European Shipping Review and Outlook: A Two-Part Webcast Series (Part 1)

European supply chains haven’t had any time to reset this summer, and as the Asia-Europe trade heads into the peak shipping period, the strain is showing. Months of strong consumer demand have kept European imports surging, while COVID-19 measures have created labor shortages and bottlenecks at terminals at origin and destination ports, and vessel schedule reliability at European hubs is at record lows. Late arrivals are driving up congestion across Europe’s ports, absorbing available vessel capacity, and disrupting the onward carriage of cargo via the feeder and short-sea services, inland waterway, rail, and road.
Despite carriers’ poor on-time performance, rates are extremely elevated, soaring 800 percent in July above those in pre-pandemic 2019. On top of the high rates, carriers are charging thousands of dollars extra per container to guarantee space on vessels leaving Asia, with shippers reporting the cutting of agreed weekly allocations in a highest-bidder-wins-the-space environment.
This combination of record-high rates and record low service has created a toxic relationship between shippers and carriers and is leading to unprecedented levels of animosity. With the peak Asia-Europe shipping season kicking off, industry stakeholders face the prospect of continued disruption right through year-end as Europe’s economies reopen and pent-up demand sustains import volume.
This two-part webcast series will take a close look at the drivers behind the healthy imports and analyze the economic consequences of the pandemic on containerized trade into and out of Europe. Importantly, it will look at how deteriorating shipper-carrier relationships will play out. How much trust has been lost over the past year, and how will that change the way cargo contracts are structured? Container terminals and the inland logistics chain have been maxed out for months, but how long can the system continue to run at full speed? Finally, what can Europe’s importers and exporters expect in the year ahead?
9:00-9:05 AM ET Welcome Remarks
Session Chair: Greg Knowler, Senior Editor, Europe, JOC, Maritime & Trade, IHS Markit
9:05-9:35 AM ET Challenges of Adding Value in a Highly Unstable Market
Session Chair: Greg Knowler, Senior Editor, Europe, JOC, Maritime & Trade, IHS Markit
Keith Winters, CEO, Crane Worldwide Logistics
The default setting of global supply chains out of Asia has been stuck at “chaotic” for months. Space on ships and equipment for European imports is extraordinarily tight, port congestion across Asia and Europe is creating lengthy delays and cutting available vessel supply, COVID-19 measures are reducing available labor at terminals and further limiting capacity, and rates are hitting record highs every week while service levels remain at record lows. In this unstable shipping environment, the need for forwarders to provide value-added services to European importers has never been greater. So how are forwarders doing in this ultra-competitive environment? Are they able to offer the value that shippers demand, or is it more about managing shipper expectations? Should shippers lock in contracted rates with carriers as soon as possible to get off the volatile spot market, and should it be for three months or a year? How will the breakdown in shipper-carrier relations affect the relationships that forwarders have with both? As CEO of Crane Worldwide Logistics, Keith Winters brings his global perspective to the Asia-Europe trade in this keynote address and will share his views of the state of the market and what to expect through the Lunar New Year in February and beyond.
9:35-9:55 AM ET Will COVID-19 Derail Europe's Economic Rebound
Session Chair: Greg Knowler, Senior Editor, Europe, JOC, Maritime & Trade, IHS Markit
Kenneth Wattret, Chief European Economist, IHS Markit
IHS Markit economic indicators for the next year are positive, but could the pandemic reverse that? Europe’s supply lines are severely disrupted by a host of measures related to the pandemic and efforts to limit its spread, and despite IHS Markit’s PMI survey showing new orders and business activity at record levels, the overstretched supply chains are constraining factory output and work backlogs are building fast. With supply and demand uncertainty across every facet of the air and ocean supply chain, and the COVID-19 pandemic still very much in the frame, how confident can shippers be that trade growth will continue?
9:55-10:25 AM ET Shipping Faces Contracting Deja Vu
Session Chair: Greg Knowler, Senior Editor, Europe, JOC, Maritime & Trade, IHS Markit
Michael Braun, Vice President, Customer Solutions, Xeneta
James Hookham, Director, Global Shippers' Forum
As we approach the traditional last quarter 2022 contract negotiations on Asia-Europe, shippers are up against the same question they faced at this time last year – put out a tender for long-term contracts or wait and see if rates start to come down.
10:25-10:30 AM ET Closing Remarks
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