Threats of global trade fallout, increased demand for reusable packaging, significant drops in container capacity, and volatile automotive volumes are making headlines throughout the ocean shipping sector. Short on time? Check out our summary of the latest industry news for this week:
Week 25 Freight Updates
June 19th, 2020
COVID-19 Global Trade Fallout
The Organization for Economic Co-operation and Development (OECD) recently predicted that a second wave of COVID-19 will severely impact global trade recovery. Even if the virus is contained, the potential for companies to reroute sourcing poses a huge threat to international supply chains, especially for container shipping.
Automation Increases Demand for Reusable Packaging
According to a survey released by the Reusable Packaging Association (RPA), 81% of logistics service providers anticipate more demand for reusable transportation packaging as a result of increased automation. With additional increases in industry collaboration and standardization, single-use packaging seems to be on the decline with the introduction of improvements in operational efficiency.
Ocean Shipping Capacity Drops by 4.5 Million Containers
Due to unprecedented declines in demand and disruptive supply chain delays, ocean shipping lines and carriers have canceled approximately 4.5 million containers in an attempt to manage capacity and cut costs. Typically, this time of year is used to plan for peak season; however, the effects of the coronavirus pandemic have left companies struggling to find ways just to cover their operational expenses.
Automotive Industry Impacts Trans-Atlantic Trade Volumes
Data collected by IHS Markit showed that demand for automotive and machinery exports to North America has decreased by 40% and 14.3%, respectively, because of COVID-19 limitations. As carriers scramble to adjust capacity and volume remains volatile, the automotive industry could potentially experience a crisis a lot more severe than the one in 2008 if left unchecked.