2023 Global Trade Recap & 2024 Forecast

With 2023 in the rearview mirror and 2024 off to a challenging start. It’s a good time to take stock of the current state of the global shipping industry, events that impacted 2023 and other events that should be watched in 2024. We’ll also look at other areas that may impact your supply chain - the economy, global trade, and other notable events.

As a dedicated partner, we’re interested in offering insightful, industry updates that enrich the lives we touch and support your business success. Responding to the challenges and exceptions in logistics with creativity and flexible solutions is how we deliver unmatched value and make your success our number one priority.

Container Industry Outlook

Ongoing Supply Chain Risks

2023 was a year marked by supply chain disruption that will continue in 2024. Shippers can work closely with their logistics/NVO partners to develop mitigation strategies to limit the impact to their supply chains.

Conflict in the Middle East

The most recent conflict in the Middle East began in early October with the Israeli - Hamas War. In November, Yemenis based Houthi rebels began firing upon vessels passing through the Red Sea to access the Suez Canal. As a result, most ocean carriers are bypassing this region and have sent their ships around the Cape of Good Hope, South Africa to avoid potential Red Sea attacks. This is resulting in longer transit times, equipment issues, and increased costs in the form of ocean carrier surcharges.

Panama Canal Drought

Record low water levels due to an ongoing drought are restricting the number of vessels transiting the Panama Canal. In July 2023 the Canal took a proactive step reducing the daily passage allowance.  The drought is disrupting supply chains and increasing the risk of delays at the Canal where vessels can wait for several weeks. “The Panama Canal is facing a major water challenge,” said Panama Canal Administrator Ricaurte Vásquez. “It’s a pervasive situation that is going to extend probably well into next year (2024).”

U.S. Labor Unions

For much of 2023, West Coast tensions and uneasiness caused importers to look at potential alternatives for their cargo if sustained work stoppages did take effect. In August, The U.S. West Coast labor union, the ILWU (International Longshore and Warehouse Union), agreed to a six-year contract that keeps the 29 ports from California to Washington State up and running without any union conflicts.

On the U.S. East and Gulf Coasts, September 30, 2024 has become an important date. The contract between the ILA (International Longshoremen’s Association), representing dockworkers at East and Gulf ports, and USMX (United States Maritime Alliance), members include ocean carriers, terminal operators, and port associations, expires. Negotiations are currently ongoing.

Container Shipping 2024 Market

“In the coming years, a notable imbalance between capacity growth and demand poses a significant challenge for the container shipping sector. With an expected excess in capacity over demand, stemming from a combination of larger year-on-year growth and weak demand since 2019, the industry faces potential overcapacity challenges,” said Chara Georgousi, Shipbroker Intermodal’s Research Analyst.

Ocean Alliances

In early January 2024, A.P. Moller - Maersk and Hapag-Lloyd AG-Lloyd announced formation of a new alliance called Gemini Cooperation, which will impact the East-West trades and the other container shipping alliances. THE Alliance members, ONE, Yangming and HMM, now minus Hapag Lloyd, may no longer able to offer a network matching Ocean Alliance (COSCO Shipping, Evergreen Line, CMA CGM, and OOCL), MSC and the new Gemini alliance. THE Alliance may look for a new carrier alliance partner to fill that gap.

Shifting Trade Flows

In 2023, Mexico became the United State’s top trade partner, representing 15% of U.S. imports to China’s 14%. In addition, the U.S. has increased sourcing from Vietnam and India. Canada continues to be a major trading partner with the U.S. at 14%.

Global Economic Outlook

The latest World Economic Situation and Prospects report for 2024 paints a sobering picture of the global economic landscape. The world economy continues to face multiple crises, jeopardizing progress towards the Sustainable Development Goals (SDGs). Although global economic growth outperformed expectations in 2023 with several large economies showing remarkable resilience, simmering geopolitical tensions and the growing intensity and frequency of extreme weather events have increased underlying risks and vulnerabilities. Furthermore, tight financial conditions also pose increasing risks to global trade and industrial production.

Global GDP Growth

The report forecasts a deceleration in global GDP growth, from an estimated 2.7% in 2023 to 2.4% in 2024, signaling a continuation of sluggish growth trends. Developing economies, in particular, are struggling to recover from pandemic-induced losses, with many facing high debt and investment shortfalls. The United Nations-World economic 2024 prospects

NRF Global Port Tracker (1/8/24): Inbound cargo volume at the nation’s major container ports should gradually slow during the first quarter of 2024 before beginning to build again in the spring.

Trading Economics export graph of 2023 U.S. exports ($B):

Trading Economics import graph of 2023 U.S. Imports ($B):

2024 - "The outlook for trade flows going forward is likely one of moderation, given that the trajectory for demand and growth should slow, both domestically and abroad," said Rubeela Farooqi, chief U.S. economist, High Frequency Economics.  (Reuters)

Other Notable 2024 Happenings

-November 2024, is the next U.S. presidential election which could have an overall impact

-Global economy – Inflation: According to the International Monetary Fund (IMF), the global inflation rate is projected to be 5.8% in 2024, with core inflation not expected to return to target levels of around 2% until 2025.

-A potential China economic slowdown

ASF-The Human Standard in Global Logistics

ASF, founded 24 years ago, began with a singular idea: to put people-first and bring integrity and honor to the global freight forwarding market.

Every human interaction is an opportunity to create a positive impact. Beginning with the simple act of fostering transparent, respectful dialogues and responding promptly to client needs. This strong belief system has positioned ASF as a trusted logistics partner and important resource for industry-leading logistics technology. Our collaboration with Gnosis Freight, a Container Lifecycle Management technology provider and leader in data integrity, positions ASF on the cutting-edge of logistics technology today.

While technology plays a pivotal role, it is the human element at ASF that ensures the agility, resilience, and success of supply chain operations, especially in this ever-changing global trade landscape.

ASF Logistics provides supply chain logistics services throughout the world including all forms of transport, cargo insurance, customs brokerage, and contract management. Specializations include: Flexitanks, reefer logistics, and project cargo.

Meet Our Expert

This article is reviewed by Jeffrey D. Plumley, Chief Commercial Officer and Licensed US Customs House Broker.

Jeff has an extensive background in global logistics, spanning various freight forwarding executive management positions. As a Licensed US Customs House Broker, he has managed regulatory compliance and is a worldwide expert in Flexitank transportation logistics.

In addition to his strong forwarding and Flexitank background, Jeff was also Head of Regulatory Compliance and Sales for a major global logistics software provider. He has over 30 years of logistics experience and a strong leadership background having graduated from the Citadel.

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