What's happening in logistics right now? Trends and forecasts

We analyze news from the world of logistics, make conclusions and explain what this may mean for participants in the Russian logistics market. Andrei Mironov, Commercial Director of JML, comments on today's news compilation.

1. Today, many companies are actively working out alternative routes and offering new services. This is due to the fact that, firstly, businesses are looking for ways to circumvent restrictions and sanctions. Secondly, there is an opportunity to develop new markets. This is confirmed by the news: Eastern Stevedoring Company has started new container services in Qingdao and Ningbo, TransContainer has launched a new service for cargo transportation from China to Rostov and Krasnodar via the Far East, and FESCO has sent the first train from China to Kaliningrad via Kazakhstan. Entrepreneurs are trying to use the current situation as an opportunity to develop and reduce the consequences of the crisis. This trend is supported by such events as the opening of the first automobile bridge between Russia and China. All this means that the drop in transportation volumes is beginning to decrease. The situation is gradually leveling off, and the moment of the biggest decline we have most likely passed. But the decline curve will remain, and there is still a long way to stabilization, let alone growth in volumes. There are news about the increase in shipments, but these are local regrouping, not a general trend.

2. Strikes of transport workers in different countries are becoming a general trend (from recent ones: truckers in South Korea, railroad workers in the UK, seaport workers in Germany). For us, this may mean that cargoes will be accumulated and delayed, and then they will come in large batches. And we have to prepare for queues and difficulties in processing the arriving goods. These events are also an indicator that characterizes the world economy. People in many countries are experiencing infringement of their interests, which can only be expressed by a strike. These sentiments are important to consider when planning your work. It is likely that a wave of strikes could happen anywhere.

3. Fresh Del Monte company launched its own shipping operator and DFDS is buying Turkish road carrier EKOL. When we hear about such deals, it means that companies are looking for new ways to provide transportation of their goods (for producers) or customers' goods (for carriers). Large businesses are solving this by buying smaller carrier companies. This trend indicates monopolization of the market. Moreover, this process is reactive, formed as a response to unhealthy external circumstances. This means that the market development is following a negative scenario.

4. Analysts of the ATI.SU exchange released data on a strong drop in freight transportation rates (up to 40% over three months). We see this as a direct consequence of falling volumes and reduced number of flights. This is “good news”, if it were not for two “buts”. One: rates are not coming down at the same pace as they were going up. The second is that the routes have become more complex, the supply chain has increased, and the lowering of rates has almost no effect on the final cost of transportation. Therefore, it will not affect the final cost of goods.