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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.
The CBAM Regulation is law. We had already talked about it in a previous article, published at the time of the agreement between the members of the European Council and the European Parliament on the need to take measures to curb Environmental Dumping. The CBAM Regulation, we reiterate, starts from the need to impose a tax on industrial goods imported from non-EU countries onto the EU market that generate a significant volume of emissions due to their production.
Now, the new rules will be fully applicable as of 1 October this year. Here is what they provide for and who is directly affected.
CBAM: new rules on Environmental Dumping
The CBAM, which stands for Carbon Border Adjustment Mechanism, is the European regulation aimed at preventing goods imported from non-EU countries from having a competitive advantage due to the absence of carbon-related costs.
The regulation is part of the ‘Fit for 55’ programme, which aims to reduce greenhouse gas emissions by 55% by 2030.
The CBAM puts in place a mechanism for offsetting carbon emissions generated by the production of certain goods outside the EU, through the purchase of Certificates representing CO2 emissions.
Which goods will be affected by this new regulation?
Of course, those with the highest environmental impact, such as cement, iron, steel and aluminium products, fertilisers and electricity. The list of products is subject to possible expansion to include all products already subject to the ETS regulation by 2030.
When will the measures be operational?
The measure will be implemented in two separate phases.
The first will start on 1 October 2023 and will be a transitional phase, during which importers of goods will only be required to submit a quarterly report, which will specify: the total quantity of each type of goods imported during the reporting period, the related emissions and any costs incurred in the country of origin in relation to these emissions. The accuracy of the declarations will then be checked by the Commission.
The second phase will begin on 1 January 2026, when the Regulation will be fully operational and imports of CBAM goods into the EU can only be carried out by ‘CBAM registered declarants’, who will have to: calculate the amount of CO2 present in the imported goods, purchase certificates to offset emissions, and ensure that, at the end of each quarter, the number of certificates held covers at least 80% of the emissions included in all CBAM goods imported since the beginning of the calendar year.
The certiﬁcates must be returned by 31 May of each calendar year. By that date, an annual CBAM declaration must be submitted, stating the total quantity of goods imported in the previous calendar year, the total related emissions, the total number of returned certiﬁcates and a copy of the emission verification issued by an accredited body.
In order to become a CBAM declarant, each importer (or their indirect customs representative) will have to send an application to the relevant authority in their country, which will, or will not, enter them in the appropriate register.
With specialised and continuously trained personnel, Marfreight has always offered its customers comprehensive assistance in international cargo transfer operations, by land, sea and air. In recent months, our offices are working to ensure that the services offered always comply with international regulations, also and especially in view of the changes related to the CBAM regulation.
For more information, you can contact us here, we will be happy to answer your questions.
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.
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.