[FFW News] Trade drops by 1.3 percent on Red Sea Tensions

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🚢Ceramic kiln - Pennsylvania, USA to Palau

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📈 BY THE NUMBERS: Important numbers impacting freight and logistics

⛽ Diesel: $3.828 gal (🔼from $3.876 last week) - Source: EIA

✈️ Air Cargo Index (Nov ‘23): 169.3 (🔼from 166.4 in Oct ‘23) - Source: FRED

🚢 Global Container Index: $2,613.00 - Source: Freightos

Logistics News for Jan. 16, 2024

⚔️China’s commercial stake exposed by ongoing Red Sea conflict

China has called for an end to Houthi attacks on civilian vessels in the Red Sea due to the widening conflict between the Israeli military and Hamas. This reveals Beijing’s commercial interests and concerns along the Suez Canal-Red Sea corridor. Backed by Iran, the Houthi militia currently controlling portions of Yemen backs Hamas and seeks the “Death to Israel.” Read more…

🔪War-risk insurance for Red Sea driving shipping costs

Insurers are concerned about the driving cost of war-risk insurance for many commercial vessels sailing through the Red Sea. This will lead to increased costs passing through the interconnected waterway. Underwriters are now charging between .75 percent to 1 percent of the value of the vessel for other shipping operations in this region. This is linked to the Israel-Hamas tensions. More…

⏬Global trade drops by 1.3 percent due to the Red Sea crisis

Global trade volumes have dropped by 1.3 percent from Nov to Dec 2023 as Houthi attacks in support of Hamas in the ongoing conflict with Israel. German economic institute IfW Kiel issued the warning as it relates to the markets in the United States and Western Europe. China is bucking the trend despite the rise in exports, up 1.3 percent, and imports, up 3.1 percent. PRC is at risk, though. More

😎Nearshoring makes Mexico the largest trading partner with the USA

Due to the increase of nearshoring, Mexico is the USA’s top trading partner for all of November 2023. Laredo, TX, is again the busiest economic port of entry into the United States. Two-way commerce between the U.S. and Mexico totals $65.8 billion, making it the number 1 trading partner for 10 times in a row in the past 11 months, according to the U.S. Census Bureau. Canada is second. More…

🚂Maersk circumventing Panama Canal hold-ups by rail freight

Maersk announced that it is circumventing the backup in the Panama Canal by switching to a “land bridge,” creating separate rail loops, one for cargo headed to the Atlantic and another for the Pacific. The canal is still suffering droughts and low water levels. “We are working diligently to minimize any impacts to your supply chain, and we remain in close contact with the Panama Canal Authority to ensure that we can give you timely updates,” Maersk said in a statement. Read…

☕Read these stories over your morning coffee...☕

• “Why US strikes in Middle East are rekindling fears over oil and inflation” - Financial Times

• “China’s economy to take time to regain its mojo…” - South China Morning Post

• “Despite Red Sea crisis inflation shock, ocean freight rates are headed down on key China-U.S. trade route” - CNBC.com

• “Researchers Propose $2 Trillion Plan to Transform the Shipping Industry” - OilPrice.com

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Compiled by Michael McGrady – news analyst and writer.

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