Weekly Roundup – June 27, 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.

The shipping industry is sounding the alarm as another vessel sinks in the Red Sea

Leading shipping groups have called on influential governments to halt Houthi attacks on vessels in the Red Sea following the sinking of a second freighter this week. These attacks have resulted in the deaths of at least three seafarers, with another likely from the latest incident involving the Greek-owned MV Tutor. The disruptions to one of the world’s major trade routes have forced ships to take longer routes around Africa, driving up shipping costs and causing port congestion in Asia and Europe.

The Iranian-aligned Houthi rebels have targeted vessels since November, claiming retaliation for Israel’s actions in Gaza. The situation has escalated shipping costs significantly, with rates for major routes rising by 233% over the past year. The shipping groups condemned the attacks and urged immediate action to protect seafarers and de-escalate the conflict in the Red Sea.

Port of Nevada opens inland intermodal yard

The Port of Nevada and Union Pacific have launched an intermodal service connecting Fernley, Nevada, to the Port of Oakland, aiming to ease truck traffic, reduce emissions, and enhance container distribution. This service, managed by logistics provider CMA CGM, offers bulk commodity and intermodal transloading and storage. Nevada officials hope it will attract advanced manufacturing businesses to the state, which is investing in EV battery production, including projects by Lithium Americas and Tesla. As a designated Tech Hub, Nevada is positioned to support expanding manufacturing companies.

Early peak shipping season shows no sign of slowing: Yang Ming CFO

Yang Ming Marine Transport reported strong early peak season volumes for the third quarter, surpassing last year’s demand from US and European consumers. Despite this, the company remains cautious about the latter half of 2024 due to global geopolitical uncertainties. Revenues have increased by 27% to $2.3 billion in the first five months of the year, following a significant rise in net profit. However, ongoing vessel diversions around the Cape of Good Hope to avoid Red Sea conflicts have caused logistical disruptions, requiring additional vessels and leading to increased freight rates. This situation has resulted in port congestion and skipped vessel calls, especially in Southeast Asia.

Carriers halt India bookings to Europe, US amid capacity crunch: forwarders

Indian shippers and freight forwarders are facing significant capacity issues for trades to Europe and the US, with spot bookings largely unavailable for July due to schedule disruptions and congestion. High demand, particularly for North Europe and US West Coast routes, has led carriers to pause new bookings until late July. The situation is worsened by transshipping of lucrative China-origin cargo via Indian ports, reducing space for local shipments. As rates rise, shippers may need to pay premiums or seek alternatives. Additional carrier surcharges, such as overweight fees from Maersk, MSC, and CMA CGM, are further increasing costs for Indian exporters.

US imports still rising – ‘strongest performance since the pandemic’

US container import volumes in May showed strong growth, increasing by 5.6% year-on-year, according to shipping analyst John McCown. Although this growth was less than the previous months, it marked the highest US import volume in 21 months, with 1.93 million TEU processed. This surge follows 15 months of declines due to pandemic-related volume spikes. Notably, East Coast ports saw an 11.8% rise in imports, outperforming the flat performance of West Coast ports. US exports also rose by 4.9% year-on-year, highlighting a significant trade imbalance favoring imports.

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