Ocean Update

June marks the start of summer peak period for cargo moving from Asia to Europe, looking to reach the continent ahead of China’s Golden Week national holiday and subsequent factory closures. To help ensure predictability, as well as inventory planning and forecasting for customers, our teams are working on increasing the flexibility of ocean and landside networks. Find out how flexibility can help build a buffer and direct cargo to your desired market at a later date.

June marks the start of peak shipping season ahead of Golden Week

In this period, being prepared is key for achieving a competitive advantage – giving you enough production lead time, buffering inventory planning and forecasting, and ensuring restock options for goods customers will demand later in the year.

This will allow customers to capture higher margins and a bigger market share by having the right seasonal merchandise available at the right time.

Appropriate planning can help avoid the additional costs that come with stock disruptions, reducing the need for shorter production cycles or simply losing the opportunity to sell.

To minimise disruptions in our customers’ forecasting, lead times, and stock-up process, our teams continue to adjust schedules to make them more resilient to seasonal fluctuations and flexible through both ocean and landside networks. According to Sea-Intelligence’s schedule reliability report, Maersk continues to be the most reliable carrier, and we expect the trend to continue as schedule adjustments take place in the coming weeks.

Key Ports Update

As we move into summer, European hub terminals are operating smoothly with stable productivity and density. After assessing capacity and demand, we expect to see a stable service to our customers, even with potential labour reductions during holiday season. In the past months, our teams have focused on bringing back a healthy performance on each service through adjusted proformas, which are expected to go live this month. Together with increased terminal productivity, the adjusted schedules will enable further reliability improvements.

Ahead of the summer peak season, some areas – such as the Adriatic – are seeing a significant uptake in import volumes, and our teams are working on finding solutions to ensure a smooth flow of cargo.

Europe terminals are showing a stable performance and productivity

In Turkey, Port of Ambarli remains running despite facing congestions from inbound cargo. To help alleviate the situation, customers are kindly asked to pick up longstanding containers and import containers as soon as possible upon discharge. The tests to the Port of Iskenderun that ran in the past months were successful and we are looking to slowly start increasing inbound and outbound flow of cargo and clear the longstanding backlog from Port of Said.

In Oman, Port of Salalah is heading into a two-year construction work period that will see the terminal expand and improve its operational efficiency. During this time, customers may see different routings than usual, but can expect the same level of service. We will keep customers informed of any changes as soon as possible.

Air Freight Update

European air freight demand levels continue to be difficult to predict, but we officially saw demand drop by 10.6% in the first quarter of 2023 compared to 2022 as a result of geopolitical and economic factors. However, global capacity has increased by 4.7% in 2023 compared to 2019 and is starting to pick up, according to recent data from the International Air Transport Association (IATA).

This positive trend is expected to contribute to increased capacity in the air freight market, with major Middle Eastern airlines strategically investing in response to the growing demand from China and expanding their air cargo capabilities following revised Covid-19 restrictions. A general increase in demand and the approaching summer season are leading to higher PAX frequencies for many airlines.

European air freight demand levels continue to be difficult to predict

Rate trends also continue to fluctuate based on the country of origin. While some countries experienced rate reductions due to diminished supply chain pressures, others observed little to no year-on-year rate changes. This is due to unpredictable shifts in demand and supply dynamics, coupled with soaring fuel costs. Fuel prices also lack consistency, with recent increases stemming from declining U.S. crude oil inventories and discussions surrounding the U.S. debt ceiling. Currently, the average price for jet fuel stands at 2.2 USD per gallon, as per IATA.

To further decrease the aviation sector’s contribution to CO2 emissions, development of low-carbon fuel is increasingly gaining traction.

Maersk is continuing to monitor the latest innovations and remains fully committed to decarbonising logistics, with a net-zero goal by 2040.

To learn more about our air services and see how Maersk Air Freight can support your logistics needs with a network of our own controlled flights, click here.

Inland Update

Last summer and its rising temperatures saw water levels on the Rhine fall below operational levels. Rhine water levels are expected to fall once again and pose challenges to barge operations this year.

As an alternative to barge transportation, Maersk teams are working on securing rail and truck coverage

Our teams are working on analysing the potential impact this will have on our customers’ supply chains and working on securing alternative coverage via rail and truck where needed. We will continue to closely monitor the situation and keep customers informed of any developments.

The beginning of the year saw frequent strikes across a number of industries and services in Germany, however the latest proposed action has been cancelled due to an agreement being reached between the unions and employers.

Our teams continue to monitor the situation and focus on keeping our customers’ supply chains moving. Read our latest update here.

E-Commerce Update

Efforts to reduce packaging waste are coming from the European Commission, with a new target that aims to reduce packaging waste by 15% per capita per member state by 2040, compared to levels in 2018. To help achieve this goal, businesses will need to reduce packaging weight and volume to the minimum necessary for ensuring functionality, as well as eliminate unnecessary packaging such as single-use wrapping. By reducing air and unnecessary packaging in parcels, businesses will improve loading capacity and utilisation of trucks, resulting in reduced cost in the last mile of the supply chain.

E-commerce businesses will need to reduce air and unnecessary packaging in parcels

To ensure compliance, businesses will need to re-use and recycle packaging, meaning they will need to not only procure sustainable materials, but also supply them into the ecosystem and establish appropriate supply chains to accommodate these activities.

As re-using packaging will make returns easier, it is expected that businesses will also see an increase in the return rate. Read here how you can turn returns into a competitive advantage for your business.

Elsewhere, European cross border e-commerce market saw an increase of 4.8% last year compared to the previous year, reaching 179 billion Euros.

While the trend of cross border e-commerce has been around for a while, it continues to grow, creating both opportunities and challenges for online businesses. Opportunities from an increased market reach, higher sales through a broader, international customer base, non-season demand throughout the year and higher visibility of your brand need to be balanced with the challenges of changing regulations and optimising supply chains for last-mile delivery and returns. Read more about what you need to know to address the challenges of cross border e-commerce in Europe.

To learn more about our integrated solution for your parcel supply chain across Europe, head to the E-Delivery portal here.

Customs Update

In April, the UK Government released a draft of the Target Operating Model (TOM) update for Sanitary and PhytoSanitary (SPS) controls that outline the digital and practical approach to SPS controls for goods entering the UK from the EU starting October 2023. While these controls will initially apply only on goods coming from the EU, they will later include the rest of the world. Based on the country of origin, animals, animal products, plant products, high-risk food, and feed not of animal origin will be categorised as low, medium, or high risk. Some low-risk items will not require health certification, and certain plant products will not require any pre-notification, making customs clearance easier. As the model is still a draft, updates will be made every six months and our teams will continue to monitor the changes in regulations and what they mean for our customers.

Maersk Europe Market Update analyses latest developments in supply chains

Starting 19 June, the Developing Countries Trading Scheme (DCTS) will replace the existing UK GSP preference scheme.

The new DCTS covers a wider range of commodities, has more liberal origin rules, and applies to all countries that fall under the current GSP, with three different regimes that are determined based on each country’s status according to the World Bank (Comprehensive, Enhanced, and Standard).

For customers, the procedure for DCTS remains largely the same, requiring an origin declaration or Form A.

For origin statement, there is no specific wording except confirming the goods meet the DCTS origin requirements.

The Free Trade Agreement between the UK and Australia and New Zealand that took effect at the end of March saw majority of items liberalised without imposed duties. At the moment, certain goods still fall under "graduation," where the full preferential benefits are gradually realised over time, while a waiver exists for low-value items under AUD 1,000. As with DCTS, there is no specific format for the origin declaration under the Free Trade Agreement.

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