The Weekly Roar
In this week’s Roar: hopes for a second-half rebound, solid vessel reliability, a mixed bag in air cargo, removing drayage emissions, and meeting ocean sustainability goals.
Looking at the current state of the economy, some things are trending positive for the second half of 2023. In fact, some feel that the only way is up. But a full supply chain recovery is still questionable. There were expectations that China’s reopening would unleash a tsunami of pent-up demand, but at this point, those hopes are fading. Add that to a glut of inventory that retailers can’t get rid of and weakening consumer demand, and any sustained import volume spike may have to wait until next year.
On a related note, the just-published latest Logistics Managers’ Index is at a new low.
Declining volumes might signal doom and gloom, but there is a silver lining. Vessel reliability was laughably bad not that long ago. However, a Sea-Intelligence Maritime Analysis shows that global schedule reliability is up 2.4% to 62.6%. This is a major improvement… 26.8% better when compared to March 2022. More consistent service performance has helped to stabilize global supply chains.
There’s some positive news in a recent air cargo analysis. Despite well-documented big drops in overall tonnage performance, there is some surprising growth in smaller shipments. An analysis done by WorldACD shows that shipments of 1000 kgs or less are up by 3% year-over-year. This doesn’t make up for the decline of larger shipments, but shows that it’s not all bad news for air carriers.
With the goal of reducing emissions, the California Air Resources Board (CARB) has introduced new regulations that will apply to local, state, and federal vehicles, plus any fleets of 50 or more that have annual revenues of at least $50M and operate at least one of those vehicles in the state. What this means to shipping is that drayage trucks have until January 1, 2024, to register any zero-emission vehicles with CARB. By 2035, all drayage trucks must be zero emission. With California often the leader in emissions regulations in the U.S., it’s possible similar guidelines will follow in other regions.
Ocean shipping continues to receive a lot of attention on the significant impact it has on the environment. This includes questions about how the IMO will meet its pledge to cut greenhouse gas emissions in half by 2050—from 2008 levels. This, when 90% of today’s containerships are still powered by heavy fuel. It will mean modifying existing diesel engines and introducing alternative propulsion methods. There are many options for alternative fuels that may become part of the solution.
For the rest of the week’s top shipping news, check out the article highlights below.