Posted on November 29, 2023
Aiming to provide relevant and up-to-date information to help you navigate your supply chain.
Ocean Updates
Transatlantic & Transpacific Services
Europe
Effective January 1, 2024, the Europe Emissions Trading System (ETS) surcharge will apply to all cargo originating from or arriving at an EU-operated port.
The ETS is intended to assist Europe in achieving its goal to become the first climate neutral continent by the end of 2050 by introducing a price for all greenhouse gases being emitted in this sector. For a detailed explanation of this surcharge, reference this explainer video.
As we transition into the winter season for North Europe to the USA and Canada, low water levels may pose operational constraints, potentially impacting our loading ability. However, currently, we do not anticipate any impact on our ability to load contracted volumes on all services. Rest assured, we will promptly communicate any changes and provide ample warning if the situation evolves.
We have space available on all six Europe to North America services. In cases where additional space is required, we can accommodate bookings over-allocation to meet our customers’ needs effectively.
Asia
We have observed notable improvements in schedule reliability compared to the previous month for both the West Coast and East Coast. The average number of days delayed across our services shows a downward trend, indicating our commitment to providing timely and dependable transportation.
However, there are still some waiting times in Savannah (2-3 days) and Houston (2-4 days). Looking ahead, we will continue to operate extra loaders with service to the East Coast throughout the remainder of the year. Additionally, we have scheduled additional departures in January to accommodate your evolving needs.
India, Middle East & Africa
Despite the challenges faced by the industry, we have maintained a stable overall volume without the need to induce blank sailings. This stability extends to our network as well.
Following industry trends, we have announced a General Rate Increase (GRI) effective December 1 for the India and Middle East markets. We strive to keep our pricing competitive while providing the necessary services to meet your business requirements.
It is important to note that we are experiencing port productivity issues in South Africa due to operational challenges and adverse weather conditions. We are actively addressing these issues to minimize any impact on our network and ensure smooth operations.
In other news, the cocoa season in our West Africa market is in full swing, and we are pleased to report that the overall volumes are looking strong. However, we have observed a weak demand in our East Africa market, particularly in the garment segment, which has yet to show signs of recovery.
Please note that the information provided is subject to change as market conditions evolve. We will keep you updated on any significant developments in future newsletters.
To receive the latest updates on your cargo, sign up for ETA notifications or check schedules on Maersk.com. For operational updates in our “Weekly Reader,” subscribe to our advisories at www.maersk.com/newsletter.
Panama Canal
At the end of October, the Panama Canal Authority (PCA) announced new limits likely to lead to fewer than 24 crossings a day this month. As of February 1, 2024, until further notice, the number of booking slots will be reduced to 18 per day. Currently, Maersk continues to be able to secure timely canal transits in support of our customers. We are taking necessary precautions to minimize any potential impact on our operations, including:
- Collaboration with the Panama Canal Authority to secure the necessary transit slots. By scheduling transits between 30 and 14 days before arrival, depending on vessel size and direction, we aim to safeguard our transit schedule.
- Constantly reviewing and modifying our internal procedures to align with the Canal’s revised booking requirements, guaranteeing that we can obtain the necessary transit slots to minimize any disruption to our customers. Furthermore, we assess the weather conditions and waiting times at prior ports to determine a transit date that harmonizes with our schedule and guarantees a seamless passage through the Canal.
- We have continued access to limited rail connectivity, enabling an alternative container transportation option between the Atlantic and Pacific gateways.
For the most up-to-date information as the news in the Panama Canal develops, please visit our advisory page on this subject.
Ocean & Air Operations in Israel
We continue to keep a close eye on the ongoing situation in Israel. Currently, port operations across Israel’s major terminals are functioning normally. We are not expecting a substantial impact at our key hubs in Ashdod and Haifa, and bookings will, therefore, continue to be accepted. For the most up-to-date information as things develop, please visit our advisory page, including FAQs.
Maersk air freight operations in Israel are continuing to be monitored by our teams, but at this time we are not seeing a significant impact to our customer offering. Although a number of airlines have cancelled flights to and from Tel Aviv, a lot of our partner carriers are continuing to use the airport and cater to air freight demand.
We are unable to charter our own tailored flights for customers to and from Israel given the ongoing situation until further notice. To stay up to date with the latest information, please head to our dedicated advisory page on this topic.
E-Commerce Update
Peak holiday shopping season
With the ongoing peak holiday shopping season, consumers are showing a lack of urgency in purchasing items from their shopping lists. According to Salesforce’s Shopping Index data, retailers worldwide maintained consistent discount levels in the third quarter. In response, shoppers adopted a cautious approach, similar to the previous quarter, as they patiently awaited price reductions.
During Black Friday, consumers spent a record of $9.8 billion online, according to data from Adobe Analytics. That’s up 7.5% from last year.
This indicates that consumers are actively researching products online and, in some instances, opting to purchase in physical stores. This trend is a good sign for retailers, as online research suggests that shoppers intend to buy, just not at the current prices. It could also indicate that shoppers are waiting to purchase from their preferred retailer or brand, having previously switched due to factors like product availability and value.
A.I. is projected to impact global online sales significantly, estimated at approximately $194 billion during the holiday season. Generative AI is capturing consumers’ attention, with a growing number of individuals eager to participate.
You can learn more about how e-commerce dominates holiday shopping in the U.S. by listening to the Maersk “Beyond the Box” podcast episode entitled, “5 ways supply chain peak season has changed – is your business prepared?”
Warehouse & Distribution Update
Takeaways from Retail Value Chain Federation
Maersk representatives traveled to Scottsdale, Arizona, earlier this month, joining thousands of logistics professionals for the 24th annual Retail Value Chain Federation (RVCF) conference. The event provides a unique opportunity to learn about the latest developments in the retail supply chain to streamline operations, improve execution, and accelerate time to market.
At this year’s event, Maersk executives took to the stage to share their views on utilizing innovation and technology to unlock the supply chain while providing insight into how companies can advance their technological ecosystem to increase profitability and improve efficiency.
Scott Weiss, Head of Warehouse and Distribution Services in North America, shared these top-of-mind customer questions along with the answers below.
How might you be partnering differently with customers today to improve service and use technology and innovation to do so?
From artificial intelligence to digital twins to predictive global supply chain modeling, Maersk is utilizing exciting technology innovations to support our valued customers.
We believe in ‘co-creation’ regarding innovation with our customers. We engage customers early to identify the problems and build solutions from proof of concept to scaling.
What is the most critical challenge affecting our customer’s supply chain today?
Unpredictability in the global supply chain. As an asset-based, one-stop shopping global provider, Maersk is focused on reducing transit time variability and delivering a reliable supply chain to our customers. This is one of the reasons why we embarked on a one-year-long project with MIT to build a machine-learning algorithm for predictive and prescriptive ETA analysis. We call this tool ‘dynamic routing.”
What are some examples of recent modernization and innovation work Maersk has done in supply chain technology or supply chain automation?
Dynamic Routing:
We are building a prototype dynamic routing tool that includes three layers of capabilities:
- Visualization of the cargo’s end-to-end journey
- Predictive ETA analysis
- Real-time prescriptive recommendations in case of delay
Digital twin data for predictive analysis in the warehouse:
- Predictive maintenance: we installed sensors on our sorters to monitor the vibration and temperature.
- Cargo unloading time prediction: we deploy computer visualization technology with machine learning methods to predict the time of unloading of containers.
- Jam prediction: computer vision of how the carton is placed on the sorter, and predict which ones will cause a jam on the sorter and pre-alert our operators to take action before the entire sorter is down due to the jam
Catch Scott Weiss’ commentary at RVCF on what customers need.
Photo caption: Panel participants: Michael Presley, SAS; Ben Barras, SAS; Ryan McGuire, JCPenney Marty Hahn, GNC; Scott Weiss, Maersk.
Product Spotlight: Duty Drawback in Customs
Do you know the potential savings your business can unlock through a Duty Drawback solution? Maersk Customs Services offers this program to help eligible participants reclaim customs duties, taxes, and fees paid on imported goods that are later exported, rejected, or destroyed. It’s a valuable opportunity to recoup up to 99% of the amount spent on eligible goods.
Surprisingly, more than $2 billion in Duty Drawbacks, representing 85% of eligible refunds, go unclaimed annually. Many companies miss out on these savings because they are unaware of their eligibility, underestimate their potential returns, or believe the process is too cumbersome. In today’s economic climate, it’s crucial to recognize such an opportunity for cost reduction.
Even if you are not a Maersk Customs Services customer, we can still assist you in exploring if you qualify for Duty Drawback and determining if the program aligns with your needs. Reach out to us today for a complimentary Duty Drawback consultation. We are here to answer any questions and guide you through the process.
Topics, Trends, and Insights
Topics on many shippers’ minds: nearshoring and sustainability investment
By Narin Phol, Executive Vice President for North America
Follow Narin on LinkedIn
Earlier this month, I had the opportunity to join some of my peers at the Houston International Maritime Conference to discuss various topics and challenges that are on most shippers’ minds heading into 2024. And since not all of you were able to join, I thought I’d share two themes I found interesting.
First, nearshoring was a hot topic. Global research Maersk conducted with Reuters showed 67% of global retailers and manufacturers said that global disruptions have changed where they source materials and components from.
These disruptions, and the associated delays, are causing customers to shift from cost-cutting and toward lowering risk and shortening supply chains to increase speed and flexibility. In fact, the research concluded that when looking at primary reasons for changing sourcing strategies among retailers and manufacturers, reducing cost of transit sits at a low seventh place, only 38%.
Nearshoring is a resulting trend that will continue to influence supply chain strategy, and it makes sense in theory: it’s cheaper, more reliable, and more flexible in meeting local demand.
But nearshoring comes with its own challenges. Shippers need to find strategically central locations that have the right labor force, a relatively stable geopolitical environment, good infrastructure, and proximity to markets to ensure the change in strategy pays dividends.
Mexico is a good example. At Maersk, we’re seeing many of our customers with global supply chains making direct investments in Mexico. So, for us, we’re very focused on building logistics bridges to connect these customers’ global operations with regional solutions.
And because in this model, suppliers are further away from assembly points, we’re very invested in offering integrated logistics to our customers, so they have operational visibility as well as the ability to adapt to any contingency.
Another theme was sustainability, and in particular, what supply chain leaders should be doing to prepare their own bosses on how to navigate this rapidly changing landscape.
Sustainability is now a strategic imperative – and both consumers and our customers demand more sustainable business practices. According to research, 83% of consumers think companies should be actively shaping ESG best practices.
For ocean shipping, the fact is that green fuels are still more expensive than gray fuels. We’re advocating for global regulation and a carbon tax to level the playing field and make green options more economically viable, which will eventually drive down the cost. But in the near term, cargo holders will need to start budgeting more for ocean shipping – either to pay the emissions penalties or to invest in green solutions.
