Supply Chain Industry Insights
Welcome to the PGL Industry Insights report for March, 2023.
We in the global logistics industry continue to live in interesting times as the near-future outlook for international shipping provides both hopeful and pessimistic potential outcomes.
One major concern for tans-Pacific ocean carriers exists in the acceleration of blank sailings to prevent container spot rates from falling further, while the industry braces itself for an unprecendented influx of new container ships that will be entering service with a surge in deliveries in the second quarter of this year and continuing throughout 2024 and 2025. This fleet expansion threatens to increase capacity concerns moving forward.
Due to increased capacity and a favorable outlook in future activity later in the year, there are concerns that fixed rate trans-Pacific contracts may not hold up to in-the-moment pricing. This could leave lower-bidding, pre-existing contracted cargo left behind on the docks at the first sign of tightening capacity. We’ll continue to monitor the situation.
It’s not all doom and gloom, however, as several reports are pointing toward recovery.
February data points to overall market improvement in terms of seasonality and a better-than-expected rebound after China abandoned it’s Zero-Covid policy leading to stabilizing production conditions.
The world’s largest ocean freight line, Mediterranean Shipping Company is seeing positive signals for trade demand as the U.S. and Europe make positive strides in curbing inflation and China is poised for recovery.
Despite decreases in both imports and exports, Vietnam still enjoyed a trade surplus of $3.6 billion in the first month of 2023 and ties between American companies and manufacturers in India deepen.
No one knows for sure how these factors will stack up in the long run, but we will have our finger on the pulse of the industry, and we’ll keep you posted. In the meantime, PGL will continue doing what we do best, delivering peace of mind, 24/7/365.
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