Freight Rates News

Freight and logistics trends that rate in the news

 

DECEMBER 2015

We summarize key monthly trends in six sections.

Prefer to find news yourself? Check out our roundup of nearly 100 digital logistics/supply chain sources.

1. SHORT TERM: HEALTHY START TO PEAK RETAIL SALES SEASON

The big retail sales season started better than expected, in the U.S. at least. The global peak sales season now starts even earlier with the Alibaba-nurtured Singles Day. It broke records in China and elsewhere in Asia. Other continents will follow.

2. MEDIUM TERM: CHINA’S BELT AND ROAD INITIATIVE

This initiative (to promote connectivity and cooperation amongst countries along land-based and maritime China-Europe routes, with benefits even spreading to other regions) is hot. In just one day (30 November) there were at least 13 articles breaking down what it means for for Serbia, Africa, North East Asia, and the whole world, with a variety of perspectives from the railway, maritime, political affairs, financial, capital and gadget press.

OUR TAKE    There is a lot more flexibility with parcel delivery, but some aspects of this change also applies to freight.

3. SPECIAL FEATURE: FIVE TRENDS TO SHAPE THE SHIPPING INDUSTRY

IHS recently released this intriguing, upbeat report. IHS Identifies Top Five Trends in 2016 That Will Shape the Global Maritime Industry for the Coming Decade. First up, no surprises, China slowdown and depressed commodity prices, then the lifting of sanctions on Iran. Here’s where it gets interesting – “Big Data – Less Drama” (new technology to provide better forecasts, better tracking and widespread adoption of analytics).

As forecasts become more accurate, shippers can run more productively, such as choosing ideal routes, operate efficiently by choosing best-price fuels, or become more competitive. For maritime investors, big data reduces risk exposure and extends visibility into business operations, encouraging further investment. 

Big data won’t end the industry’s cyclical nature or remove all the uncertainty that comes with geopolitical forces …. But it will allow players to look with more confidence into future events and act proactively.

Andrew Scorer, principal trade analyst at IHS Maritime & Trade

Last up is demographic change – a growing and more affluent middle class in emerging economies: not just in increasing import demand. Larger middle classes place more emphasis on efficiency, innovation, and have a more globalized outlook.

OUR TAKE    A tonic for the (following) Carriers & Cargo section. We are also impressed by the report’s approach.

“Shipping is a servant of trade, and trade is driven by consumer behaviour, so understanding how economies develop, evolve and plan for change brings valuable insight of what the maritime sector will look like over the coming decade. This insight is much more instructive than studying changes in ships and related systems.

Richard Clayton, chief analyst of IHS Maritime & Trade

4. CARRIER & CARGO: CHOPPY SEAS AHEAD FOR CARRIERS

This Daily Telegraph article really summed up the plethora of problems facing ocean carriers. Overcapacity has been caused by a spending spree on new ships and from the slowdown in global trade. Overcapacity has plunged freight rates, profit, and prompted mergers. Cutting capacity hasn’t worked. Carriers seemingly can’t win a trick – its even a bad time to sell for scrap. Consequently more ships are now idle.

OUR TAKE    Dropping global trade forecasts and scrap metal prices are beyond the industries control. Not so for the spending spree on new ships; orders this year beat new UN regulations. How many carriers will succumb to the stormy seas, and not get through to the smooth sailing as promised in the IHS report above?

5. INNOVATION: AMAZING STORIES

Every month delivers at least a few amazing innovation stories. Last month Walmart tested drones for last mile delivery and robots started street deliveries.  Now, responding to a shortage of bricklayers in Australia, robots are building houses. But the most amazing story was that Amazon, renown for ecommerce prowess, unveiled and opened a real store.

OUR TAKE    Until now, the freight industry has lagged behind others in taking advantage of, and adapting to new technology, as summed up last month by this American Shipper article. As a disrupter to the industry, we watch out not only for innovations likely to be taken up by the freight sector, but also how innovation plays out in changing other verticals.

6. FREIGHTOS FOCUS: THANKSGIVING

We researched Thanksgiving and the role freight shipping plays in holiday shipping, especially Black Friday. First a few surprises when we broke down the the holiday’s traditions and history. Then again surprises breaking down the role of freight on Thanksgiving –  one each historical, specific for this year, and for the future (how it is influencing a current trend).

READ THE FULL REPORT

❤ OUR FAVOURITE: ROBOT DELIVERY

A great way to close Freight Rates News! Already covered (Innovation section) but we wanted more. The Starship Technology delivery robot won’t be delivering a pallet load any time soon, but it doesn’t it get you thinking?

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