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Hapag-Lloyd CEO is Bullish on the Second Half of 2024

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Global Logistics, Global Trade Daily

Hapag-Lloyd CEO is Bullish on the Second Half of 2024

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Many continue to be bearish in 2024, but Hapag-Lloyd CEO Rolf Habben Jansen is bullish on demand in the second half of the year. In an interview with CNBC, Jansen notes that inventories are depleted and the recovery post-Chinese New Year, February 10th, has been positive. 

Hapag-Lloyd reported a significant drop in 2023 net profit. Shipping rates were at untenable levels during the last quarter of 2023, and the Red Sea crisis further exacerbated the entire industry. Trade continues to be diverted, and while rates are beginning to decline, Asia to West Coast port rates are up 155% year-to-date, and Asia to East Coast ports have increased 129% year-to-date.

Another issue Jansen touched on was the increase in carbon dioxide emissions as a result of Red Sea diversions. Hapag-Lloyd is aiming for net-zero carbon by 2045, but according to Sea-Intelligence, diversions will likely increase emissions by 260% – 354%. The industry at large has added nearly 5% in vessel capacity to neutralize delays, and sailing faster has also augmented capacity by an additional 8% – 10%. 

A big reason, however, why Jansen remains bullish is the new alliance Hapag-Lloyd has formed with Maersk. The two shipping giants announced the Gemini alliance earlier this year and once in place, the alliance is slated to achieve greater than 90% of schedule reliability. Compared with global reliability in the 51.6% range, the upgrade would be a noteworthy improvement. 

Jansen explained that the alliance rests on the use of a spoke and hub system. Common in the larger transportation sector, the spoke and hub system is a distribution network akin to a bicycle wheel. The hub rests in the middle, and the spokes are the carriers (trucks, planes, or ships). The network is more elastic than traditional end-to-end networks, and Hapag-Lloyd and Maersk believe this model will propel them to 90% schedule reliability. 

Speaking of reliability, the 2M alliance between Maersk and MSC will be discontinued in 2025, according to Maersk. Reliability was a driving factor in Maersk seeking out Hapag-Lloyd as a partner, where the efficient turning of containers ensures freight is moved in the most systematic manner possible. Delayed shipments slow the process, whereas increased efficiency would result in appreciable container utilization.

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Global Trade Daily, International Trade

Red Sea Global Trade Disruptions: How to Overcome the Chaos

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Global trade has faced many recent disruptions lately due to chaos in the Red Sea, which started as a result of the attacks in Gaza. According to the Council on Foreign Relations, about 6% of global trade and 40% of U.S. container ships traverse the Panama Canal yearly. Per the U.S. Naval Institute, 12% of global trade travels the Suez Canal.

The Houthis, a religious movement, began carrying out attacks on cargo ships traveling through the Red Sea and the Suez Canal in November 2023. Vessels are avoiding these attacks in the vital waterway by sailing around Africa, adding time and cost to the trip. 

Perishable items are shipped in containers, but some items are switched to bulk carriers, which may make these items harder to handle at ports. Plus, container prices have risen by 25% or more. Perishable items have a limited life, so the lengthier shipping times can ruin them and make them unsellable. 

Ocean shipping rates are going up, and several carriers have added surcharges. Shipments are delayed, meaning orders may be canceled as customers become unhappy with shipping times. 

The Panama Canal, which could have been an alternative to the Suez Canal, is also experiencing cargo diversions because of the lack of rain, making the canal too shallow for large ocean liners. Authorities expect the canal will limit capacity to 18 slots per day, down from the pre-drought capacity of 30 ships. 

Significant challenges for international trade include: 

  • Restricted bookings on westbound routes have triggered a surge in freight rates, affecting regions in the Middle East, the Red Sea, North Africa, Europe, the East, the Black Sea, and the West.
  • Freight rates have seen a significant spike, with Asia-Europe rates surging 173%, exceeding $4,000/FEU compared to pre-diversion levels. Asia-Mediterranean prices have doubled, exceeding $5,000/FEU.
  • Carriers have introduced surcharges ranging from $500 to $2,700 per container, further driving prices higher. The FMC granted permissions for carriers to circumvent the 30-day notice for increasing rates, allowing them to bill surcharges immediately. 
  • Disruptions in one region can influence distant markets. Several EU-based auto plants have announced temporary production shutdowns due to delays in obtaining parts from Asia. 
  • Due to Panama Canal congestion, a route initially diverted to the Suez Canal will go towards the Cape of Good Hope, adding ten to fourteen days to the journey and extra costs. Shippers now face a dilemma between bypassing the Cape of Good Hope or returning to the Panama Canal with potential queuing delays.
  • Sea-Intelligence estimates a 5.1%-6% reduction in global shipping capacity, equivalent to 1.45-1.7 million TEU.
  • Companies may need to increase ship numbers on each route to maintain schedules.
  • The crisis prompts strategic reshuffling, reminiscent of past trends redirecting ships from European to U.S. routes during surges in freight prices.
  • The crisis could extend into the second half of 2024. The longer the war in Gaza lasts, the more extended shipping disruptions caused by missile attacks in the Red Sea will continue. 
  • Retailers that rely on sea freight could be more affected by the Red Sea disruption than those that source closer to home. Retailers may see longer lead times for specific products as the Red Sea situation continues. 

How to make global shipments happen

Shippers need to find alternative routes to make sure shipments happen. Routes bypassing the Red Sea might be longer but would avoid the crisis zone. Shippers must implement enhanced security measures for vessels, such as hiring private security firms or coordinating with naval forces for escorts. 

Shippers must be flexible as they navigate higher costs, longer transit times, and economic volatility. When risks like this occur, the ability to mitigate risks and deliver to customers is critical. Diversifying the supply chain to reduce reliance on routes passing through the Red Sea can mitigate the impact of disruptions in the region. Shippers must review insurance policies and risk management strategies to ensure coverage for potential regional disruptions. 

Supply chain networks may need to be redesigned with alternate logistics partners, sources, and suppliers. A supply chain network optimization solution answers “what if” scenarios to improve customer service, operational efficiency, inventory management, risk mitigation, and supply chain resilience. Supply chain network optimization solutions use data from across the supply chain to create a mathematical model representing the entire supply chain network. The model considers various constraints, objectives, and decision variables, including facility locations, transportation routes, inventory levels, and production capacities.

The Red Sea crisis is a wake-up call for companies to localize their supply chains. Shippers should have alternative sources of raw materials so they don’t have to rely on a single source for raw materials, which can make the supply chain vulnerable to disruptions. Having multiple sources allows shippers to negotiate better prices and hedge against sudden price increases from a single supplier. Because of the instability of the times, the availability of raw materials can be affected. 

Utilizing technology, such as tracking devices, predictive analytics, and communication systems, can help shippers better navigate high-risk areas and respond effectively to incidents. 

Seizing Opportunities Amid Uncertainties

  • The looming strike threat in the Eastern United States could expedite the return of cargo volume to the US-West Terminal.
  • Large importers may consider advanced shipment plans or opt for the West Coast route to mitigate potential strike risks.

Circumventing the crisis in the Red Sea requires careful planning, agility in your supply chain, and partnerships with logistics providers that can ensure shipments are shipped on time to the correct location. 

source: https://www.nexterus.com/

 

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Global Logistics, Global Trade Daily, International Trade, News

How The Red Sea Disruption Is Affecting Industry

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With several big shipping companies diverting their routes away from the Red Sea due to current conflicts, the delivery of shipping containers and consumer goods is taking longer than usual.

As a result of the ongoing Israel-Hamas war, the Houthi group in Yemen – who is openly backing Hamas – has said it is attacking all ships heading towards Israel. However, it is unclear whether all the targeted vessels are actually travelling to Israel, meaning many shipping firms have opted to avoid the busy shipping lane altogether.

In fact, over the past few months, a number of Maersk and MSC container ships have been assaulted by Houthi rebels, which has reinforced the importance for shipping companies to map out alternative routes for the security of their crew members and container cargo.

So, what does this mean for businesses awaiting commercial deliveries? Cleveland Containers, one of the UK’s leading suppliers of shipping containers, explains how the Red Sea disruptions are affecting industries across the country.

What is happening in the Red Sea?

Since the beginning of the Israel-Hames conflict in October, Houthi rebels have been launching rockets and drones against foreign-owned ships navigating through the strait of Bab al-Mandab. This is a 20-mile wide channel separating Yemen on the Arabian Peninsula side and Eritrea and Djibouti on the east African coast.

Andrew Thompson, Chief Executive Officer of the Cleveland Group, which consists of Cleveland Containers, Cleveland Hire and Cleveland Modular, said, “Generally, ships enter the strait of Bab al-Mandab from the south to cross the Red Sea and reach the Mediterranean via Egypt’s Suez Canal.

“But the threat of potential attacks has forced global shipping firms to amend their itineraries, with vessels now cruising around the Cape of Good Hope (South Africa) and then all the way up the west side of the continent.

“This is causing severe delays to shipping deliveries, as the alternative route can extend transit times to at least two or three weeks. And, in turn, the delays are also having a knock-on effect on the operations of sectors and companies all over the UK, impacting stock availability and delivery pricing.”

What sector is being affected the most?

Many sectors, such as retail and construction, are being significantly affected by the Red Sea disruptions, as companies deal with supply chain logjams due to the rerouting of deliveries.

Manufacturing is no doubt one of the industries that has to tackle the harsh consequences of the ongoing situation, too. For example, at the start of 2024, big automakers such as Volvo, Tesla, and Suzuki had to suspend some production across Europe because of shortages in components.

In particular, the UK manufacturing sector has witnessed a decline in operations in recent times, and the Red Sea problems have contributed to hindering the situation even further. As of January 2024, its purchasing managers’ index (PMI) stood at 47.0, with any reading below 50 indicating a contraction.

The current delays are prolonging expected deliveries, causing disruptions to production schedules and increasing financial pressures at a time when companies are already struggling to make ends meet.

The additional costs behind the Red Sea disruptions

The ongoing disruption in the Red Sea means that the cost of delivering goods worldwide is increasing, too.

The forced change in route has increased sailing times by 30%, leading to a rise in fuel consumption and extended work shifts for ship crews.

Not to mention that shipping companies are facing additional port fees as vessels need to stop more often along the way, as well as higher freight expenses overall.

So, ultimately, this is why businesses across the UK are currently having to spend more money on the delivery of products, items, and materials to keep their operations going.

It is also worth noting that the delays of goods leaving China and other parts of the world are escalating demand and impacting availability. Some sectors might be experiencing significant stocking issues, whereas others may not have the materials they need to fuel their industrial processes.

In short, the Red Sea disruptions are causing a slowdown in production, resulting in lower output and an overall loss in revenue for companies all over the country.

As things stand, the threat of Houthi attacks on vessels in the Red Sea is setting back transit times, increasing shipping costs, and putting the financial wellbeing of several sectors to the test.

While it is difficult to make predictions at this stage, the hope is that the situation will ease over the coming months to restore some sort of normality worldwide.

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Global Logistics, Global Trade Daily, International Trade

UNCTAD: Global Trade Expected to Rebound in 2024 Amid Geopolitical Uncertainties

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The United Nations Conference on Trade and Development (UNCTAD) forecasts a rebound in global trade, expecting it to hover around 3% this year after experiencing a 3% contraction in the previous year. Despite persistent geopolitical uncertainties, this optimistic outlook is attributed to rising demand for container shipping in recent months.

While logistical challenges such as disruptions in key shipping routes like the Red Sea, Black Sea, and Panama Canal remain a concern, the increasing demand for container shipping offers a glimmer of hope. Some East Asian and Latin American economies stand to benefit by integrating into supply chains affected by geopolitical tensions.

The report highlights the shifting landscape of trade policies, driven by domestic priorities and climate commitments. The adoption of trade restrictive measures and inward-looking industrial policies may impact international trade growth.

Looking ahead to 2024, projections are more positive, with moderating global inflation and improving economic growth forecasts indicating a reversal of downward trends. Additionally, the growing demand for environmental goods is expected to stimulate trade. However, uncertainties persist, underscoring the need for caution.

In 2023, most major economies, except Russia, experienced a decline in merchandise trade. Goods trade saw a 5% dip compared to 2022, with Russia particularly affected by a sharp decline in export levels tied to energy markets. However, there are signs of recovery, with China and India witnessing quarter-on-quarter growth in merchandise trade.

India, for instance, saw a 5% year-on-year growth in merchandise exports in the last quarter of 2023. However, on an annual basis, the country experienced a 6% contraction in export growth. These dynamics underscore the complex interplay of factors influencing global trade in the face of evolving geopolitical and economic landscapes.

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Global Logistics, Global Trade Daily, News

Procurement Leaders Lagging Behind on Sustainability Integration, Sedex Study Finds

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A recent study conducted by Sedex, a prominent provider of supply chain sustainability solutions, sheds light on a concerning trend among procurement leaders in North America: a significant portion are still overlooking sustainability factors in their decision-making processes. Despite growing calls for businesses to operate more sustainably, many procurement professionals fail to recognize the importance of integrating sustainability into their operations.

Key findings from the survey of senior procurement professionals in the US and Canada, conducted among companies not currently collaborating with Sedex, reveal troubling statistics. Shockingly, 40% of respondents admit that sustainability is not a consideration when making procurement decisions. Furthermore, half of the participants acknowledge that sustainability remains an afterthought or is disregarded entirely in their overall business decisions.

This disparity between corporate commitments to sustainability and actual procurement practices underscores a significant challenge faced by businesses today. Despite the widespread adoption of sustainability commitments and the production of annual ESG reports by many companies, there remains a disconnect between rhetoric and action within procurement departments.

Even more concerning is the perception among some procurement professionals that sustainable practices are incompatible with short-term procurement goals such as ensuring supply continuity and securing competitive pricing. This mindset is reflected in the fact that 34% of respondents fail to recognize any benefits associated with sustainable practices.

However, mounting evidence suggests that sustainable supply chain management can yield substantial benefits, including enhanced supply chain resilience and improved business performance. A recent study conducted by Forrester found that companies investing in sustainable practices through Sedex realized a remarkable 372% return on investment.

Despite these potential benefits, procurement leaders who prioritize sustainability are in the minority, with only 28% stating that it is central to all decisions. Additionally, the study highlights a concerning lack of awareness regarding sustainability legislation, with 37% of procurement professionals admitting to being unaware of relevant legislation that affects their business operations.

Maurizio Capuzzo, Chief Marketing Officer at Sedex, emphasizes the urgent need for businesses to realign their ESG commitments with operational goals. By embedding sustainable practices into their organizations, companies can unlock numerous tangible and intangible benefits, including improved supply chain management efficiencies, more effective ESG risk management, and enhanced reputation supporting long-term success. This study serves as a wake-up call for businesses to prioritize sustainability in their procurement strategies for a more sustainable future.

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Global Logistics, Global Trade Daily, News, Ocean Ports, U.S. Ports

Baltimore Bridge Collapse: Significant Impact on Local Port and Economy, Limited Effect on US Economy Overall

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The recent incident involving the Francis Scott Key Bridge in Baltimore, Maryland, which was struck by a container ship, is expected to have a significant impact on the local port and shipping operations, while its effect on the overall US economy remains relatively limited. The bridge collapse occurred in the early hours of Tuesday, the 26th of March’24, plunging cars into the river below and leading to the suspension of traffic at the port until further notice, according to Maryland transportation authorities.

“Collapse of the Francis Scott Key Bridge in Baltimore is a stark reminder of the fragility of our infrastructure and the critical need for resilience in the face of unexpected events.” said Christian Roeloffs, cofounder and CEO of Container xChange, an online global container logistics platform, based in Hamburg, Germany.

“As we navigate the aftermath, we are reminded that the container logistics industry centers around the critical need for robust risk management and resilience in supply chain operations. It highlights the importance of contingency planning, diversified routing options, and the integration of real-time tracking and analytics to mitigate the impacts of unforeseen events. This incident serves as a reminder that infrastructure vulnerabilities can lead to disruptions, and being prepared with flexible, adaptive strategies is essential for maintaining continuity in the face of challenges.” Roeloffs added.

While the full extent of the impact is yet to be determined, the collision is likely to have far-reaching consequences for the Port of Baltimore and its role in the regional and national economy.

The container vessel “DALI,” was operated by Synergy Group and time-chartered by Maersk. Maersk has confirmed that no crew or personnel were onboard the vessel at the time of the incident.

Areas of Implications to look for in the coming weeks:

  • Supply Chain Disruptions: The collapse of the Francis Scott Key Bridge could significantly disrupt the flow of goods in and out of the Port of Baltimore, particularly automobiles and crude oil. The port is a crucial gateway for specialized cargo and bulk handling, serving as a key link in many supply chains. Delays in cargo movement could lead to inventory shortages, affecting businesses that rely on timely deliveries, like the automotive industry which requires assemblies coming from different parts of the world.
  • Transportation Costs: Companies should prepare to face higher transportation costs as they are forced to seek alternative routes to bypass the affected area. These additional costs could result in increased prices for goods, impacting both businesses and consumers.
  • Regional Impact: The Port of Baltimore is a vital economic hub for the region, supporting thousands of jobs and businesses. The disruption caused by the bridge collapse could have a ripple effect on the local economy, leading to job losses, reduced business activity, and potentially lower consumer spending.
  • Consumer Impact: End consumers could potentially experience delays and price increases for certain products as a result of the bridge collapse, as it could take weeks, if not months, to resume operations at the port. Products that rely on timely delivery, such as perishable goods or time-sensitive materials, could be particularly affected.

 Impact on Container Movement

The collapse of the Francis Scott Key Bridge has led to the suspension of traffic at the Port of Baltimore, a key gateway for container shipping. With more than 40 ships remaining inside the port and at least 30 others signalling their destination as Baltimore, the incident has disrupted the movement of containers. As Baltimore is one of the smallest container ports on the Northeastern seaboard, handling 265,000 containers in the fourth quarter of last year, the flow of containers may be redirected to larger ports such as the Port of New York and New Jersey. This redirection could result in increased congestion and delays at these ports, affecting the timely delivery of goods and potentially leading to inventory shortages.

Impact on Port Operations

The harbor is one of the busiest in the country and an important hub for shipping on the US east coast, especially in transporting road vehicles. It also handles farming, construction machinery, and coal, according to a Maryland government website. Port traffic was suspended until further notice following the bridge collapse.

The Port of Baltimore serves as a vital link for raw materials and manufactured goods, facilitating trade into and out of Maryland, the mid-Atlantic region, and the Midwest United States. It ranks at or near the top of all U.S. ports in handling farm and construction machinery, automobiles, imported forest products, imported sugar, imported gypsum, and exported coal. The port’s infrastructure, including a 50-foot-deep channel and large cranes, allows it to accommodate massive containerships, such as the Evergreen Ever Max, which arrived at Seagirt Marine Terminal in mid-August 2023.

While the magnitude of the impact is yet to be determined, the disruption in traffic and operations at the port could lead to significant economic losses. The port generates nearly $3.3 billion in total personal income and supports over 15,000 direct jobs, with an additional 139,000 jobs connected to port work. The suspension of port activities could result in financial hardships for businesses and individuals dependent on port-related activities.

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Global Logistics, Global Trade Daily

Smooth Sailing: Navigating the Challenges of Supply Chain Logistics

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In today’s fast-paced, globally interconnected world, the global logistics and supply chain industry has grown to be a vital pillar enabling the smooth flow of products and services across borders. Success in this dynamic industry requires a fundamental understanding of business principles and a strategic imperative to master its intricacies.

Global supply chain management and logistics are dynamic fields impacted by various factors, including geopolitical upheavals, technology breakthroughs, and regulatory changes. To prosper in this dynamic environment, experts in the field must possess the knowledge, skills, and vision to adjust to new opportunities and challenges.

This article delves deeply into the challenges associated with logistics management, demonstrating the interplay between modern technology, the supply chain, and different logistics procedures while offering suggestions for successful logistics firms.

Top Challenges of Supply Chain Logistics

Increasing Supply Chain Risks

The primary source of supply chain risks is market volatility. Risks and problems associated with supply chain management include shifting customer demand, trade disputes, shortages of raw materials, climate change, tighter environmental requirements, economic uncertainty and policy changes, industrial unrest, etc.

Cost Control

Globally, the labor cost, energy, freight, and raw materials have increased. Businesses must tighten cost control to guarantee uninterrupted production and ongoing supply of high-quality items at competitive prices.

Digital Transformation

To enhance supply chain operations, digital transformation via the adoption of technologies like IoT, AI, drones, and robotics is required. Implementing these technologies into current supply chain processes, however, is the main difficulty of supply chain management.

Data Synchronization Throughout the Supply Chain

For supply chains to be managed effectively, data access is essential. Data management is a major difficulty in supply chain management because of the abundance of data points in global supply chains.

Unexpected Delays

Global supply chains are prone to delays since they invariably include great distances and several phases. Goods with long lead times are more likely to experience unforeseen delays in shipping.

Increasing Freight Costs

The freight cost has increased due to rising energy prices and growing demand for container shipping. The need for container transportation increased because of the pandemic’s spike in e-commerce.

Difficult Demand Forecasting

Demand forecasting became challenging because it’s almost impossible to anticipate figures for manufacture and the inventory to be stored because of the pandemic and the ensuing disruption to the supply chain.

Port Congestion

Port congestion resulted from the pandemic’s restriction of freight loading and unloading activities. This resulted in a lack of logistics equipment like heavy-duty caster wheels for faster transport, leading to delays in dispatches and deliveries.

Other Challenges Supply Chain Logistics Face

Recent supply chain challenges have forced companies of all sizes to rethink their operating plans to preserve strong financial lines and keep their clientele.

The following are some of the major issues that global supply chains face:

  • Navigating a constantly unpredictable environment
  • Labor shortages
  • Effects of global bottlenecks in ripple form
  • Availability of equipment

How to Overcome Supply Chain Logistics Challenges

Automate Processes

Increasing automation will assist in balancing client demands and warehousing expenses, as well as,  monitoring possibilities of overstocking inventory. Forecasting automation reduces overhead, increases inventory optimization, and eliminates the risk of stockouts and shortages.

Partner With Colleagues in the Industry

The conventional techniques of using Excel spreadsheets to operate the supply chain are no longer effective with the complexity of the modern supply chain. To keep the supply chain moving, constant and ongoing partnership with people like suppliers, manufacturers, financiers, regulators, and logistics teams are essential. These relationships will be possible and simple to implement with software solutions that offer automated permissions, notifications, information-rich dashboards, and real-time updates.

Get End-to-End Visibility

You need to be able to see the entire process, from the acquisition of raw materials from suppliers to customer delivery, to manage supply chain operations efficiently. Businesses can use data logging to trace and monitor the supply chain. Thanks to the data analysis processes, the procedure can be controlled effectively. 

Other Solutions Include:

  • Effective risk management in the supply chain
  • Successful collaboration
  • Maximizing supply chain data

Furthermore, it is believed that conventional supply chain management techniques would become obsolete due to the growing complexity of global supply chains. Using software solutions for automation is a must to tackle supply chain management challenges.

To address these existing challenges, businesses are increasingly turning to automation tools or contracting with third-party service providers for supply chain management.

Bottom Line

To effectively navigate the obstacles in the logistics industry, one must have a flexible and strategic mindset. The modern supply chain must be agile and adaptable. However, a supply chain can only be made more resilient or agile by giving significant thought to how it is designed, implemented, and run. This calls for a shift in perspective, the use of cutting-edge tools and technologies, and the addition of risk and agility KPIs to the more conventional metrics of cost, quality, and service levels.

Remember: success in the future in a global market that is rapidly changing will depend on your ability to comprehend these logistic challenges management and to respond effectively. 

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Global Logistics, Global Trade Daily, International Trade, News, Ocean Ports

Baltimore Bridge Collapse: Impact on Local Economy and Global Trade

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Following a cargo ship collision with a motorway bridge in Baltimore, concerns have arisen regarding potential disruptions to both local and global trade. While the incident may temporarily affect US supply chains and the Maryland economy, its impact on global trade movements is expected to be minimal.

The closure of Baltimore’s port, which handles approximately 10% of imports to the northeast US, could lead to short-term disruptions. However, the majority of containerized shipments can be rerouted to other nearby ports such as Wilmington, Philadelphia, and New Jersey.

The collision involving the Singapore-flagged Dali, a 117,000-tonne container ship, resulted in the collapse of a section of the Francis Scott Key Bridge, blocking seaborne access to most of the city’s port facilities. Unfortunately, six construction workers are missing and presumed dead.

The Maryland Port Administration has stated uncertainty regarding the duration of the suspension of vessel traffic. While ground transport continues to serve the port terminals, MSC anticipates several months for the port to be declared safe.

Analysts predict that the primary impacts of the bridge disaster will be felt by Baltimore’s local economy rather than global supply chains. Despite ongoing challenges such as Houthi attacks in the Red Sea and capacity reductions in the Panama Canal, the disruption’s effects on US GDP and inflation are expected to be minimal.

Although the Port of Baltimore is smaller in capacity compared to other ports in the northeast US, it is a crucial hub for imports and exports of cars and trucks, handling around 847,000 vehicles in 2023. The impact on the automotive industry may be mitigated as one of the main terminals remains accessible for ships.

Furthermore, while Baltimore is a significant coal export terminal, the impact on global coal trade may be limited. However, there could be potential disruptions to coal prices in India, a top export destination for coal shipped from Baltimore.

Container xChange warns of potential congestion and delays at nearby ports due to redirected vessel traffic, which could affect the timely delivery of goods and lead to inventory shortages.

The bridge collapse has highlighted the importance of Baltimore’s port as an economic hub, supporting thousands of jobs and businesses in the region. The disruption could have ripple effects on the local economy, including job losses and reduced business activity.

US President Joe Biden has pledged efforts to reopen the port and rebuild the bridge promptly. Meanwhile, the involved companies are working on contingency plans to address cargo interests and potential delays.

As emergency responders work to recover the missing construction workers, the incident serves as a reminder of the risks associated with maritime transportation and infrastructure vulnerabilities.

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Global Logistics, Global Trade Daily

Plastic Food Packaging Trends, Innovations and Environmental Implications

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Food packaging is a coordinated system that prepares food for transit, distribution, storage, retailing, and eventual consumption by the end users while maintaining optimal cost efficiency. It is essential in modern civilization because it allows for the safe and efficient handling and distribution of commercially prepared foods. Poor packaging is responsible for more than 25% of worldwide food waste, according to the World Packaging Organization (WPO).

Plastics are commonly used in food packaging due to their versatility and adaptability for a variety of purposes. Plastic materials are chosen for specialized food packaging depending on their ability to meet the desired use criteria. Different plastics have unique features that cater to certain packaging requirements, ranging from barrier properties to moisture, oxygen, and light resistance.

The global market for plastic food packaging is projected to increase from $54.98 billion in 2022 to approximately $88.28 billion by 2032. This growth is anticipated to occur at a compound annual growth rate (CAGR) of 4.9% between 2023 and 2032.

Plastic is widely used in food packaging due to its versatility and convenience. Here are some common types of plastics used in food packaging:

  1. PET Plastics: Polyethylene terephthalate, or PET, is a popular choice for food packaging. It is known for its strength, lightweight nature, and transparent appearance. PET is commonly used for beverage bottles, salad containers, and food trays.
  2. HDPE Plastics: High-density polyethylene, or HDPE, is another common plastic used in food packaging. It is a thermoplastic polymer derived from petroleum. HDPE is often used for packaging items like milk jugs, yogurt containers, and detergent bottles due to its strong and durable properties.
  3. LDPE Plastics: Low-density polyethylene, or LDPE, is also used in food packaging. LDPE is a thermoplastic material that is lightweight and flexible. It is commonly found in plastic wraps, sandwich bags, and squeeze bottles for condiments.
  4. PP Plastics: Polypropylene, or PP, is used in various food packaging applications. PP is known for its heat resistance and is often used in microwave-safe containers, such as those for storing leftovers or ready-to-eat meals. It is also commonly used in yogurt cups, margarine tubs, and takeout containers.

Plastic Food Packaging Market Trends

  • Plastic food packaging is versatile and convenient, making it ideal for a wide range of food goods such as fresh produce, dairy, meat, seafood, snacks, and beverages.
  • Plastic food packaging extends the shelf life of perishable foods by acting as an excellent barrier against moisture, air, light, and pathogens.
  • Advances in plastic food packaging technology have resulted in new solutions that improve product protection, functionality, and sustainability.
  • Plastic food packaging enables adapting and branding to differentiate items and build brand identification.

Asia-Pacific’s Leadership in Plastic Food Packaging Innovation

There is a great leadership in the shift to a circular economy for plastic food packaging in the Asia-Pacific (APAC) region, which produces more than half of the world’s plastic 52% of 390.7 million tonnes overall. This area is at the forefront of attempts to combat plastic waste since it is home to some of the biggest plastic producers in the world. In the Asia-Pacific area, plastic packaging is widely used, especially in China and India, where the food and beverage industry is highly dependent on it. China’s consumer sentiment is changing, leading to policies like banning specific plastic products to lessen the country’s plastic pollution. It is anticipated that this change will increase the nation’s need for recyclable flexible plastic packaging.

Impact of Plastic Food Packaging on Daily Life in North America

North America is the second-most plastic-using food packaging region in the world, after Asia. Different packaging materials frequently serve as differentiating characteristics. Food packaging has become an integral component of daily life in modern, industrialized countries. Due to a number of benefits over other materials, plastic stands out as the material of choice for food packaging. Among these are its affordability, versatility, ease of customization, lightweight design, and wide availability. Plastic is a major material, making up around 21% of the containers and packaging sector in North America.

Plastic brings serious environmental risks despite its widespread use and success, especially when it comes to its impact on end-of-life (EOL) situations. The collection and disposal of plastic garbage represent major hazards to wildlife and ecosystems. A growing number of people are looking for solutions since they are aware of these problems, like smart plastic packaging materials and bioplastic. Because they come from renewable resources and may be composted or biodegraded, bioplastics provide a more environmentally friendly choice. Similar to this, smart plastic packaging uses cutting-edge technology to improve sustainability and functionality. Examples of these technologies include active packaging solutions for food preservation and intelligent sensors for freshness monitoring.

Innovations in PET Packaging for Food and Beverage Industry

Polyethylene terephthalate (PET) is widely recognized for its lightweight and semi-rigid to rigid structure. It is utilized in food packaging for a range of products, including soft drinks, sports drinks, water bottles, condiments like ketchup, salad dressings, vitamins, vegetable oil, and peanut butter containers. Because of this feature, food or liquids contained within the container are guaranteed to be safe. It also has good impact resistance.

Plastic Food Packaging in Bakery and Confectionery Industry

The industry that uses plastic food packaging the most is the bakery and confectionery sector, which is where these packaging solutions are most commonly used. The production of baked goods has been steadily increasing in India, and it is now the largest part of the processed food industry. The two main actors in the bakery industry, bread and biscuits, together account for around 82% of the output of all bakery products. Over three million tonnes of bakery goods, such as bread, cookies, pastries, cakes, buns, and rusk, are produced each year.

Improving Consumer Experience with Smart Plastic Packaging

Smart plastic in food packaging is the integration of sophisticated technology into plastic packaging materials to improve functionality and performance. These technologies allow packaging to interact with the environment, the product it holds, or the user, resulting in benefits such as increased food safety, longer shelf life, and a better consumer experience. Smart plastic packaging may include active or intelligent packaging systems that can release antimicrobial chemicals to limit bacterial development, absorb oxygen to delay food spoiling, and check product freshness using indicators such as time-temperature sensors.

Report Source: https://www.towardspackaging.com/insights/plastic-food-packaging-market-sizing

 

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Global Logistics, Global Trade Daily

The Human Factor in Logistics Exploring the Role of People in Supply Chain Management

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Logistics and supply chain management are integral components of modern industries, orchestrating the seamless flow of goods from production to consumption. Despite technological advancements, the human element remains paramount in ensuring the efficiency and success of these operations. From warehouse staff to supply chain analysts, individuals at every level play a vital role in coordinating and optimizing processes. In this blog, we’ll explore the significance of the human factor in logistics, highlighting the essential role of people in supply chain management.

The People Behind the Scenes

Logistics and supply chain management are pivotal for efficiently moving goods from manufacturers to consumers. Logistics entails coordinating procurement, production, warehousing, and distribution, while transformative supply chain management optimizes these processes to meet customer demands. Despite technological advancements, people remain essential to success. Warehouse workers, truck drivers, analysts, and customer service representatives are vital in ensuring smooth operations. Join us as we uncover the importance of human involvement in logistics and supply chain management, driving efficiency and innovation in modern supply chains.

Big shipping containers stacked on top of each other
Logistics would not work properly without the role of people in supply chain management. 

Customer Service and Relationship Management

Frontline staff and customer service representatives are the perfect example of the role of people in supply chain management in shaping the overall customer experience. Their interactions directly impact satisfaction, as they are often the face of the company to customers. Their professionalism and empathy can greatly enhance customer satisfaction and loyalty, from assisting with product inquiries to resolving issues.

Furthermore, building and maintaining strong relationships with customers and suppliers is vital for long-term success. Positive relationships with customers lead to repeat business, word-of-mouth referrals, and brand advocacy. Similarly, nurturing relationships with suppliers fosters collaboration, reliability, and often preferential treatment. By prioritizing relationship management, businesses can create a loyal customer base and a reliable supply chain network, ultimately driving sustainable growth and profitability.

The Role of People in Supply Chain Management With Problem-Solving and Adaptability

Logistics professionals are adept at tackling challenges and adapting to evolving circumstances. For instance, when faced with unexpected transportation delays or disruptions in supply chains, they swiftly implement contingency plans to minimize impact and ensure timely delivery of goods. Their ability to think critically and solve problems efficiently is evident in their approach to optimizing routes, managing inventory, and resolving logistical bottlenecks.

Man writing on a whiteboard and explaining the role of people in supply chain management.
Many problems in supply chain management can only be solved by people

These problem-solving skills are indispensable in this dynamic industry, where unpredictability is the norm. Whether rerouting shipments to avoid traffic congestion or renegotiating contracts to accommodate changing market conditions, logistics professionals demonstrate resilience and ingenuity in navigating complex challenges.

Training and Skill Development

Ongoing training and skill development are essential for logistics employees to stay competitive and proficient in their roles. As technology continues to evolve, so do the demands of the industry. Regular training programs allow employees to stay updated on the latest advancements, best practices, and logistics and supply chain management regulations. Additionally, the increasing prevalence of technology and automation in the field requires logistics professionals to acquire new skills and adapt to changing work environments. With the rise of technologies like GPS tracking, warehouse management systems, and autonomous vehicles, employees must develop data analysis, software management, and troubleshooting expertise. By investing in training and skill development, companies can ensure that their workforce remains agile, capable, and prepared to tackle the challenges of a rapidly evolving industry landscape.

Employee Well-being and Satisfaction

Prioritizing employee well-being and satisfaction is important for the success of logistics companies. Recognizing that employees are the backbone of operations, companies that invest in their well-being reap numerous benefits, including increased productivity, higher morale, and reduced turnover rates. To foster a positive work environment, logistics companies can implement various strategies such as offering competitive compensation and benefits packages, providing career growth and development opportunities, promoting work-life balance, and fostering a culture of open communication and appreciation. 

In addition, initiatives like employee assistance programs, wellness programs, and flexible scheduling can further contribute to employee satisfaction and retention. By prioritizing the well-being of their workforce, logistics companies attract top talent and cultivate a loyal and motivated team that drives the business’s success.

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Team satisfaction comes with good human relationships and communication

Know the Role of People in Supply Chain Management

Understanding the essential role of people in supply chain management is important for the efficiency and success of modern logistics. From frontline staff to logistics professionals, each individual shapes operations and ensures customer satisfaction. Building strong relationships with customers and suppliers, adapting to technological advancements, and prioritizing employee well-being are key components of this human involvement. By recognizing and investing in the human factor, businesses can drive efficiency and innovation in the logistics industry, ultimately leading to sustainable growth and profitability.

Author bio

Rebecca Mitchell is a seasoned logistics and supply chain management specialist with extensive experience in the field. As a business owner and consultant, she offers invaluable insights into logistics and supply chain operations. Outside her professional role, Rebecca shares her expertise through her articles for mod-movers.com, a moving company that provides a wide range of residential and commercial moving services, assisting entrepreneurs and established businesses in the logistics industry.