Key Ports Update
European Hubs and terminals have seen a good operational outcome in the last month, with solid volume delivery in the South, and a slight drop in the Atlantic coast. Hubs in Mediterranean are seeing higher cargo volumes as service reliability recovers. In Tangier, terminal expansion with extra yard space and Gantry Cranes is now operational, enabling extra capacity and capability to the West Mediterranean Hubs.
In North Europe, terminal congestion in Gdansk is causing a ripple effect on service reliability of other terminals, as cargo is redirected to other ports to alleviate the pressure on the congested terminal. Our teams continue to monitor the situation and make decisions in the interest of reducing delays for our customers and safeguarding the flow of cargo. To help alleviate the pressure, customers are kindly asked to please pick up containers as soon as possible after discharge.
Due to disruptions and changing market demands, our teams in Bremerhaven and Port Said are seeing an increased demand for value added services. Find out how these services, such as Flex Hub, can benefit supply chains by accelerating, pausing, or diverting cargo.
In the coming months, our teams are expecting to continue seeing high volumes to the South European terminals due to phase-in and phase-out of vessels and inducement calls. Following Golden Week blanking plan, we expect to see a network recovery in November. As we enter the winter months, Europe could face adverse weather conditions as is common at this time of the year. Our teams continuously monitor the developing weather conditions and act in an effort to minimise disruptions for our customers, while acting in the interest of safety. Find out the latest updates on the impact of weather on our operations in Europe.
Global businesses involved in production and manufacturing frequently rely on the Producer Price Index (PPI) as a tool for monitoring price changes in goods manufactured by comparing current-month prices to those from the same month in the previous year, providing a clear snapshot of pricing trends within the industrial sector. As such, the PPI is an indicator of inflation and could impact sourcing decisions.
The latest China Producer Price Index (CPPI) stands at 97,5, meaning manufacturers and producers could see lower costs, which could also mean lower consumer prices and consequently an incentive for consumption. With PPI being an aggregator, the same opportunities will be true for all industries with production in China and Far East Asia. Looking at the latest SeaIntel data, the near-shoring trend of European businesses may have been short lived, as the average distance per TEU shipped into the continent has been gradually increasing over the past year.
These factors, combined with the 26-year record low of the Global Supply Chain Pressure Index, play into trade lanes between Asia and Europe returning to pre-pandemic levels. While some concern around the EU economies remains, sourcing patterns seem to be trending towards normalisation and stabilisation.
Opportunities to source at cheaper prices from Far East Asia, combined with the upcoming peak ahead of the Chinese New Year, might result in an imbalance of supply and demand in the coming months. Businesses in Europe with production in Far East Asia will need to plan and place orders in advance, as well as negotiate the 2024 contracts, to ensure their supply chain flows without disruptions.
Air Freight Update
Maersk air freight operations in Israel are continuing to be monitored by our teams, but at this time we are not seeing a significant impact to our customer offering. Although a number of airlines have cancelled flights to and from Tel Aviv, a lot of our partner carriers are continuing to use the airport and cater to air freight demand.
However, we are unable to charter our own tailored flights for customers to and from Israel given the ongoing situation until further notice. To stay up to date with the latest information, please head to our dedicated advisory page.
Elsewhere, we are seeing increased demand for Europe to Asia services, including Maersk’s own controlled flights from Billund, Denmark, to Hangzhou, China. The service uses secondary airports for enhanced control, reliability, and ultimately resilience in the face of an uncertain market.
At Billund, for example, unloading is performed within just two hours from landing – enabling cargo to continue on its journey as soon as possible. Click here for more information.
In this current climate, speed, efficiency and reliability continue to be of paramount importance within air freight. Hear more on this and further details on Maersk’s ambitious air freight expansion in the first part of our series ‘Air Is Essential’ here.
In the north part of the continent, Poland Baltic Hub is currently facing limitations in available windows for rail freight. The limitation is expected to last until 13 November, with the number of available rail windows decreasing by 40%. To cope with the limited capacity on rail, there is an increased demand for trucking services, which are also operating with limited slots available. As a result, there are possible delays in deliveries, as slots can only be booked once cargo has cleared all customs and carrier stops. To find out more and read the latest update, click here.
In South West Europe, the different railway gauges of Spain, Portugal and the rest of the region historically meant that trains operating between Spain and France had to stop at the border to change the locomotive or replace wheel sets to continue their journey. While the line with standard gauge connecting Barcelona and France, opened some ten years ago, Maersk’s new rail service is the first one in the market using fully interoperable locomotive that does not require a change in Perpignan. Previously, customers in the South of France had the following options as destinations for their ocean cargo – either shipping to French ports or other destinations in Northern Europe.
With Maersk’s new rail offering from Barcelona to Toulouse and Lyon, the Port of Barcelona with its direct port calls can serve as a gateway for customers in the South of France. With direct ocean and block train connections, customers can cut their transit times from 4 to up to 13 days for cargo originating in certain Asian ports, and ensure their goods are available for distribution and sale at the right time. The electrified rail connection, combined with shorter distances for ocean transport, can lower our customers’ emissions and increase the reliability and resilience of their supply chains.
In light of the ongoing situation in Israel, our teams continue to monitor the situation and ensure the safety of our employees and the fluidity of our customers’ supply chains. At this time, our services remain operational and bookings to and from Israel continue to be accepted and facilitated. To find out the latest updates and support packages, please visit our dedicated advisory page.
From 1 December 2023, new regulations for Import Control System 2 (ICS2) will come into affect and you may need to take steps to ensure your compliance. Businesses must take part in self-conformance testing to ensure their systems are ready to send and receive technical messages.
If you’re already connected to ICS2, you only need to test the new business processes for the third release. If you’re new to ICS2, you must test all core processes. Our team of customs experts are here to help should you need it, so please don’t hesitate to reach out to your Maersk representative for guidance. More information from the European Commission can also be found here.
Elsewhere, the EU and Japan initiated talks in October 2022 to include cross-border data flow rules in the EU-Japan Economic Partnership Agreement (EPA), aligning with the EU's commitment to modern digital trade regulations. Now, a landmark deal has been made, easing online business, promoting digital trade, and enabling cross-border data flow.
The agreement benefits companies across sectors like finance, transport, machinery, and e-commerce, streamlining data handling, offering a stable legal environment, and, crucially, eliminating costly data storage requirements. This will ensure companies are not required to physically store their data locally, reducing expenses and security risks.
The data economy is booming in the EU (and set to triple by 2025) reaching 5.8% of EU GDP, and this deal is a major step to drive digital economy growth, ensuring the free, trusted flow of data and setting high global standards for future economic and societal development. if you need help with trade and compliance, Maersk Customs Services offers several services. Click here for more information.
The EU-New Zealand trade agreement and the EU-UK Trade and Cooperation Agreement both include similar rules. The EU is also engaging in similar discussions with Singapore and South Korea for future deals.
European consumers pushed online sales up 9% in the third quarter – an increase compared to last year, where majority of European countries indicated negative growth, reports Salesforce Shopping Index. While some of the increase can be attributed to increased prices, the report expects spending to pick up further as we enter the big ecommerce events of the month. For instance, the report expects 25% of all holiday digital sales to take place during Cyber Week.
The total expected rise in sales during Cyber Week might not be despite, but because of inflationary pressure felt by shoppers across the continent. In the UK, 41% of consumers cite inflation as the main reason to shop during seasonal sales, and an overwhelming 95% say inflation will impact their spending in the holiday period. At the same time, the German parcel industry Is expected to see a 2% decrease in shipments in November and December compared to last year, further underlining cautious consumption as a result of inflation. On the brands’ side, 74% of businesses plan to increase their marketing spend and product offering in this period, with many already advertising “pre-Black Friday” and “early access” sales.
The combination of making use of seasonal sales and more diligent spending habits will likely lead to an increase in returns. Businesses will need to once again evaluate their return policies – while some are increasing return fees, others are raising the minimum spend threshold for a free return. Find out how the right return policy can help optimise your supply chain.
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