Market Intelligence [Feb 2024] Logistics market review and outlook for Jan

In Nov 2023, the US and major European countries underwent a gradual economic recovery phase.
Although China has shown signs of recovery, the real economic indicators such as the demand of the construction industry and consumer prices may need to be further observed.

※ If it is in an upward with more than 100 based on 100, it is evaluated as an expansion phase, if it is in a downward with less than 100, a contraction phase.
※ Europe : France, Germany, Italy, UK

The US PMI recorded 50.7 in Jan 2024, turning into a recovery phase. The EU PMI marked 46.6, showing a modest rebound after hitting the trough in Jul 2023.
China recorded a negative YoY CPI for three consecutive months(Oct-Dec 2023), raising concerns over deflation.

※ A leading indicator of the economic situation as a result of a monthly survey of more than 400 corporate purchasing/supply managers

73.7상승(1.5)

WTI fell for two months in Nov & Dec '23 due to slow demand, but rebounded in Jan '24 due to the Red Sea crisis.
Oil market will likely remain volatile in Q1 '24 as geopolitical tensions in Middle East escalated.

2,130상승(900)

In Jan '24, SCFI exceeded 2,000 for the first time in 16 months since Sep '22, recording an avg. 2,130, 73.2% up MoM.
Due to the backlog caused by the Red Sea crisis, NA EC & WC freight rates continued to rise from Dec '23 to the first week of Feb.

Freight rates on major routes are expected to stabilize due to factory shutdowns during the Chinese New Year in Feb.
The Composite Index is forecasted at 1,829 - 2,347 points for 1Q '24.

The fleet growth rate in '24 is expected to remain high at 8%. (The fleet growth % in '24: +5.8%(‘23.04) → +6.6%(‘23.07) → +6.8%(‘23.10) → +8.0% (’24.01))
The Red Sea disruption may temporarily reduce effective capacity, but will normalize once the crisis eases.

[Asia] Indian shippers concerned about container equipment shortage
- Currently, container equipment shortage is highlighted at Nhava Sheva and Mundra ports, which are major trading ports in India.
- Normally, this area had a surplus of empty containers due to low match-back(low outbound volume), but due to the recent Red Sea crisis, equipment supply faced challenges.
- According to a forwarder in Mumbai, there is a particular shortage of 40’ HC(High Cube) containers and some customers are already giving up on booking due to the shortage (1/22, The Loadstar).

[Americas] NRF, urges USMX and ILA to Resume Contract Talks
- NRF urges resumption of negotiations between USMX and ILA on Jan. 9 to prevent potential logistical disruptions in the US East and Gulf regions.
- USMX, which represents employers at 36 ports on the East and Gulf Coasts, and ILA, which represents more than 70,000 port workers, negotiated in early '23 for a six-year renewal of their contract ending Sep 30, '24.
- A strike by U.S. port workers is expected if a deal is not reached by Sep 30, '24.

[Europe] GDL announces six-day strike
- According to a press release from the union, a walkout is planned from Jan. 23 to Jan. 29, 2024.
- The effects of the strike will also affect supply-relevant industries such as energy and chemicals, as well as industries that rely on just-in-time deliveries, such as the automotive industry.
- GDL held a five-day strike until Jan. 28, earlier than originally planned, then called it off and resumed negotiations with its employer, DB, with a deadline of Mar. 3.

HKG-EUR 4.12하락(1.2) HKG-US 5.02하락(1.8)

All routes decreased MoM in Jan 2024. This is judged to be the base effect of the demand for e-commerce from China, which has been continuing since Nov 2023. The trend in the last week of Jan (W05) was up by over 5% or steady compared to the previous week.
Due to the Red sea crisis, the rate fluctuation for EU will be relatively large compared to the US in the next three or four weeks.

HKG-EUR Forecast $ 3.9 - 4.2 in Q1 2024, $ 3.5 - 4.3 in Q2 2024, $ 2.9 - 3.5 in Q3 2024
External geopolitical factors such as the Red Sea crisis can act as an additional variable in the forecast

Global air cargo demand continued to grow slowly until Nov 2023, but it continued to weaken compared to Nov 2019.
The demand for international airfreight increased by 8.1% (vs Nov ’22) and decreased by 3.3% (vs '19).
The supply of international airfreight increased by 11.6% (vs Nov '22) and increased by 3.3% (vs '19).

[Asia] E-commerce volume drives demand for air cargo from/to China
- China's Ministry of Commerce announced in its official data that the volume of e-commerce from China in the first three quarters of ‘23 was 1.7 trillion yuan (about $230 Billion) in terms of amount.
- Currently, there are more than 100,000 e-commerce businesses in China, and the amount of imports and exports has grown tenfold in the past five years (1/26, China daily).

[Europe] End of the partnership between CMA-CGM and Air France-KLM
Through Joint Venture, the two companies sought cooperation, including joint operation of cargo planes. However, it was announced that it was not possible to derive optimal results due to external factors such as regulations by the authorities. (CMA-CGM acquired a 9% stake in Air France, it is under a mandatory holding commitment until Feb 2025)

[Americas] LATAM Airlines announces its freight forwarding statistics for 2023
- On international lanes in Brazil, 60,000 tonnes were transported annually. Electronics and related parts, aircraft engines, pharmaceuticals, and fruits were analyzed to have a high proportion of transportation.
- The main export countries were Mexico, the United States, the United Kingdom, and Spain. The major importing countries were Peru, the United States, Chile, and Argentina.