Weekly Roundup – July 11, 2024

Welcome back to the weekly roundup, where we provide concise summaries of the most important supply chain and logistics stories of the week. Covering breaking news, emerging threats, and changing market dynamics, it contains all the news you need to maintain a competitive advantage.

Maersk warns of extreme weather delays along South African coast

A.P. Moller-Maersk A/S warned that extreme weather, including a storm surge and intense cold front bringing snow, is expected to cause shipping delays along the South African coast. The South African Weather Service forecasted damaging coastal winds, rains, and waves threatening infrastructure, with high-speed winds complicating navigation offshore. Increased vessel traffic, as ships avoid attacks in the Red Sea, has exacerbated the impact, with about 690 vessels currently around the Cape of Good Hope.

Maersk indicated that vessel movements and operations between Cape Town and Port Elizabeth will be most affected, causing expected delays. Additionally, South Africa’s state-owned logistics company, Transnet SOC Ltd., is struggling to improve port performance amid these conditions. The weather service predicted waves up to 10 meters, strong winds, and heavy rainfall through Monday.

TS Lines sails back into the transpacific trade, boosting SeaLead relaunch

Taiwanese regional carrier TS Lines will join SeaLead Shipping’s relaunched Asia-US West Coast (AWC) service, marking its return to long-haul trades. TS Lines will deploy two 2,900 TEU vessels, TS Melbourne and TS Tacoma, though their start dates are yet to be confirmed. TS Lines, founded by Chen Te-sheng, aims to list on the Hong Kong Stock Exchange and plans to re-enter long-haul lanes as freight rates rise. The company, primarily focused on intra-Asia routes, previously ventured into long-haul during the Covid boom but retreated when the market corrected.

To compete on long-haul routes, TS Lines has ordered two 14,000 TEU ships for delivery by 2027. Their re-entry coincides with mainline operators adding capacity to the US west coast, where spot rates have surged. MSC and Zim are also expanding their services to meet growing demand, with MSC reactivating its Mustang service and Zim launching its Central China Xpress (ZX2) service. Additionally, CMA CGM will start its TGX ad hoc Shanghai-Los Angeles shuttle to address peak season demand.

Container lines charter breakbulk tonnage, pushing up rates

Container carriers are chartering multipurpose vessels (MPVs) to handle increased global demand and disruptions in the Red Sea, reminiscent of strategies used during the COVID-19 pandemic. The Toepfer Multipurpose Index (TMI) for 12,500-dwt ships is rising, forecasted to reach $13,000 per day as container cargoes spill over into breakbulk ships. High port congestion and rising container rates are driving this trend. Container carriers are chartering larger MPVs at higher rates, impacting the breakbulk market. Although current rates are below pandemic levels, they remain higher than pre-pandemic. The Drewry MPV Index is also increasing, reflecting rising demand and tight capacity.

Sea-Intelligence sees growth in non-alliance services

Sea-Intelligence reported that the initial disruptions to global supply chains caused by the pandemic significantly impacted non-alliance services, leading many to halt operations on major East-West trade routes. However, the subsequent surge in demand for goods and rising spot rates prompted a substantial influx of non-alliance capacity into the market. This influx was notable even on the Asia-North Europe route, traditionally dominated by alliance-operated services, where several niche carriers entered the market.

Concern over rates peak and Hamas ceasefire ‘spooks’ container futures

Reports of ceasefire discussions between Israel and Hamas have caused container futures indices to drop. The China-North Europe container freight index futures, traded on the Shanghai International Energy Exchange, closed lower, with significant drops in December 2024 and February 2025 contracts. The futures market was concerned that freight rates have peaked amid Middle East ceasefire risks.

Hamas hinted at reconsidering a permanent ceasefire, which, along with attacks by Iran-backed Houthi rebels on Red Sea shipping, has disrupted Suez Canal transits. A ceasefire could stabilize these routes, normalizing the market and releasing excess capacity. Container shipping stocks were less affected, with Zim shares falling 15%, while other stocks saw minor declines. Despite concerns, freight rates are expected to remain elevated until the peak season ends in September.

UN Report Sees ‘Significant’ Changes in Global Goods Trade

Global trade in goods and services is recovering from last year’s slump, driven by economic strength in the US and solid exports from Asia’s developing nations, according to a UNCTAD report. The first half of the year saw a 2% increase, adding $250 billion in goods trade and $100 billion in services. The report highlights significant trade reallocations and increased supply concentration, with notable growth in electric vehicle trade rising by 50%. However, supply for battery value chains is becoming concentrated among a few major exporters. Looking ahead, UNCTAD anticipates more trade concentration, the formation of major trade blocs, and rising protectionism and costs.

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