Topic of the week:
As the year comes to a close, it is a great opportunity to look at the state of the logistics and freight forwarding industry moving into 2024. So what are some of the key trends, and what can we expect as we transition into the new year? Read on to find out.
Digitalisation within the industry is something that we can all generally agree on. More and more forwarders are investing in new technological solutions as customers demand greater visibility and tracking. But it isn’t all about shipment tracking. Investment in technology is also coming about due to the need to respond to arising issues or crises. Being able to use technology to analyse and monitor trends is integral to predicting and anticipating future troubles within the industry and allows for a pro-active response in order to mitigate the effects of said crises. This is something that we should all be aware of after the events of 2023, from rock bottom rate drops to economic and unprecedented geographical issues.
Digitalisation leads on to one of the bigger updates within the industry which is the increased implementation and development of autonomous vessels and aircraft. Companies are now implementing remote piloted vessels and fully AI driven ships within their fleets and the same goes for air cargo. Cargo drones from the likes of Elroy Air, Reliable Robotics and Dronamics, are but a few of the new and emerging leaps in autonomous cargo innovation. Not only are these safer for crew as they can be piloted remotely, but driven by data and machine learning means that they are better at forecasting, anticipating and responding to rougher weather conditions for example and any events that could pose a risk to cargo. These vessels and aircraft are also either fully electric or powered by green fuel alternatives, furthering sustainability within the industry.
Sustainability is making waves, no pun intended. As new rules and regulations are imposed across the globe, and with all the COP28 buzz, sustainability is another must have as we move towards a greener future. New fuel types, from hydrogen and green methanol to fully electric powered vessels and aircraft either have been or are currently being developed. Forwarders are now taking their carriers’ sustainability and practices into consideration and partnerships are being formed with the aims of pushing forward the innovation of greener fuel alternatives within the space.
We are all aware that freight rates have fluctuated throughout this year and have even hit record lows. In Flexport’s most recent European market update, they have shown that rates are now at pre-pandemic levels. Whilst demand still remains low there are glimmers of hope as some carriers report full bookings for the last few weeks of December and analysts predict to see some growth, at around 3 – 4% in 2024. In order to deal with the uncertainty of the new year, aggressive capacity management and more dynamic approaches to landscape shifts is looking like the best strategy moving forward. It is best to monitor the efficiency and profitability of your operations and continue to optimize throughout 2024.
- Over the last two weeks China/East Asia to North America West Coast spot rates have increased by 54.7% from $1,613 /FEU to $2,496 /FEU according to Freightos data.
- China/East Asia to North America East Coast spot rates have fallen over the last two weeks, decreasing by 32.2% to $1,603/FEU.
- Global container spot prices have risen over the last two weeks, and are now sitting at $1,270 /FEU, a 9.9% increase over the last two weeks, and a 40% decrease from spot rates this time in 2022 according to the Freightos Baltic Index (FBX)
- Global Air Freight spot rates currently sit at $2.68, as rates continue to fluctuate according to the Freightos Air Freight Index (FAX)
- Europe to Northern America spot rates currently sit at $2.16 (100-3000kg), says FAX, increasing by 2.8%
- Europe to Central Asia spot rates have increased by 1.3% currently sitting at $2.22 (100-3000kg), says FAX
- Europe to Asia, Greater China spot rates currently sit at $1.36 (100-3000kg), says FAX
- Autonomous aircraft developers, Natilus, and Ameriflight have now developed a new remote pilot training station. The new ground control station allows for the remote pilots of the autonomous cargo drone fleet to be trained, and allows for seamless integration with all Natilus aircraft for data consolidation and tracking. The Natilus Pilot Operations Desk allows for real time data and layering for pilot training, as well as monitoring various data streams and metrics. This is an interesting update to the future of autonomous cargo aircraft.
A quick disclaimer:
This will be the last Freight Market Update published from the DG International LinkedIn page. As of January the Freight Market Update will be published from the Pro Carrier LinkedIn page as the two brands merge under one umbrella to form one entity, Pro Carrier. You can find out more about this merger here.
That’s all for this week’s update…
Check out our other insights and articles for more in depth industry news and trending topics, or get in contact to discuss some of our best in class freight forwarding services!