Market Intelligence [Jan 2024] Quarterly Logistics Market Review and Outlook

Registration dateJAN 17, 2024

Review

- In 2023, the global economy recorded a 2.9% GDP growth rate due to high debt, high interest rates, and geopolitical issues(based on OECD).
- US CPI fell for two consecutive months until November, recording 3.1%, and the direction of the Fed’s interest rate cut is expected to be determined by the CPI results in December.

Outlook

- In 2024, the low growth rate will be maintained following the previous year, with growth expected to grow by 2.7%, a slight decrease compared to the previous year.
- China is likely to enter a mid- to long-term low growth path due to continued real estate risks and weak consumer sentiment.

International Oil Price (WTI) (November)

: - Korea's GDP growth rate is expected to increase yoy in H1 ’24 due to the continued improvement in exports since 2H ’23.

: - China grew by 5.8% in 4Q ’23, showing some recovery from the weak reopening effect.
- China's manufacturing PMI has repeatedly fallen below the economic baseline of 50 for the past three consecutive months, raising concerns about slowing growth.

: - Vietnam's exports have been recovering since 2H ’23 due to the improvement of the IT economy, and continued growth is expected based on stable macroeconomic conditions & domestic demand.

: - The United States continued its growth until 3Q ’23 due to solid consumer spending, but growth weakened from 4Q due to the impact of interest rates.
- US retail import volume will be slowed in 1Q ’24, but is expected to recover after April.
- The U.S. CPI fell for two consecutive months, recording 3.1%, and the Fed's interest rate cut is expected to be decided based on the December CPI results.

: - The EU consumer price inflation rate is at its lowest since Feb. ’22 due to a decline in the rate of increase in food and service prices.

Review

- SCFI rose slightly in 4Q '23 (avg. 1,089) compared to the 3Q '23 (avg. 986).
- Cargo volume in the 2H '23 increased by 1.5% YoY due to the holiday season effect.

Outlook

- A modest rebound in container trade and oversupply due to record deliveries will make spot rates remain volatile and stressful in '24. The Panama Canal drought and Red Sea crisis will lead to disruptions and extra costs.
- Global container volume will see a 3.5% rebound, while fleet supply will face a record growth of 8.8% due to slippage deliveries from '23. Fleet demand/supply will remain weak in '24.

Samsung SDS SCFI Forecast

: SCFI Comprehensive index is expected to be 1,144~1,555 in the 1Q '24 and 943~1,010 in the 2Q '24.
Freight forecast for 1Q '24 : USWC $1,867 / USEC $3,157 / North Europe $1,438

(Source : SamsungSDS Brightics)

Regional Trends

: [Asia]
Blank sailings decreased after China Golden Week, but it’s expected to increase again ahead of the Chinese New Year holiday in '24.

: [Americas]
While LA/LB and Savannah ports are stable, the number of waiting days at New York ports has increased due to schedule disruptions to the USEC. Container vessles’ sailing speed increased, reflecting the increase in rates due to geopolitical risks.

: [Europe]
For Asia-N.Europe route via the Cape of Good Hope, increased transit time and additional costs are expected. Need to monitor the number of staying days at major European ports.

Review

- VN-US, VN-EUR rates keep soaring , on par with ex-SHA, HKG level.
- Global airfreight passenger traffic, capacity and demand are returning to, or close to, 2019 levels, and US consumer spending growth at high level remarkably beneficial to strengthening the demand of airfreight cargo.
- International passenger seats available in Week 51 of ’23 recorded at 99.1% from the 2019 level and at 125.5% (vs‘22). The 4Q international seats has recovered to 96.2% of the level in 2019 with a positive sign.

Outlook

- The trend of rising freight rates is expected to last until Lunar New Year Holiday Season (Feb. '24), and market set a new benchmarking air fare baseline, expected a seasonal demand to emerge in 2024.
- Due to the Israel / Palestine war and heightened geopolitical tensions in the Red Sea region. Large volatility of Jet Fuel prices and FSC forecast for the first half of year ’24.

Samsung SDS TAC Forecasting

: HKG- US : '24. 1Q $5.0 ~ $6.4, '24. 2Q $4.5 ~ $4.8, 3Q $4.1 ~ $4.3
HKG-EUR : '24. 1Q $3.9 ~ $4.2, '24. 2Q $3.7 ~ $4.0, 3Q $3.5 ~ $3.6

(Source : SamsungSDS Brightics)

Regional Trends

: [Asia]
Air freight rates soar due to limited cargo capacity for flights to US. The e-commerce driven rate up expects to last until early February's Lunar New Year holiday. (From Sep. to Dec. Average monthly rates VN→EU: +58.6% , VN→USA:+105.1%)

: [Americas]
Europe to Latin America airfreight routes are also overheating. Europe to Latin America airfreight rates surge 34% to $3.63/kg from four weeks ago, driven by increased demand for specialty cargoes.

: [Europe]
DHL Global Forwarding(DHL GF) paints a broadly stable picture for air cargo demand in its November ‘Air Freight State of the Industry’ report. While overall demand was stable, the situation varied form region to region, with volumes out of Europe and North America pulling down global figures. (11/29, Air Cargo News)

You can find more detailed information about the quarterly outlook report predicted by logistics experts at Samsung SDS in their white paper.

(Source : https://www.timeanddate.com/ )

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Market Intelligence [Jan 2024] Quarterly Logistics Market Review and Outlook

Review

Outlook

International Oil Price (WTI) (November)

Review

Outlook

Samsung SDS SCFI Forecast

Regional Trends

Review

Outlook

Samsung SDS TAC Forecasting

Regional Trends

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