In this week’s Roar: the latest on COVID and China, Maersk’s view on the ocean markets, a stumble by blockchain in the supply chain, resolution preventing a US rail strike (and one side is NOT happy), and the lasting impact of the UK port strikes.
It’s been a tough week for China, and while there may be some very good news on the horizon, it seems it may be too late to avert the damage done by their zero-COVID policies. The good news is that authorities could start releasing restrictions in March. However…
The people of China are protesting that they’ve had enough. And the industry may be signaling that it’s had enough too. In fact, the whole economic community is feeling less than positive when it comes to China. Factories there are still operating, so to some extent at least, it’s business as usual—for now. But many are reassessing China’s place in their supply chains.
And while Chinese export markets may be showing signs of a slight recovery right now, there’s little expectation of things returning to what they were in the past. In fact, Maersk and the like continue to reduce capacity, saying they are “adjusting our network to match the new reality.”
Speaking of Maersk, they had partnered with IBM on the TradeLens project, a platform that would allow all in the industry to share and analyze data and documents. Maybe the project is ahead of its time. Due to a lack of support and collaboration, development on the TradeLens platform has stopped, and it will go offline by the end of March 2023. Too little support, and now it’s too late.
The chart on the right provides some perspective on the role that rail plays in the US freight market. after three years of failed negotiations, President Biden has imposed the contract agreement brokered by his administration back in September, a deal that gives workers a 24% raise over five years, caps on health care premiums, and one additional personal day, but no paid sick days. Four of the 12 freight rail unions, collectively representing more than half of the 115,000 freight rail workers covered by the deal, had voted down the agreement, citing the lack of paid sick days as a primary reason.
And finally, how have recent strikes changed things at UK ports? The Port of Felixstowe, once the busiest container port in the UK, has seen a huge decline in the number of ships arriving—whether for exports, imports, or transshipment stops. Both Felixstowe and the Port of Liverpool have suffered as shippers avoided these stops in favor of other ports thanks to labor issues. As of October 24, the Port of Liverpool was down in arrivals by 92% week-over-week, and by the time the Port of Liverpool started its second strike at the end of September, they were down 65% week-over-week.
For the rest of the week’s top shipping news, check out the article highlights below.