for container ships to improve their on-time performance globally.
Not that long ago, vessel reliability was astonishingly bad, but a new Sea-Intelligence Maritime Analysis shows that reliability is up 2.4% to 62.6%. That’s 26.8% better than what it was back in March 2022.
While we can’t say that the end of the Maersk and MSC’s 2M alliance relationship will get ugly, it is safe to say that breakups often are. With that in mind, it seems other alliances are gearing up to take advantage of that possibility.
Although shipping lines had a better-than-expected first quarter, there will be challenges to just breaking even in the next several quarters. And while Maersk isn’t saying much about its future capacity management plans, other carriers are looking at slow-streaming and maximizing utilization however they can. Additionally, members of Ocean and THEA have already announced upgrades to their networks.
Finally, in air cargo, hopes for a recovery have been pushed back to the fall. A new report from CLIVE Data Services provides a solid reason. The increased amount of capacity expected over the summer paired with a -4% drop in demand in April.
Data shows a drop of $2.29 for April in the air freight spot rate on the Europe to North America lane thanks to a North Atlantic load factor decrease of 10%, which is a drop from 67% in March to 57% in April.