General rate increases 📈 rough seas and a push towards digitalization

GENERAL RATE INCREASES

Carriers Increase Rates but will they hold?

Asia-North Europe ocean carriers have planned General Rate Increases (GRIs) next week, though evidence suggests only a portion will be sustained. Carriers are likely to reach about 50% of their 1st August Freight All Kinds (FAK) rate increases. Subsequent discounts on the GRIs are expected from mid-August. Xeneta's container spot rate for Asia to North Europe decreased 1.5% this week, averaging at $1,188 per 40ft, with some market rates dipping below $1,000.

All major lines mimicked Maersk’s 3rd July GRI advisory, announcing a minimum 40ft FAK rate of $1,900 from 1st August for the main North European hubs.

With peak season demand described as "subdued" and over 1.2M TEU of new tonnage scheduled for delivery by year-end, carriers must carefully manage their capacity to prevent further rate collapse.

Conversely, the Asia-US transpacific route exhibits signs of recovery, with the Freightos Baltic Container Index (FBX) recording a 12% increase in Asia-to-US west coast spot rates this week, raising the average to $1,526 per 40ft. The east coast saw a 3% increase, but west coast rates climbed due to industrial action at Canada's west coast ports.

On the transatlantic route, spot rate erosion persisted with the North Europe to US east coast rate falling 3% to $1,590 per 40ft, a 77% YoY decline.

VIDEO OF THE WEEK

Top 5 Most Expensive Container Ship Disasters in History

This weeks video follows the stories of 5 vessels, how they got into trouble and the financial burdens. 💰 💰 🔥 🔥

• ONE Apus (2020): 15-meter waves

• MSC Napoli (2017): Winds of 115 km/h

• MOL Comfort (2013): Extreme weather

• RENA (2011): Strikes a reef off New Zealand

• EVER GIVEN (2021): Blocked the Suez Canal

NEW ELECTRONIC TRADE BILL

UK Leads the way with Benchmark Electronic Trade Document Bill

The UK has become the first G7 country to adopt the Electronic Trade Document Bill, a move to digitise trade documents after receiving Royal Assent. This measure, in the making for five years, is anticipated to add over £1 billion to the UK economy in the next decade by enhancing efficiency and sustainability in trade.

UK's Minister for Tech and the Digital Economy, Paul Scully, emphasized that the container shipping industry's reliance on billions of paper documents annually incurs significant costs and environmental impacts. Nigel Huddleston, the Minister for International Trade also pointed out that this act will bolster efficient trade, reduce costs and contribute to environmental preservation.

The new law could result in a net benefit of £1.14 billion for the British economy over the next decade for global trading businesses. Chris Southworth, Secretary General of ICC UK, underscored the potential of the Act to transform global trade, making it cheaper, faster, simpler, and more sustainable.

Despite the law's enactment, digital trade documentation is not compulsory for UK businesses, as paper documentation remains a viable alternative. The law does provide momentum for the goal set by the 9 members of DCSA to shift towards electronic bills of lading. With the law now in effect, UK traders are encouraged to prepare for this digital transition, which is expected to start in 8 weeks.

GLOBAL TRADE SNIPPETS

Yellow Corp Shutting down after 99 Years: Yellow, the USA’s 3rd largest LTL carrier faces bankruptcy and reveals plans for a complete shutdown due to ongoing financial challenges. The closure marks a significant shift in the logistics sector, impacting employees and industry dynamics.

Bangladesh Dominating Textile Exports: Bangladesh's global market share in clothing exports has surged to 7.9%. The country's apparel industry continues to grow rapidly, consolidating its position as a major player in the international textile market.

Post-Brexit Delays and Red Tape: Post-Brexit commodity codes have lead to a significant increase in export times and red tape by at least 30%. The introduction of these codes has added complexities and challenges for exporters, impacting trade efficiency between the UK and the EU.

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