Maersk Europe Market Update (October 2022)

Updated Ocean Ports and Keys

After several challenging months across Europe, the past two weeks have brought much-needed stability and resilience to our global network.

Close cooperation with ports, combined with contingency planning and schedule changes, has improved congestion levels, berth queuing times and port productivity across the region.

The significant improvement in our service delivery figures has placed our reliability and service levels at the top of the industry. As schedule reliability continues to increase, we will continue to monitor bookings and track demand with positioning to ensure minimal impact to customers. Despite this, some concerns remain about park density and long-standing containers.

To limit delays and help keep terminal operations at an achievable level, we kindly ask that you continue to pick up full import containers or request shipment as soon as possible after unloading.

Water levels across the Rhine have also caused problems in recent months, but since October 1, the low water situation has ended for all areas. This eliminated delays in barge transportation and helped stabilize rail and truck transportation, which is expected to continue to normalize in the coming period.

Two rounds of strikes at the UK ports of Liverpool and Felixstowe caused disruption to timetables, but Maersk crews established contingencies and revised timetables to maximize manpower immediately after the strike. At the Port of Liverpool, another strike began on October 11 and is due to end on October 17. Our teams continue to work on contingency planning and further information can be found here.

Along with Golden Week, inflationary pressures and a general decline in consumer demand, a series of services adjustments have been activated on Asia-Europe trade to balance supply and demand. While product coverage will be impacted by these changes, the program will help improve terminal and schedule recovery, which have been key hurdles for global supply chains.

October is usually when we see the start of the peak reefer export season, which lasts until the start of the following year. This year is no different, and we have been focused on getting the right levels of equipment and capacity in place to support peak customers. In line with the improving operational situation in Europe, we look forward to sustaining a strong peak season over the coming months.

Although the situation is improving across the ocean network and in European ports, our customers still face a number of supply chain challenges. Our teams are here to support you on your journey, so don’t hesitate to contact your local Maersk representative if you need help.

Air Cargo Update

Globally, the air cargo market continues to be quite volatile, with volumes trending lower but fares remaining above 2019 levels due to jet fuel costs, lack of passenger/valve capacity and the impact of the war in Ukraine.

As inflation in Europe hit a record high of 9.1% in August, the purchasing power of the general population has been hit hard – with sales falling and inventories rising across many sectors, mainly retail and manufacturing.

Elsewhere, flight cancellations due to lack of staff at airports have led to a growing reliance on cargo aircraft, and the Asia-Europe trade route is heavily impacted (-20% since the start of the year) thanks to COVID policies, inflation, capacity reductions and other factors.

Despite this, Europe outbound is stable and growing slightly, with increases in the lifestyle, consumer packaged goods and pharmaceuticals sectors.

The future is uncertain as we enter the winter months. According to experts, a European energy crisis is imminent, with the energy and chemical sectors being the most affected. Russian and Ukrainian airspace still remain closed and there is no indication when this will change.

Maersk will continue to monitor the situation and use its own controlled air cargo network to keep supply chains moving. Although improved sea freight conditions have slightly reduced air demand, the need for a reliable alternative is expected to remain high across Europe during peak season.

To learn more about our airline network and its expansion, click here.

Interior update

Inland transport across Europe continues to come under pressure, with strikes and cancellations leading to disruption of rail services across the continent. These issues are having a ripple effect on an already strained trucking industry, where driver shortages and rising fuel price issues continue.

However, recent improvements to the ocean network have relieved inland operations, which were called upon to reduce congestion at ports. Our teams will continue to assess the situation on the water, ready to provide additional ground transportation throughout Europe if required.

To add resilience to customers’ supply chains and combat potential future disruptions, cross-border rail solutions are being developed in Europe via two main corridors: from Turkey to Northern Europe and an ad hoc solution between Spain and Northern Europe.

In addition, at the end of October, a new environmentally friendly rail product for refrigerated freight from Valencia to London will be officially launched, which will solve supply chain bottlenecks and deliver fruit and vegetables for the high Spanish season. Learn more about the Sealand service here.

Sustainable rail solutions will continue to be a priority for Maersk and our customers in the future, so we will analyze where we can open up more long-haul rail products with a reduced carbon footprint across Europe in the coming months.

Electronic delivery update

As we approach what is traditionally a peak period, a question on the minds of many customers is whether to “hit or not hit”. After the pandemic and the rapid growth of e-commerce sales, we are now faced with consumer hesitation and rapidly changing market conditions, such as the rising cost of energy, which could interfere with the high traditional season.

This uncertainty leads companies to wonder whether they should start preparing for the high season sooner or later. Some are hesitant to start, while others are taking action sooner than ever in hopes of getting a piece of consumers’ wallets before the cold weather shifts into energy. Besides the cold weather, the last quarter of 2022 is also expected to bring a technical recession in Europe, which will continue into the first quarter of 2023, according to the European Central Bank.

To cope with changing conditions, companies need to focus on building resilience throughout the supply chain.

Resilience is more than being able to speed up the supply chain during peak season, it’s also being able to slow down when demand drops, and having a wide range of options transport, in the event of a disruption. Learn more about how e-commerce businesses can overcome supply chain disruptions.

With this in mind, Maersk E-Delivery teams are working to expand our offering to help our customers save time and money and make their supply chains more resilient. This includes increasing our PUDO (pick-up drop-off) locations to increase last-mile efficiency, expanding our carrier network to reduce costs for customers, and supporting our customers in sustainable delivery.

Looking ahead, we advise our customers to start planning 2023 budgets early, to ensure the profitability of last mile deliveries and the resilience of their supply chains. To get started, visit our Europe E-Delivery portal.

Customs update

Customs continues to be an area that companies are putting under the microscope in order to add more resilience and predictability to their supply chains in the face of possible future issues.

We are seeing a new level of emphasis placed on customs compliance and strategies, as the need to be one step ahead in compliance and planning becomes evident. With this in mind, our clients may need to prepare for a new set of sanctions imposed against Russia.

New import and export bans entered into force on October 6, 2022. This eighth round of economic and individual sanctions will extend the sanctions already imposed.

The new sanctions restrict Russian imports of products such as steel, plastics, wood, pulp and paper, vehicles, textiles, footwear, leather, ceramics, cosmetics, certain chemicals, cigarettes and jewelry other than gold. Additional export restrictions are also imposed to reduce Russia’s military, technology and defense sectors. For more information, click here.

Maersk Customs Services will continue to monitor the situation and will notify customers of any changes as soon as possible.

We will also continue to help our customers navigate the current situation by offering global customs clearance and out-of-the-box customs solutions controlled from one location, which adds visibility and predictability to their operations. Supply Chain.

About Julie Gray

Check Also

Operators on track to continue sleeper service – Martin Bignell

Through the constitutional, political and economic turbulence of September and October 2022, it has sometimes …