A word from GPLN: Newsletter Issue 78 / Jan-Feb 2021
We hope that you are all healthy and have started the New Year well and that this will be a successful year for all of you.
The global freight forwarding market experienced last year its most challenging year to date amid the Covid-19 pandemic, contracting 9 percent year-on-year. Looking back at 2020, the reduction in both air and sea capacity also significantly disrupted global supply chains. However, it is expected to rebound and that government stimulus programs will support investments, especially in renewable energy. Many logistics providers believe that the gas-fired power generation sector, in particular, will provide substantial new business opportunities over the next few years, as will the maintenance and modernization of existing installations.
With promising developments in regards to Covid-19 vaccines, the International Monetary Fund (IMF) has revised up its outlook for 2021, predicting that global trade will reach almost pre-pandemic levels next year. Industry analyst Transport Intelligence (TI) believes that the underlying GDP and trade growth dynamics will have a swift recovery in the freight forwarding sector. The airfreight forwarding market is expected to grow at a compound annual growth rate of 5.6 percent over 2021-2024, and the ocean market should see a 5.2 percent growth over the same period.
Delays, lack of space and a surge in tariffs is plaguing the liner shipping market. While the current situation is causing problems for shippers and forwarders alike, there are opportunities for the breakbulk and multipurpose shipping sector. Unprecedented demand out of Asia and a shortage of empty containers as a result of blank sailings are contributing to the situation, which has forced forwarders and shippers to accept new surcharges in addition to general rate increases. As container carriers focus on their traditional cargoes, at least for the short-term, various breakbulk cargoes are finding their way back into the holds of the multipurpose fleet. In some cases, these ships have even been loaded with containers and bulk.
In other news, Saudi Arabia, along with the United Arab Emirates, Bahrain and Egypt which had also imposed an embargo on travel and trade, agreed to lift the restrictions at a Gulf Cooperation Council summit in January and announced that they reopened also their land borders with Qatar, marking a major step towards resolving a three-year diplomatic crisis that saw the latter’s neighbors sever ties and suspend all land, air and sea links. Qatar has emerged from the crisis seemingly unaffected, especially in regards to the country’s project logistics industry. The political impasse had ramifications on trade lanes, but challenges were quickly overcome with new sourcing strategies.
Furthermore, January 2021 marked a new era for trade across Africa as countries opened their markets under the African Continental Free Trade Area (ACFTA) agreement. Several years in the making, the agreement has been ratified by 36 African nations, to date. Since its inception, the agreement has been lauded as a way to boost Intra-African trade, promote industrialization, create jobs, and improve competitiveness of African industries on the global stage.
At the time of writing, we still don’t know whether the Breakbulk Europe event in Bremen will be moved to a later date this year. However, considering the slow Covid-19 vaccination programs in various countries and consequently also prolonged travel-, entry and in-person meeting restrictions we can’t imagine that this event will take place in May, as it is the case with our upcoming AGM which was scheduled alongside this event. Due to this fact we have also secured space in autumn 2021 at the same venue hotel in Bremen, the Dorint Park Hotel. More details will be announced in due time.
Best wishes for 2021. Please stay safe and healthy!
Your GPLN Team
|New GPLN Members / Jan – Feb 2021
||Holleman Bulgaria OOD
||Seashell Logistics Pvt. Ltd.
||CF&S Poland Sp. z o.o.
||STA Logistic Ltd.
||Green Worldwide Shipping, LLC