Posts of: admin_mafr

In recent months, there has been growing concern on several fronts over the economic and political influence of China in European ports.

The debate has been revived, not least because of COSCO’s bid to buy 35 percent of Tollerort Terminal (CTT), a small container terminal in Hamburg.

According to a report by the consultancy firm McKinsey, between 2021 and 2022, Chinese investment in airport infrastructure increased by more than 50 percent. Also in 2022, the Asian giant became the largest foreign investor in port infrastructure in Europe.

To date, COSCO has operations in seven European countries, including Italy.

The reasons behind China’s expansion

The consolidation of the Chinese presence in European ports has various objectives. Firstly, the intention to consolidate its global position as an economic power.

According to the latest report issued by Alphaliner, by the end of August, Chinese port operators had made investments in as many as 31 container terminals in Europe and the Mediterranean. These are strategic ports, located, for example, in Greece, Belgium and Vado Ligure, Italy.

China is the EU’s largest trading partner; expanding its logistical position in specific areas can only simplify trade and reduce transport costs, putting the Asian giant in an advantageous position for demanding—and obtaining—more favourable trade conditions in negotiations.

Not only that: investing in port infrastructure could give the country access to new markets.

Countermeasures by certain countries

Some countries—such as Japan, Australia, the United States—and even the European Union are seeking to adopt a series of countermeasures to prevent possible risks from China’s expansion. One example is the stricter controls on foreign investment in infrastructure, also adopted by the Italian government in 2022. Or the counter investments by Member States in port and logistics infrastructure to reduce their dependence on China.

It is not possible at present to be sure whether countermeasures are really necessary or efficient. We will just have to wait and see how events develop politically and economically.

One thing remains certain, however: China remains the EU’s largest trading partner and also the third largest importer.

In recent years, there has been increasing volatility in ocean freight rates: in the last three months of 2023, for example, quotations registered sharp falls, which have inevitably influenced market trends.

The uncertainty in the industry raises many concerns, in particular about the resilience of the supply chain for 2024.

Taking stock is the analyst firm Xeneta, which in its latest outlook painted a complex and uncertain new year for container transport.

Ocean freight rates to rise in 2024

According to Xeneta, in fact, ocean freight rates will increase dramatically, making it no longer economical for carriers to transport goods contracted under the 2023 tariffs.

As stated by Patrik Berglund, CEO of the company: “The cost of transporting containers by sea fell by 60 percent in 2023, and on some routes (such as from the Far East to Europe) the drop was even more pronounced, reaching 80 percent for both short- and long-term contracts. Currently, freight rates are so low that companies are in fact operating at a loss in many cases.”

This is a situation that cannot be tolerated much longer and which will lead, in a physiological manner, to an increase in tariffs.

Although it is not known precisely when the freight rate increases will begin to materialise, Xeneta paints a less than reassuring picture. On the one hand, he says, there will be customers who signed long-term contracts in 2023 at very low rates and, on the other hand, those who will sign agreements in 2024 at higher rates.

The companies could then decide to leave on the ground the cargoes of the former, in favour of cargoes with a higher price.

Adding to the uncertainty of this situation are the ongoing geopolitical crises in Ukraine and the Middle East and the entry into force of the Emissions Trading Scheme (ETS) in the maritime sector in 2024.

Overcapacity and reliable contracts

This situation is an important challenge for all customers who will have to learn how to protect their supply chains.

One hope comes from overcapacity, which, should it continue into 2024, could be an incentive for carriers to load all cargoes, regardless of freight contract rates, in order to fill the ships. This condition could also benefit customers with long-term contracts concluded in 2023.

Another lies in the choice of experienced and reliable operators.

Over the years, we at Marfreight have handled various situations involving market volatility, always striving to offer our customers consistent solutions in line with their expectations and needs.

Already last year, for example, following the exaggerated increase in freight rates in the spring, we offered our partners contracts on a monthly basis, with easily affordable instalments.

As industry operators who care about their customers’ businesses, we have an obligation always to be ready to face and manage market changes, to ensure the best solutions in terms of security and value.

Container transport contracts are still decreasing. This was stated a few weeks ago by Xeneta, the leading benchmarking platform for shipping rates, which released data for the August period.

According to the analysis carried out by Xeneta, the level of rates for container transport contracts in the reported month fell by a further 7.8%.

Here is, in particular, the data released. 

Analyses in detail

When considered in relation to the previous month, the largest decline was in contracts for imports to the US, -14.9%.  Contracts for imports to Europe declined by 3.4%, resulting in an overall fall of 60.1% compared to the previous year.

Contracts for exports from the Far East also declined, down 14.2%. And in terms of trade routes?

The largest decline was recorded on the Shanghai-Rotterdam route, which fell by 4%. Freight rates on the Shanghai-Genoa route fared better, however, recording a decline of only 1%.

These figures confirm a trend that has been going on for some time and which could signify the need for shippers to renegotiate their contracts.

Reefer containers VS dry cargo

Another interesting piece of data that completes the picture of container shipping comes from the Reefer Shipping Annual Review and Forecast, published a few weeks ago by UK-based maritime consultancy Drewry.

According to the report, it appears that reefer container transports have decreased from their peak in the third quarter of 2022, but at a slower pace when compared to dry cargo shipping.

The average rates of the top 15 international carriers dedicated to reefer shipping are reported to have fallen by 22% over the year, yet remain above pre-pandemic levels by around 60%.

The company’s overview for 2024 predicts rates still above pre-Covid levels, with a more moderate gradual decrease for reefer containers than for dry cargo.

Marfreight has always worked alongside its customers, offering the best solution in terms of quality and convenience. Our quotations, of course, follow market trends, but we constantly strive, including through well-established relationships with leading carriers, to study the best, most advantageous and efficient solutions in terms of cost and punctuality.

After the opening of the two Marfreight offices in Salerno and Milan, our company completes its Italian development project for 2023, with the opening of a new sales and operations office in Genoa, the hub of sea transport.

As with the other offices in the area, the Genoa office is a strategic choice closely related to the port’s high level of commercial activity and the city’s location, which ensures quick connections to the main trade destinations in Italy and Europe.

The Genoa office, as well as our Salerno office, will offer territorial support to the development of our company’s activities in the Customs and Health sector, thanks to specialised personnel with years of experience and direct contacts with the main carriers that operate in the area.

A competent and well-established team in Genoa

The addition of Genoa to Marfreight’s locations represents a decisive and significant step in our company’s growth, which we are confident will enable us to offer an even more efficient and faster shipment management service.

Our presence in the capital city of Liguria will allow us to strengthen relations with our partners and establish important new collaborations, which will pave the way for integrated logistics solutions tailored to our customers’ needs. Not only that: it will allow us to closely follow the delicate operations of goods handling.

The customs advisory service will also benefit from an experienced logo team. We will be able to provide a complete and customised assistance service, especially in the critical stages of customs clearance or customs controls during which, by assisting the operations of the authorities’ staff, we act as a guarantor of our customers’ interests, ensuring that the goods are sealed in the correct way to protect their safety and ensure their correct preservation throughout the rest of the shipment.

Widespread in the area, close to our customers

With Genoa, Marfreight ensures its presence in all the most strategic areas of Italy: Naples, Salerno, Bari, Milan and, indeed, Genoa.

Salerno, Naples and Bari offer important coverage for the business development of southern companies. Milan and Genoa, thanks to their proximity to the industrial hub and an integrated infrastructural offer, enable us to guarantee an even more comprehensive business offer.

The Marfreight headquarters keep multiplying: On the 1st of May, our offices in Milano Segrate will officially be operational.
This was a strategic decision for our maritime/air transportation services, placing us in one of the hotspots of international logistics.

Marfreight offices: the reason behind the opening of our new Milan headquarters

Milan is the beating heart of economic activity – a strategic location for international logistics.

To be able to provide a service abreast of challenging international commerce, the companies operating in the field of shipments must be able to rely on a solid and well-connected network. This, in turn, translates not just into well-established relationships with the major carriers but also and foremost, into an active presence on the territory.
Milan stands out for being one of the liveliest cities regarding commerce and logistics.

As a matter of fact, Milan dramatically benefits from its geographically advantageous position, which puts the city near leading international markets. As a matter of fact, its proximity to Mediterranean ports and the main motorway and railway networks makes it a genuine logistics hub, an ideal location for coordinating shipments all over the world. Milan-Malpensa Airport is indeed one of the most crucial cargo airports in Europe.

Our presence also in Milan thus secures us the opportunity to create customised logistics solutions offering our partner customers a sizeable competitive edge.

A growing company looking far ahead

The opening of this new headquarters, following that of Salerno, is once again a testament to our company’s journey of constant growth, one consisting of choices made to always provide the best service in terms of speed, efficiency and reliability. Exploiting the resources offered by this pulsating city means accessing an extensive network of trade opportunities, optimising logistics operations and, for us, providing top-quality services.

Our new Marfreight headquarters in Salerno is finally operational.
Starting from the 1st of April, our forwarding company will now be based also in Salerno, a strategic location for maritime transport.
Our offices in Salerno will provide territorial support to developing our company’s activities in the fields of Customs and Health checks, relying on skilled personnel who carry below their belt years of experience and boast direct connections in the local area.
This will allow us to offer our clients even more flexible, fast and reliable services and to create tailor-made solutions for all kinds of goods.
This was a strategic decision on our part, one that will allow us to follow even more closely the freights that are entrusted to us: Marfreight’s presence in the area represents indeed a safety assurance on the transport and care towards our clients, also and especially during the delicate operations of customs control.
The opening of these new headquarters represents yet another step towards the growth of our company, which, although still relatively young, is making headway among the major international forwarders, thus strengthening its presence at a national level, relying on direct offices and skilled operations personnel.
The new Salerno base is indeed an addition to the Marfreight’s head office, located in Napoli, and to the operational headquarters in Bari, the latter by now having become an entity to be reckoned with in the maritime/air transportation industry in the Apulian area.
Cooperating closely with companies is for us an essential advantage because it enables us, now as in the past, to provide a service that lives up to our clients’ expectations, a service that we fulfil every day with passion and dedication.