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Market Intelligence [Nov. 2023] Logistics market review and outlook for Oct

Registration dateNOV 16, 2023

Economic Indicator

OECD Composite Leading Indicator (September)

America
99.1(0.1)
Europe
98.9(-)
China
100.8(0.3)
(Source : OECD)

In July 2023, OECD Leading Economic Indicators for the US and Europe continued to be in contraction, China continued expansion above 100 for 4 months since March.

※ 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

Manufacturing PMI (October)

미국
46.7(2.3)
유럽
43.1(0.3)
중국
49.5(0.7)
(Source : Investing.com)

Oct '23 US PMI index was 46.7, 12th consecutive months of contraction.
Europe contracted for 16th consecutive month at 43.1.
China rebounded to 50.2 in Sep after 5 months of contraction, but dipped in Oct to return to contraction

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

International Oil Price (WTI) (October)

International Oil Price (WTI)
85.5(3.6)
WTI is volatile amid uncertainty over war-torn geopolitical tensions and slowing global economic growth In Oct ‘23, WTI reached $85.5 per barrel, down -4.1% from the previous month
(Source : U.S. Energy Information Administration)

Logistics Market Trends

Ocean

Ocean

Container Freight Rate : SCFI (October)

Container Freight Rate : SCFI
941(15)
The SCFI composite pushed up for 2 weeks from WK43 with the support of capacity withdrawals Asia to Middle East, North Europe gained the most, which need further capacity management to keep sustainable
(Source : Shanghai Shipping Exchange )

Samsung SDS SCFI Forecast

Samsung SDS SCFI Forecast
The Composite Index forecasts 958-1,007 points for 1Q 2024
Freight forecast 1Q 2024 : USWC $1,612 / USEC $2,605 / North Europe $769
(Source : SamsungSDS Brightics)

Regional Trends

Asia
[Asia]
- CBER will be expired on 25 Apr 2024. 20%-50% of European carriers’ slots were placed in alliances, while for Asian carriers, the percentage was 70%-80%. So Asian carriers will be hit harder by CBER demise.(10/17, The Loadstar)
- FDI into Mexico reached a record $40 billion in 2022 driven by the nearshoring. It appears that Chinese firms are rerouting exports via third parties like Mexico to circumvent tariffs and sanctions imposed by US.(10/18, Freight Waves)
Americas
[Americas]
- Matson has reported “solid freight demand, despite the muted peak season” in Q3 for its niche China to USWC service. NRF expected moderate growth to continue as consumers focus on value and household priorities.(10/26, The Loadstar)
- Panama Canal is making drastic cuts of daily transit as drought worsens. Daily transits will be gradually reduced to 18 per day in Feb 2024. Larger containerships have already been forced to sail with smaller loads to across the canal.(11/01, Seatrade Maritime)
Europe
[Europe]
- Spot rate from Asia to Europe pushed up from 1 Nov ‘23, supported by THE Alliance’s removal of the FE5 service. Linerlytica warned gains in spot rates could only be sustained with capacity discipline as fundamentals remain weak.(10/31, Container News)
- SCA announced it would increase fees on northbound transits by 15%. Vessels deployed on Asia-Europe headhaul trades and Asia-North America eastbound trades via Suez are expected to see hefty cost increases.(10/31, The Loadstar)

Air

Air

Air Freight Rate: TAC Index (August)

TAC Index
HKG-EUR 4.11(0.39) HKG-US 5.27(0.56)
HKG-EUR ($4.11) up 3 months in a row, HKG-US ($5.27) up 3 months in a row, now in the $5s since April.
SHA-EUR ($3.85) up 3 months in a row, SHA-US ($5.05) up 3 months in a row, now in the $5s since March
(Source : TAC Index)

Samsung SDS TAC Forecasting

Samsung SDS TAC Forecasting
HKG-US forecast $4.8 - $5.3 in the 4Q of ‘23, $4.6 -$5.0 in the 1Q of ’24, $4.3~$4.7 in the 2Q of ‘24
HKG-EUR forecast $3.8 - $4.1 in the 4Q of ‘23, $3.3 ~ $3.5 in the 1Q of ‘24, $3.7~$3.9 in the 2Q of ‘24
(Source : SamsungSDS Brightics)

Regional Trends

Asia
[Asia]
- Asiana Airlines’ board of directors held a meeting on 11/2 and agreed to the proposed separation and of Asiana’s cargo business, which will be included in the remedies plan that Korean Air will submit to the EU competition authority, the European Commission. Watch to see if the EU’s “concerns about restriction competition on European cargo routes” are resolved and the merger of the two airlines accelerates. (Nov.2, NoCut News)
- Malaysia’s Teleport has announced a new partnership with VietJetAir Cargo to mutually expand their networks, combining Teleport’s largest Southeast Asian air cargo network of more than 80 destinations with VietJet’s global air network. The agreement comes as Vietnam is clearly growing as a major market in Southeast Asia, and with more and more manufacturing lines moving to the country in recent years, volume growth is expected(11/4, Asian Aviation)
Europe
[Europe]
Kuehne+nagel (K+N) France has inaugurated a new air logistics hub within Cargo City at Paris Charles de Gaulle Airport. Heiko Schuhmacher, regional head of air logistics Europe, commented: “The inauguration of the new hub, located at one of Europe’s best-connected airports, reinforces Kuehne+Nagel’s leading position in air logistics and strong ambition on our healthcare focus, as part of our Roadmap 2026.”(10/20, Air Cargo News)
Americas
[Americas]
The three large US airlines posted strong revenue gains in their core passenger business for the third quarter, and although their cargo revenues contracted by a third, their division heads are upbeat on Q4.(10/23, The Loadstar)

National Holiday Calendar (Nov.)

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

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