Trendwatch: Global shipping lines extend vessel-sharing agreement; Asia to Europe container exports surge to 16.5 million TEUs in 2023; WTO chief sees trade missing forecasts on growth headwinds

Global shipping lines extend vessel-sharing agreement

Four Asian and European container lines are extending their vessel-sharing agreement as rival carriers reset their alliances in a market beset by plentiful capacity and low freight rates.

China’s Cosco Shipping, CMA CGM of France, Taiwan’s Evergreen Marine and Hong Kong-based Orient Overseas Container Line, a unit of Cosco, agreed to continue sharing ship capacity through 2032 under the Ocean Alliance pact they formed in 2017.

The extension of the Ocean Alliance agreement, which was set to expire in 2027, adds a measure of stability to the network of shipping pacts that has undergone a shakeup since Maersk Line and Mediterranean Shipping announced in January they would end their 2M Alliance operating agreement next year.

Asia to Europe container exports surge to 16.5 million TEUs in 2023

According to data compiled by the Japan Maritime Center (JMC) using information from Container Trades Statistics (CTS), container exports from Asia to Europe reached 16.58 million TEUs in 2023.

The Japan International Freight Forwarders Association (JIFFA) stated that this marked a 7.8% increase from the previous year and brought the figures back to pre-pandemic levels seen in 2019.

By origin, containers from China swelled 9.5% to 12.5 million TEUs, leading the overall outbound container movement. Those from Northeast Asia were brisk as well, accomplishing a double-digit improvement of 12.1% to a total of 1.83 million TEUs. On the other hand, containers from Southeast Asia fell 3.7% to 2.24 million TEUs.

WTO chief sees trade missing forecasts on growth headwinds

The head of the World Trade Organization said global commerce, after proving resilient through the pandemic, is performing weaker than forecast amid multiple economic headwinds and a political tilt toward protectionism.

“We need to repair the multilateral trading system, reform it, make it fit for purpose, but don’t take it for granted,” Director-General Ngozi Okonjo-Iweala said during a press conference Monday in Abu Dhabi, where trade ministers are gathered for the WTO’s 13th biennial conference. The global trading system “is continuing to be quite strained.”

She said that demand is sluggish across most major economies — except for the US and India, “which are doing quite well.” Meanwhile, wars and climate-related problems like a drought that’s slowing shipping through the Panama Canal are “impinging on the supply side.”

Red Sea crisis milder than Covid-19, challenges to be seen in 2025

The impact of the Red Sea crisis is less severe than Covid-19, although the TEU-mile boost has been significant.

Clarksons’ latest Container Intelligence Monthly stated that compared with December 2023, TEU-miles have gone up by around 11%, as around 620 ships of 8.5 million TEUs are rerouting from the Suez Canal to the Cape of Good Hope to avoid attacks from Houthi rebels.

Contextualised against Covid-19, where surging e-commerce sales and heightened inspections caused logistical bottlenecks worldwide, Clarksons said that the Red Sea effect has been milder.

Boeing hit by damning report faulting safety procedures

U.S. regulators issued a scathing assessment of Boeing Co.’s safety culture, putting further pressure on the company as it contends with the fallout from a near-catastrophic accident at the start of the year.

The planemaker was faulted for ineffective procedures and a breakdown in communications between senior management and other members of staff, a panel of experts convened by the Federal Aviation Administration said in a report released February 26. Constant changes to complex procedures and trainings led to confusion, while other shortcomings hindered the average employee’s understanding of their role in how Boeing manages safety, according to the report, which was mandated by U.S. lawmakers.

Food supply chains are suffering from climate change

Climate change is hurting the global food supply chain, and local restaurants are bearing the brunt of the impact, according to a new report.

According to InsideClimateNews.org, on February 21, the James Beard Foundation, a nonprofit known for its culinary awards, and the Global Food Institute at the George Washington University released an analysis investigating the impacts of climate change on independent restaurants, which are the fifth-largest employer in the U.S.

China objects to EU’s border carbon tax, backs global market

China objects to the European Union’s carbon border tax because it unilaterally imposes additional costs on poorer countries, according to the country’s vice minister for the environment.

Collaborating on a global carbon market would be a better option than the EU tax, said Zhao Yingmin. China is also considering an expansion of its domestic carbon trading system, he said.