Cargo Growth Forecasts Drastically Reduced By Freightos
Freightos, the Israel-based online freight booking platform, has slashed its growth forecasts due to declining cargo volumes and freight rates, with revenue expected to grow between 15% to 21% this year, down from an earlier forecast of 87% growth. CEO Zvi Schreiber cited global economic conditions and lower trade demand as substantial headwinds, with revenues for 2023 predicted to be $22.3 million to $23.6 million, a steep reduction from the initial forecast of $39.5 million. Despite this, Freightos officials say the platform is insulated from some of the wider industry pressures due to continuing carrier additions and new shipping customer sign-ups.
New Report From ShipStation Reveals 72% of Surveyed Merchants Plan to Cut Shipping Costs To Grow This Year
ShipStation’s 2023 Consumer and Merchant Benchmark Report reveals that consumers are becoming more price-conscious, prioritizing cost of delivery over speed, and valuing a smooth returns process. In response, the report urges merchants to optimize pre- and post-purchase experiences amid economic uncertainties. Key findings show that 64% of US consumers see inflation as their biggest financial concern, 61% are less likely to shop with a brand with high shipping costs, and 44% avoid brands with a difficult returns process. The study suggests merchants should focus on enhancing the customer experience, streamlining operations, and expanding their reach to ensure growth.
Lockdown in Shanghai from March 28 up until April 5
Shanghai’s lockdown, conducted in two phases, has led to significant disruptions in the logistics process. Employees and local airline and shipping staff are working from home, causing potential delays in cargo handling and documentation. Airfreight imports and exports face limitations and delays, while sea freight imports for FCL remain largely operational. LCL cargo, however, cannot currently enter the Shanghai port, with Ningbo as an alternative gateway. Teams are working on alternative solutions and continue to coordinate freight operations, but customers should expect delays and disruptions in the logistics process during the lockdown period.
Ocean Freight Market Update
Transpacific Eastbound (TPEB) carriers are eyeing general rate increases (GRI) for April 1st amid a low-volume market. Capacity and demand are expected to remain stable through the end of March, with routine blank sailings persisting. Vancouver sees stable vessel dwell counts and berthing delays. Rates are soft, and space and equipment are open. It is recommended to book at least 2 weeks prior to the cargo ready date (CRD) and consider upcoming blank sailings.
In Asia → Europe (FEWB), demand and supply are more balanced after blank sailings following the Lunar New Year (LNY). Booking intake is gradually improving, but rates remain under pressure. Around 10-20% blank sailing average is expected in the coming weeks as carriers adjust for decreased demand. To accommodate anticipated congestion and delays, it is recommended to allow flexibility when planning shipments.
Europe to North America (TAWB) sees low demand and widely available space, with capacity outstripping demand expected to continue. Rates are dropping as vessel utilization has decreased to 65-70%, and easing congestion is making space available for the U.S. East Coast (USEC) and U.S. West Coast (USWC). Equipment availability is improving as congestion lessens, and low empty stacks at inland depots are also improving in some areas. It is recommended to book 2-3 or more weeks prior to CRD and request premium service for higher reliability and no-roll.
1 . Capacity is currently available across all major services, with no significant space constraints on routes to the Asia Pacific (APAC) region. North American container yards have mostly cleared congestion, and equipment is readily available in most major markets. As Q1 comes to a close, existing capacity is expected to remain largely in place, with carriers making minor adjustments to vessel capacity across trades.
Rate pressures are trending slightly downward on certain lanes from coastal ports to Asia base ports, with carriers seeking volume opportunities. Capacity and equipment remain stable, but inland shippers should monitor IPIs for potential low chassis availability. It is recommended to book 1-2 weeks prior to CRD on coastal to Asia-based port lanes and 2-3 weeks prior to CRD on inland to Asia and feeder port lanes.
2. Capacity from the USEC is available, with services from the USWC and Gulf remaining tight but stable. Most USEC to N. Europe (NEU) and Mediterranean (MED) services have low capacity utilization levels and no space constraints. Gulf Coast to NEU and MED services have medium to high utilization levels due to the reintroduction of capacity, while USWC to NEU and MED services have limited options and high utilization levels. Rates have trended slightly downward QoQ on USEC to NEU lanes, remaining flat after early Q1 adjustments. Gulf and USWC rates have not been adjusted in Q1, but carriers are open to deals for USEC opportunities.
Space is open from the USEC, manageable from the Gulf, and limited from the USWC. There are no major capacity changes or equipment hurdles in the US market, aside from potential chassis issues in IPIs. It is recommended to book 2 weeks prior to CRD on all EC to NEU and MED lanes, 3 weeks prior to CRD on all Gulf to NEU and MED lanes, and 4 weeks prior to CRD for all PSW to NEU lanes.
Air Freight Update
Despite the erratic market conditions of the past few years, analysts anticipate sustained expansion in the air freight industry. Forecasts from market researchers indicate that the sector will expand at a CAGR of 5.7% between 2023 and 2028, resulting in a market size of $413 billion in 2028, an increase of $125 billion from 2023.
In Northern China, TPEB demand and rates are decreasing, while the FEWB market experiences increased demand and rates. Southern China sees a tight TPEB supply with increasing demand and rates, while the FEWB market follows a similar trend but at a slower pace. In Taiwan, the market picks up with increasing rates and tighter capacity. Korea experiences stable rates and demand, while Southeast Asia witnesses increasing TPEB demand and rates in northern Asia, tightening hub capacity, and a stable FEWB market.
TAWB demand fluctuates between point pairs in the EU and UK, causing rate levels to increase and decrease week over week. Although sufficient capacity is available in the market, longer lead days for direct routing are expected, with indirect options via secondary hubs offering shorter lead days and better rates. No operational disruptions have been reported in the EU or UK. For all lanes, it is recommended to place bookings early to secure the best uplift options and routings and to consider deferred options via secondary hubs for potential lower rate levels.
Amazon will spend $200 million on safety technology across its transportation network in 2023
Amazon and Amazon Freight are putting money into safety technology to make crashes less common and less dangerous. This includes features such as automatic emergency braking, forward collision warning, stability control, lane-departure warning, side object detection, and more. Amazon has consistently led the way in safety advancements. Amazon sellers will be able to request higher limits based on a “reservation fee.”
Amazon Will Lay Off 9,000 More Employees In Addition To Previous Reductions
Amazon is laying off 9,000 workers across AWS, Twitch, advertising, and human resources, citing the uncertain economy and the need to streamline costs and headcount, according to a memo from CEO Andy Jassy. This follows a previous round of layoffs totaling 18,000 people last year and in January. The news comes shortly after Twitch CEO Emmett Shear resigned from his position, with 400 Twitch employees affected by the cuts as the platform faces challenges in user and revenue growth.
Forceget Digital Freight Forwarder is a leading NVOCC licensed global logistics company that specializes in parcel, air and ocean shipping. With offices in key locations such as the USA, China, Hong Kong, Turkey, Israel and Colombia, we are well-positioned to assist you with all your logistics and brokerage needs, no matter where you are located. We take care of all the complexities of international shipping, allowing you to focus on what you do best – competing in your local market. Additionally, we pride ourselves on being the number one Amazon FBA focused freight forwarder, ensuring that your products are delivered to Amazon warehouses in a timely and cost-effective manner. With Forceget, you can have peace of mind knowing that your global logistics needs are in expert hands.