Labor issues, low water levels, too much inventory, strikes, blank sailings, Red Sea disruptions, and more all took place this year.
As 2023 officially has ended, we look back at some notable supply chain events that have occurred and some still occurring into the New Year.
January: Major Retailers Are Moving Away From Private Charter Ships
Large retailers who could afford it were purchasing chartered ships in an effort to bypass the supply chain disruptions caused by COVID- related factors. But now experts are seeing a drastic decrease in the use of these private charter cargo ships as the industry moves into pre-pandemic stability.
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February: 2M Alliance Announces Their Split
In early January, Maersk and MSC, the world’s two largest lines, announced their 2M Alliance will be terminated, effective January 2025. This comes as the two shipping giants “pursue individual strategies” with their respective businesses.
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March: Transpacific Shipping Contract Season Coming to a Close
With the trans-Pacific shipping industry’s annual contract season coming to an end, everyone is curious to see where contract prices settle in the next weeks. The position is extremely challenging this year as the most recent round of contracts were signed at historically high levels and the current contract RFP season is taking place at a time when spot rates are still decreasing.
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April: Kansas City Southern and Canadian Pacific Merger is Official, Plus Howard Terminal No Longer an Option for Oakland A’s Ballpark
The united business of Canadian Pacific (CP) and Kansas City Southern (KS) started operating as Canadian Pacific Kansas City (CPKC) on April 15th, 2023. When CP announced its interest in combining with KCS in March 2021, the merger process got under way just over two years ago.
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The Oakland A’s recently announced they have a binding agreement to buy land in Las Vegas for a new stadium. This recent news from the Oakland A’s now opens the door for new maritime and economic developments at the Port.
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May: U.S. CBP Inspects Over A Billion Flowers Leading Up to Mother’s Day, Plus Import Volumes From Asia Are Up
Leading up to this past Mother’s Day, more than three billion U.S. dollars were planned on being spent on flowers, which is up from the $2.9 billion spent last year. This has prompted even more flower inspections than a typical day/week at the U.S. Customs and Border Protection.
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Last month, U.S. shippers acted quickly in shipping their cargo as the industry has forecasted that trans-Pacific shipments headed towards Asia were going to rise significantly in costs. Reports indicate that the volume of cargo moving through U.S. ports eastbound to Asia reached over 1.3 million TEU’s, which is the 2nd highest it’s been in the preceding 6 months.
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June: Slimmer Inventories This Year for Retailers After Too Much Supply Last Year, Plus Low Water Levels in the Panama Canal
With shortages during 2020 and 2021, and then an oversupply in 2022, many retailers now are starting to have slimmer inventories. But where does that leave retailers for the rest of this year and beyond?
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Concern is being expressed by economists, supply-chain specialists, and industry stakeholders due to the severe drought that is affecting the Panama Canal, a vital marine commerce route that connects the Pacific and Atlantic Oceans. Gatun Lake’s diminishing water levels, which are the canal’s main source of water, are causing shipping operations to be disrupted and may result in bottlenecks, weight restrictions, and more fees.
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July: ILWU Canada Goes On Strike
International Longshore and Warehouse Union in Canada dockworkers have been on strike since Saturday, July 1st. This comes after negotiations with the British Columbia maritime Employers Association (BCMEA) failed to reach a resolution on a new labor contract.
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August: Japan’s Exports See a Drop, plus How the Panama Canal is Handling the Severe Drought
Japan’s export industry, which is a key engine of economic growth, has experienced instability, representing the first decline in more than two years. The decline in exports serves as a warning for the nation’s economic recovery, which has relied primarily on foreign markets to counteract sluggish domestic spending.
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The Panama Canal has been dealing with quite the dry season. This drought has caused low water levels at one of the more famous commercial trading routes. Around forty percent of all U.S. container traffic travels through the canal every year and is a crucial trade link for U.S. shippers that use the East and Gulf Coast ports. Water levels in Gatun Lake, which holds the water supply that operates the locks systems of the Panama Canal, are at a four-year low.
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September: Water Levels On The Mississippi River
As we enter harvest season, the Mississippi and Ohio rivers are experiencing low water levels, for a second straight year. These low water levels have the potential to hinder and cause challenges for those that ship via these waterways. The Mississippi and Ohio rivers are known as major U.S. freight hubs for moving coal, oil, natural gas, chemicals and commodities.
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October: Ocean Eastbound Trans-Pacific Blank Sailings Expected to Continue, Plus, Carbon Pricing Is Coming Shortly to the Trans-Atlantic
Blank sailings on the eastbound transpacific trade lane are expected to continue (due to oversupply) for the time being, and potentially into the Lunar New Year– which is on February 10 (factories in Asia are typically closed for one to two weeks).
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With maritime transportation included in the EU Emissions Trading System next year, ocean carriers have released their respective estimates on surcharges, or carbon pricing, for containers bound to and from Europe. This particular development will impact transatlantic trade. The European Union (EU)’s Emissions Trading System will apply to the shipping sector starting January 1.
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November: Port of Virgina Continues to Invest in Port Updates, Plus What the Thanksgiving Holiday Looked Like
The Port of Virginia is continuing to invest into updating their facilities, in an effort to receive more of the growing demand on the U.S. East Coast. In addition to that, the port has increased their square footage of new industrial warehousing to 4 million in the Norfolk area this year. Which is a stunning increase of ten times than what it was pre-pandemic.
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Millions will be traveling near and far, by air and/or road, to visit their friends and family. Additionally, this holiday weekend includes Black Friday and Cyber Monday which are two very popular days for consumers to shop the latest and greatest deals. In this blog we take a look at what the anticipated holiday travel this week and weekend looks like, plus how many people are anticipated to partake in Black Friday and/or Cyber Monday shopping?
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December: Is the Suez Canal a Good Re-Routing Option For You? Plus, How Did U.S. Imports Fare in November?
Reader’s note: This blog was written before the significant challenges and disruption in the Red Sea.
The Suez Canal-Atlantic route is usually a quicker and more direct route from Southeast Asia, particularly from India, a rising trade partner with the U.S. The Suez Canal is unique in that it can accommodate enormous 24,000 twenty-foot-equivalent units (TEU) supercarriers, which are built for economies of scale and cost effectiveness. The Suez Canal has not been impacted by climate change, in contrast to the Panama Canal.
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The month of November did see some decreases in total U.S. imports handled, but November typically is a weaker month than October and lines up with other years’ performance during this month. Volumes were up 7.4 percent from last year, but many say the reason for this is due to the bloated inventories that occurred during the end of the “supply chain crisis” during the pandemic.
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Looking Ahead
What an eventful year it was! Should you have any questions regarding this and how it could impact your shipments, please reach out to our team today.
Additionally, we have our weekly market updates that can provide you with relevant freight news, updates, developments across the industry, and more.