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John Good Logistics freight forwarding enjoyed a successful 2014 in terms of maintaining & developing our Far East customer base. Challenging as always, the trade continued its volatile rate swings as Lines continue to struggle to balance available capacity against demand. There appears no end in sight as we move into 2015 with market rates set to jump from the mid $1,000’s up over the $3,000 mark on 40’s as we approach Chinese New Year with ‘Peak Season’ surcharges and general rate increased been publicised across the board.
We have seen most carriers move towards alliances, with the already established ‘G6′ and ‘CKYHE’ being joined by the ‘2M’ & ‘Ocean Three’ alliances consisting of MSC & Maersk in the 2M and UASC, China Shipping & CMA CGM forming the Three Ocean.
In the 2M alliance, the market will see Maersk & MSC take a 37% market share on Asia Europe trade with 195 vessels and 2.4 million TEU of available capacity. So it will be interesting to see what affect that has on the rest as we move into 2015.
With 69 new builds set to join the Asia-Europe trade in 2015 and with smaller vessels being cascaded onto other trade lanes, the issue of capacity looks set to be the biggest challenge for Lines as they look to maintain market share and keep rates up at the levels they would like to make the trade pay.
With bigger, newer, more fuel efficient vessels, carriers’ overall slot cost on full vessels will drop but with only a 3% increase in cargo volumes against a 12% increase in capacity being forecast – it remains to be seen how successful they can be.
John Good Logistics – Far East
At John Good Logistics, we enjoyed an 11% increase in overall volumes coming in from Asia in 2014 against 2013 and we are very much focused on continuing to grow our business year on year.
2014 also saw the appointment of Peter Shan who is based in Shanghai as the UK Trade Manager for John Good Logistics. Having been with us for six months and getting up to speed with our approach and way of working, 2015 looks set to be a strong year for Peter and his appointment with undoubtedly strengthen our position.
Investment in IT
I.T. is set to continue to play an increasingly important role in how we develop our business with a growing appetite for increased visibility & traceability from our clients and the Forwarding industry as a whole. We are now able to offer a complete end-to-end solution including a detailed PO management system that allows customers to track their orders from placement through to delivery at final DC. We see the continued development of this system as a vital part to our continued success.
Chinese New Year
As most will know Chinese New Year (Year of The Goat) is fast approaching with the celebrations set to run from the 19th – 24th. We expect to see the usual mad rush in the run up and carriers are really eyeing the 1st of February as the date to push rates up. They will all be watching and keeping their fingers crossed that the market holds as they look at arrest the slump they have seen in the last quarter of 2014 and give themselves a stronger position for 2015.
Our MD, Alan Platt, has already made reference in an earlier blog to the issues the UK haulage industry finds itself in and we expect to see this come to the fore at certain pressure points throughout 2015. Please check back for regular updates as when get them, we will make them available.