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Italian shipping and inflation, what’s the current situation? An overview was provided by the latest Fedespedi Economic Outlook published in March last year.
According to the report, the effects of the economic uncertainties related to the war in Ukraine could run into 2023.
Of particular concern with regard to Italian shipping is the increase in inflation.
Rising inflation is a concern for Italian shipping
The report shows that, despite various crisis factors, 2022 was better than expected, thanks in part to the appropriate countermeasures taken through business support policies.
However, forecasts for 2023 are still cautious, not least because of the continuing instability in the global geopolitical situation and the inflationary pressures that have led to a consequent rise in rates.
In January, consumer prices increased by 0.2% compared to the previous month and by 10.1% compared to January 2022, growth mainly related to the costs of energy goods.
It is also interesting to consider the fluctuating trend of e-commerce, which in 2022 saw bouts of growth alongside downturns.
In contrast, the state of global logistics chains is shown by the Global Supply Chain Pressure Index (GSCPI), published by the Federal Reserve Bank of New York, which shows a moderate decline in January 2023.
What is the state of container traffic in Italian ports?
According to early estimates, it is expected to have increased by 2.4% year-on-year to around 11.5 million TEU in 2022. The increase affected all major ports, especially the ports of Savona and Ravenna. A trend that, however, did not affect ports such as Genoa, La Spezia and Salerno, which instead showed a slight decrease.
This growth also reached transhipment ports, such as Gioia Tauro, which regained the numbers seen a few years ago, and Taranto and Cagliari, which experienced a major crisis during the pandemic period.
As a result, maritime transport came back to life in 2022, also recording a clear decrease in ship delays: from 30.4% of ships on schedule at the beginning of 2022, to 56.6% in December of the same year.
At Marfreight, we work tirelessly to offer our customers the best deals, thanks to valuable partnerships established over the years with major freight carriers.
For more information, you can contact us here on a no obligation basis.
On 21 March, the Financial Times published the FT 1000: a list of the 1,000 fastest growing European companies over the last three years.
To our great pride, Marfreight made the list as the first Italian company, in Europe, in the Logistics and Transport sector. A great result that rewards our commitment over the past few years, our dedication and passion for our business and for the forwarding industry.
The ranking was compiled in collaboration with Statista, a leading German institute for the certification of economic data, and involved companies in 34 countries (including Europe, the UK, Switzerland and others), analysed on the basis of the annual growth rate measured by the revenues obtained in the period between 2018 and 2021.
Growth Leaders 2023: top companies despite the pandemic
This is a very important result for us, a sign of our great commitment to the sector, even and despite the restrictions imposed by the pandemic. After more than a year of the Covid-19 emergency, companies across Europe have been hit hard, due in part to disruptions in the global supply chain.
The minimum growth rate to qualify for the list of one thousand European growth leaders was 36.2%. At Marfreight , we recorded an absolute growth rate of 45.0% and a compound annual growth rate (CAGR) of 81.2%.
Forecasts tell us that next year our company could make a repeat appearance in the rankings.
This achievement comes on top of another recognition obtained: our company’s inclusion among the “Growth Leaders 2022”, the ranking compiled by Statista and published in Il Sole 24 Ore, which gathered the Italian companies that grew the most in terms of turnover and number of employees over the three-year period 2017-2020.
First and foremost, we would like to thank our partners who rely on us every day and choose our services. But also, and above all, all the people who make up the Marfreight team: professionals who invest commitment, dedication, passion and energy into always offering our customers the best possible solutions.
In recent months, there has been increasing talk of Friend Shoring, a new approach to the global market.
Because of the market crisis caused by global events such as the Pandemic and the war in Ukraine, countries have seen the need to diversify supply chains in order to make their economies less vulnerable to external risks. The US has chosen the Friend Shoring approach: a tool aimed at promoting economic resilience by relocating supply chains to “friend” countries.
Friend Shoring: Meaning and Market Impact
In fact, it is a solution that the US decided to implement even before the conflict in Ukraine erupted.
In essence, it is a matter of relocating some stages of production to countries that share the same set of values or interests, as well as the reference country’s geopolitical alignment.
Consider the following example: Because the Beijing government has committed human rights violations against Uighurs and other ethnic and religious minorities, the Biden administration has begun to limit imports of goods produced in the State of Xinjiang, including cotton and tomatoes.
A sustainable approach that could have a significant impact on the international trade of those countries that have always made trade agreements with everyone.
Global market risks are pushing towards offshoring.
The need for a Friend Shoring approach stems from the need to defend global economic integration by increasing the reliability of the supply of goods on which the various world economies rely.
There are three major risks to trade relations that have been highlighted by pandemics and wars:
- the excessive concentration of critical goods production in a single market, which makes supply chains vulnerable and potentially dangerous;
- geopolitical risks, such as Russia’s control over the transportation of natural gas and grain deposits;
- the presence of supply chains that violate fundamental human rights.
The Friend Shoring should be developed in response to these challenges, with the goal of making the global market safer and more sustainable.
Our country appears to have already started down the path of friend shoring. Trade with European countries, North American countries, and Mediterranean countries increased in 2022. According to the most recent Censis data, 364.4 billion euros of Italian exports to the world were simply friend shoring in the first seven months of 2022.
Not everyone believes the Friend Shoring is truly sustainable. According to some economists, this approach could widen the gap between developed and developing countries. However, the transformation has already begun. The past year has highlighted the vulnerability of a global market that has failed to account for environmental and human factors in manufacturing processes. The same market that is threatened by climate change.
VGM weighing is a critical procedure in the sea transport of goods.
The acronym VGM stands for Verified Gross Mass and refers to a container’s verified gross mass. In fact, the information is derived from the sum of the net weight of the goods and the tara of the container.
This is a required piece of information to communicate in international sea freight transport. As a result, VGM weighing must be precise and cannot be approximate.
The requirement to weigh dates back to July 1, 2016, when an amendment to Chapter VI of SOLAS (Safety of Life at Sea), an international convention of the IMO (International Maritime Organization), was enacted following the Titanic disaster.
The amendment, in particular, concerns cargo transport and aims to improve sea safety, particularly the protection of human lives. This system, in fact, is nearing completion and will provide reliable data on ship cargo calculations.
How is VMG weighing determined?
The weighing system, according to VGM, can be operated in two modes.
The first previews that the container is weighed after it has been loaded, closed, and sealed, on a private or public certified weigh. After that, the weight of the vehicle, trailer, and fuel in the tank is subtracted.
The second method, on the other hand, allows you to calculate the VGM value by adding the weight of the goods loaded, the materials used for setting and packaging, and the tare of the container.
Whatever method is used, the measurement system must meet the standards of the country in which the operation is performed.
Why is it such an important operation?
The container cannot be loaded onto the ship without VGM. As a result, the operation is critical for the safe and correct international shipping of goods by sea.
To avoid potential delays caused by the performance of some of the procedures required by SOLAS, such as the weighing of goods, Marfreight assists its customers at every stage of the transport service by transmitting all information about the load to the shipping carrier on time. This will reduce transport times while avoiding accidents and difficulties.
International shippings by sea, weekly and direct, that are able to go to the United States, from Salerno, in just 12 days. A new challenge that has started from the last 1st of October.
Just in that date, in fact, the full container ship Velika Express has left the port of Salerno, opening the new ultra fast connection line, going directly to New York, Norfolk and Savannah.
An opportunity able to make Campania a central junction for trade with US and that comes in a particular moment, which has seen a decrease of the traffic of the 15% in the port of Salerno, in the first six months of 2022.
The Cargo ship of the German Hapag Lloyd is, until today, the fastest line that is able to connect Italy with the new Continent. A fast route that opens to the new connection with UK and North Europe which will start around mid-month.
The fast transport by sea Salerno-New York is a great opportunity for the italian agro-industry, and in particular for the one in Campania, that has in the american market an important commercial interlocutor. The speed of the new connections, in fact, guarantees an element of great competitivity for the italian economy, towed by the agro-food industry itself.
In the last days, Giovanni De Angelis, Anicav general manager, the national association of italian canners, has pointed out how, for the transport by sea, the port of Salerno is strategic, representing the first stopping place for the canned sector. Tinned tomatoes, for example, that can be found on the american, english or north Europe tables depart from here.
The costs of sea freight we have faced, the increase of energy costs and all the labour costs, have stressed the canning industry. Fastest ships, and more convenient, could improve the situation. As long as we work even in terms of actions and infrastructural investments to strengthen the integrated logistics.
Do you want to know more? Contact us, without any obligation, to have the best pricing for your international transport by sea.
Good news from freight rates. It still keeps going on the downward trend of the freight rates cost of container on the main routes of sea freight.
After a long period in which costs were increased even to 3-4 times, strongly penalizing, among others, the ports in Campania, at the beginning of this summer the prices of sea freight on container have started to decrease.
At the end of July, freight rates costs have inverted their trend, facing a drop that allowed to break the psychological threshold of 10k dollars, for boxes with 40 feet. In particular, the significant drop in prices has interested even freight transport from and to Cina, even routes that interested Italy.
In the route Shangai-Rotterdam, according to Drewry, the independent consulting firm for maritime research, the drop in prices was so heavy that made again convenient the transit of goods through Mediterrean, compared to the ports in North Europe.
A trend that fits within a generalized framework of a substantial stability, slightly verging on downward.
Freight rates costs: future prospects
According to Peter Berglund, Xeneta CEO, analyst firm specialized in marine shipment, the trend in the sector in the medium-long term could be influenced by some factors. For example, the persistence of problems in the supply chains, the ongoing union initiatives in the main ports in Germany, UK, US, lockdown for Covid in Cina and the low levels of water caused by climate change in the Rhine. All of these, according to the norwegian analyst firm, have to be observed to comprehend and anticipate the trend market and relative prices.
The right partner for convenience and safety
Marfreight always works side by side with its customers, giving them the best solution in terms of safety, convenience and professionality.
Our prices follow, naturally, the market trend: in these last weeks in fact we are offering our customers updated pricelists, but we are constantly striving to study ideal, most advantageous, safest solutions, even during difficult times for the sector.
For further informations, you can contact us here, without obligation.
The debate still goes on about the shipping ecological transition and the part done by the protagonists of the sector for the path towards enviromental sustainability.
During the annual “Assarmatori” meeting, the President, Stefano Messina, talked again about the shippers’ position, not hiding some perplexity: “We are demostrating our preparedness, as shippers, to adjust fleet, in order to achieve the objectives about reducing the emissions established by IMO and European Union. But we are facing a lack of technologic solutions and available and sustainable alternative fuels, and also the related distribution networks in ports”.
Just as a reminder, shipper has underlined on more occasions the efforts made towards the decarbonisation of maritime transport, starting from the $ 5 billion fund intended to cover the technological innovation needed to reduce emissions.
The risk of a poorly studied ecological transition
The problem is that the sector is not technologically ready to embrace the change. Not yet. According to Messina, in fact, the impulse given by Bruxelles through IMO new rules and the pack “it for 55”could have the opposite effect on the sector, producing a lot of problems, such as the increased costs of maritime connections with the islands, the need to lower the speed of boats, with the consequent reduction of service offer and a loss of ports competitiveness.
A problem confirmed even in Achille Onorato’s words, Moby CEO, who, during the meeting, underlined the risk of going towards an “unsustainable sustainability”. Despite the request of green investements for the sector, today, he affirms, there isn’t a technology that allows a complete sea-change on fuels used by marine vessels. A cold ironing without green fuels risks to make ships uncompetitive, slowing the decarbonisation path.
Minister Giovannini’s response
About that even the Minister for Infrastructure and sustainable Mobility, Enrico Giovannini, has spoken, repeating the need to define a clear and unambiguous path to not waste the funding for the ecological transition of maritime transport. The minister has in fact recognized that the State couldn’t fund every solution, so it will be appropriate to carry out precise and balanced analysis, in order to optimize time and funds.
While waiting to understand what will be the path that the shipping ecological transition will take, the minister has reaffirmed that, “we have to push on the refitting of actual means, so that they will pollute less. An aim that we want to follow thanks to the 500 millions of euro allocated in the PNRR supplementary fund and that will obtain other resources even in the future, in order to carry on this path even after 2027”.
Intermodality as the main element in an environmental sustainability and economic strategy of transport. That’s the most taken path to give a tangible breakthrough to cut emissions in this sector. A path involving the italian system of connection port – inland port and that can give a major boost to the strategic growth of Italy in the international transport.
Intermodality as a leverage for the transport decarbonisation and so much more
The transport sector, in Italy, is directly responsible for the 25,2% of greenhouse gas emissions and the 30,7% of CO2 emissions.
A condition that has absolutely to be changed. Not because international politics and the enviroment ask changes oriented to sustainability, but also because the global productive balance is changing.
The rapprochement of productive activities, in fact, could soon determine an increasing in trade volume within Europe. Trade that will affect Italy too and cannot be sustained only with road transport. According to italian political leadership, the solution to this problem can be found in intermodality.
Marebonus and Ferrobonus to support intermodality
That’s what believes the Minister Giovannini, who says that: “Marine and railway intermodality is fundamental, representing not a choice anymore, but the real option if we want to combine social and economic sustainability with the enviroment”.
An integrated logistic solution, where highways of the sea and railways could shift transport to medium and long distance towards ships and trains.
A path that the Government is starting to take even through financing intervention. It’s Giovannini himself to explain it: “Thanks to marebonus, ferrobonus and the infrastructure investment we have the opportunity to make that famous modal shift we have talked for many years”. Government incentives that have just been refinanced by Government with other 38,5 millions of euro for the 2022.
Marine and railway intermodality: the central role of inland port
Inland ports are infrastructure dedicated to modal exchange and interconnection among networks. It’s about strucutres that have an important role within the supply-chain and that could represent the keystone in an enviromental sustainability strategy focused on intermodality.
Italy has an excellent inland ports network: 26 infrastructures located in strategic positions, in big international corridors that serve as a scenario for trading with other countries. Think about, for example, the Mediterranean-Balkan corridor, the Scandinavian-Mediterranean and the one that connects the Rhine to the Alps. Aiming to the development of these infrastructures will allow, to our country, to gain a great competitive advantage towards the most important european competitors.
The challenge for our country is to encourage our ports to connect to the productive areas, promoting rail traffic, in order to make the most of our own growth potential.
Marfreight commitment towards sustainability
Intermodality, and, especially, the possibility to take advantage of italian inland port strategic position is the privileged way not only to guarantee that emissions cut the sector needs but also to offer a fast and advantageous transport service.
In our supporting role for the companies during shipment planning, we, Marfreights, pay so much attention even to these details, proposing among our solutions even intermodal connections. We do so not only to offer a service that complies as far as possible to our customers’ expectations and needs, but also to give our contribution to the sustainability path that the sector has started to take.