Published 30 Jun 2023

Logistics News - Market Update June 2023

The logistics, freight forwarding and logistics service provider industry saw some significant developments in June 2023.

TL;DR: The logistics, freight forwarding and logistics service provider industry saw some significant developments in June 2023, such as:

  • MSC has widened the gap to the second-ranked Maersk to more than 800,000 TEU in little over a year.
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  • West Coast dockworkers and employers reach labor deal after long talks.
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  • ILWU and PMA agree on labor terms for West Coast dockworkers.
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  • The delivery of 4.9 million TEU in new-build vessel capacity and the slowdown of Europe's GDP, which affected the global shipping lines and their rates and capacity.
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  • The increase of passenger services in some airfreight trade-lanes, which lowered the yields below 2019 levels.
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  • The recalibration of hauliers' route networks, to cope with the driver shortage and the high freight rates in Europe's road transport sector.
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  • The partnership between Aramex Malaysia and Global SystĂ©mes Asia, to accelerate logistics expansion in Asia-Pacific.
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For more details, read the full article below.

Monthly Milestones

The logistics, freight forwarding and logistics service provider industry is constantly evolving and facing new challenges and opportunities. Here are some of the highlights from June 2023 that you should know about.

  • MSC first carrier to reach a fleet size of five million TEU slots. The Mediterranean Shipping Company (MSC) has been the biggest container line in terms of slot capacity, and with the addition of new vessels, MSC has widened the gap to the second-ranked Maersk by more than 800,000 TEU. MSC has achieved this milestone by adding the MSC GEMMA (24,116 TEU) to its fleet that was delivered on May 22, 2023. MSC is expected to grow its fleet to more than six million TEU by the end of 2024, when its vessel sharing agreement with Maersk is set to expire. MSC's growth reflects its ambition to operate a standalone network with a global reach, while maintaining selected partnerships on some trades (DHL, 2023).
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  • ILWU and PMA reach a tentative labor agreement. The International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) have finally reached a tentative labor agreement after more than a year of negotiations. The agreement covers more than 20,000 dockworkers at 29 West Coast ports and aims to prevent disruptions and delays that have plagued the supply chain in the past. The details of the agreement have not been disclosed yet, but it is expected to address issues such as automation, health care, pensions, wages, and work rules (UPS, 2023).
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  • Flexport hires former Amazon logistics executive Dave Clark as CEO. Flexport, a digital freight forwarder and logistics platform, has announced that Dave Clark will join the company as its new CEO, effective July 1, 2023. Clark was previously the senior vice president of worldwide operations at Amazon, where he oversaw the e-commerce giant's fulfillment, transportation, delivery, and customer service operations. Clark will replace Ryan Petersen, who will remain as Flexport's founder and executive chairman. Clark's appointment signals Flexport's ambition to build a global distribution network and compete with traditional freight forwarders and logistics providers (WSJ, 2023).

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Sea freight

According to the latest market report by Noatum Logistics, a leading global logistics provider, the sea freight market faced some challenges in June 2023, as the delivery of 4.9 million TEU in new-build vessel capacity from 2023 to 2024 and the slowdown of Europe's GDP to 0.7%, which constrained consumer demand, put pressure on the global shipping lines to manage their capacity and rates (Noatum Logistics, 2023).

The report also stated that rates sank to pre-pandemic levels and more blanked sailings were announced, as carriers tried to balance supply and demand. The report also highlighted some regional trends, such as the congestion in US ports, the strong demand in Asia-Europe trade, and the impact of Brexit on UK-EU trade (Noatum Logistics, 2023).

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Air freight

The air freight market also saw some changes in June 2023, as many trade-lanes experienced lower yields than 2019 levels, due to the increase of passenger services that added more belly-hold capacity (Noatum Logistics, 2023).

The report by Noatum Logistics noted that transatlantic trade was particularly affected by this trend, as well as parts of South-east Asia, where passenger services increased substantially. However, China and Hong Kong PAX services were growing more slowly, due to travel restrictions and COVID-19 variants (Noatum Logistics, 2023).

The report also mentioned some positive signs for air freight demand, such as the recovery of automotive and industrial sectors, the growth of e-commerce and pharmaceuticals, and the launch of new routes and services by airlines and freight forwarders (Noatum Logistics, 2023).

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Road Transport

The road transport sector in Europe faced some difficulties in June 2023, as the driver shortage continued to worsen and freight rates remained elevated (Noatum Logistics, 2023).

The report by Noatum Logistics suggested that hauliers needed to recalibrate their route networks, to alleviate the strain on the sector and to optimize their operations. The report also pointed out some factors that contributed to the driver shortage, such as the aging workforce, the lack of training and recruitment, the Brexit-related regulations and paperwork, and the low attractiveness of the profession (Noatum Logistics, 2023).

The report also indicated some solutions that could help address the issue, such as increasing wages and benefits for drivers, investing in technology and automation, improving working conditions and safety standards, and promoting diversity and inclusion in the sector (Noatum Logistics, 2023).

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Logistics expansion

In June 2023, Aramex Malaysia, a leading global provider of comprehensive logistics and transportation solutions; and Global Systémes Asia (GSA), one of Malaysia's leading integrated logistics service providers; signed a memorandum of understanding (MoU) to accelerate logistics expansion in Asia-Pacific (GlobeNewswire, 2023).

According to a press release by GlobeNewswire, a global news distribution platform, the MoU aimed to leverage both parties' expertise and capabilities in logistics solutions, such as warehousing, distribution, e-commerce fulfillment, cross-border solutions, customs clearance, last-mile delivery, and reverse logistics (GlobeNewswire, 2023).

The press release also stated that the partnership would enable both companies to expand their customer base and market share in Asia-Pacific, especially in Malaysia, Singapore, Indonesia, Thailand, Vietnam, Cambodia, Laos, Myanmar, Brunei Darussalam and Philippines (GlobeNewswire,2023).

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These are some of the major news stories that have shaped the logistics, freight forwarding and logistics service provider industry in June 2023. For more information and updates, please visit the following links in the bibliography:

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Bibliography

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