Ocean and Key Ports Update
According to the company’s website news release on October 13, 2022, after several challenging months across Europe, the past couple of weeks have brought much-needed stability and resilience across the company’s global network.
Close cooperation with ports, combined with contingency planning and schedule changes have resulted in improved congestion levels, berth waiting times and port productivity across the region.
The significant improvement of the company’s service delivery figures has put the company’s reliability and service levels at the top of the industry. While schedule reliability continues to increase, the company will continue to monitor bookings and follow the demand with positioning to ensure minimal impact to customers. Despite this, some concerns remain regarding yard density and longstanding containers.
To limit delays and help maintain terminal operations at a feasible level, the company kindly requests you to please continue picking up full import containers or requesting dispatch as swiftly as possible after discharge.
Water levels across the Rhine have also posed challenges in recent months, but as of 1 October, the low water level situation has ended for all areas. This has eliminated delays in barge transportation and helped stabilise rail and truck transportation, which is expected to continue to normalise in the coming period.
Ocean update
Two rounds of strikes in the UK ports of Liverpool and Felixstowe have caused some disruptions to schedules, but Maersk teams have established contingencies and revised schedules to maximise labour immediately after the strike. At the Port of Liverpool, another strike action has begun on 11 October and is expected to end on 17 October. The company’s teams continue working on contingency planning and further information can be found here.
Along with Golden Week, inflationary pressure and lower consumer demand across the board, a series of service adjustments have been activated on Asia-Europe trade in order to balance the supply and demand. While product coverage will be impacted by these changes, the program will help improve terminal and schedule recovery, which have been the key barriers for global supply chains.
October is typically where the company sees the start of the reefer export peak season, which lasts through to early in the following year. This year is no different, and the company has focused on ensuring that the right levels of equipment and capacity are in place to support the peak for customers. In line with the improving operational situation in Europe, the company looks forward to supporting a strong peak season over the coming months.
Although the situation is improving across the ocean network and at ports in Europe, there are still a number of supply chain challenges that the company’s customers are tackling. The company's teams are here to support you on your journey, so please don’t hesitate to reach out to your local Maersk representative if you require any assistance.
Air Freight Update
Globally, the Air Freight market continues to be fairly volatile, with volumes trending down but rates remaining higher than 2019 levels due to jet fuel costs, lack of passenger/belly capacity and the impact of the war in Ukraine.
As inflation in Europe reached an all-time high of 9.1% in August, the spending power of the general population was impacted heavily – with lower sales and higher inventory across many sectors, most prominently retail and manufacturing.
Elsewhere, flight cancellations due to lack of staff at airports has led to an increasing dependency on cargo aircraft, plus the Asia to Europe trade lane is highly affected (-20% YTD) thanks to COVID policies, inflation, capacity reductions and other factors.
Despite this, Europe outbound is stable and growing slightly, seeing increases across lifestyle, FMCG, and pharma sectors.
The future is uncertain as the company moves into the winter months. A European energy crisis is imminent according to experts, with the energy and chemical sectors set to be most affected. Russian and Ukrainian airspaces still remain closed and there are no signs on when this will change.
Maersk will continue to monitor the situation and use its own controlled air freight network to keep supply chains moving. Although improved ocean freight conditions have reduced Air demand slightly, the need for a reliable alternative is expected to remain high across Europe during peak season.
For more on the company’s air network and expansion, click here.
Inland Update
Inland transportation across Europe continues to be pressured, with strike action and cancellations causing disruption to rail services across the continent. These issues are having a knock-on effect on an already stretched trucking industry, where the driver shortage and fuel price increase problems are ongoing.
However, recent improvements to the ocean network have taken some strain away from inland operations, which were called upon to alleviate congestion at ports. The company’s teams will continue to assess the situation on the water, ready to procure additional landside transportation throughout Europe if required.
Inland update
To add resilience to customer supply chains and combat potential future disruption, Cross Border Rail solutions are being developed in Europe via two main corridors: from Turkey to Northern Europe and an ad-hoc solution between Spain and Northern Europe.
Plus, at the end of October, a new, environmentally friendly rail product for reefer cargo from Valencia to London will officially launch – easing supply chain bottlenecks and delivering fruits and vegetables for Spanish peak season. Read more about the Sealand service here.
Sustainable rail solutions will continue to be a priority for Maersk and the company’s customers moving forwards, so the company will be analysing where the company can open more long-haul rail products with a reduced carbon footprint across Europe in the coming months.
E-Delivery Update
As the company approaches what’s traditionally a peak period, a question on many customers’ minds is whether “to peak or not to peak”. After the pandemic and rapid e-commerce sales growth, the company is now facing consumer hesitation and fast-changing market conditions, such as rising cost of energy, that could interfere with the traditional peak season.
This uncertainty is making businesses question whether to start their peak season preparation sooner or later. Some are reluctant to start, while others are taking actions earlier than ever before in the hopes of getting a share of the consumer wallet before the cold weather shifts spend towards energy. Besides the cold weather, the last quarter of 2022 is also expected to bring a technical recession in Europe, that would continue in the first quarter of 2023, as per the European Central Bank.
To cope with the changing conditions, businesses need to focus on building resilience across the supply chain.
Resilience is more than being able to speed up the supply chain during peak season, it is also being able to slow down when the demand decreases, and having a wide range of transportation options, should one face a disruption. Read more about how e-commerce businesses can overcome supply chain disruption.
With that in mind, Maersk E-Delivery teams are working on expanding the company’s offering to support the company’s customers in saving time and costs and making their supply chains more resilient. This includes increasing the company’s PUDO (pick-up drop-off) locations to boost last-mile efficiency, growing the company’s carrier network to reduce costs to customers and supporting the company’s customers in sustainable delivery.
Looking ahead, the company advises the company’s customers to start planning 2023 budgets early, to ensure cost-efficiency of last-mile deliveries and the resilience of their supply chains. To get started, visit our Europe E-Delivery portal.
Customs Update
Customs continues to be an area that businesses are placing under the microscope in order to add more resilience and predictability to their supply chains in the face of potential future issues.
We are seeing a new level of importance placed in customs compliance and strategies, as the need to be one step ahead in terms of compliance and planning becomes apparent. With this in mind, the company’s customers may need to prepare for a new sanction package imposed against Russia.
Customs update
New import and export bans came into effect on 6 October 2022. This, the eighth package of economic and individual sanctions, will extend already imposed sanctions.
The new sanctions restrict Russian import products such as steel, plastics, wood, pulp and paper, vehicles, textiles, footwear, leather, ceramics, cosmetics, certain chemical products, cigarettes and non-gold jewellery. Additional export restrictions are also imposed to reduce Russia's military, technological enhancement and defence sectors. For more information click here.
Maersk Customs Services will continue to monitor the situation and notify customers of any changes as soon as possible.
We will also continue to support the company’s customers in navigating the current situation by offering global customs clearance and ready-made customs solutions controlled from one place – adding visibility and predictability to their supply chain operations.
