The LEGO Group has launched a groundbreaking Supplier Sustainability Programme, urging its suppliers to take significant steps towards reducing carbon emissions. This initiative, which aims to cut emissions by 37% by 2032 and achieve net-zero by 2050, highlights the crucial role suppliers play in the company’s ambitious sustainability goals.

A Call for Collaboration

Over 99% of the LEGO Group’s carbon emissions originate from its supply chain, encompassing raw materials, machinery, and various services related to LEGO products. Recognising this, Annette Stube, the LEGO Group’s Chief Sustainability Officer, emphasised the necessity of collaboration: “A net-zero world is simply not possible unless we find solutions that extend beyond our own operations. We need to work in partnership with our suppliers to ensure a healthy planet for future generations.”

Steps Toward a Sustainable Future

The Supplier Sustainability Programme is a key component of the LEGO Group’s climate action strategy, which includes reducing energy consumption and transitioning to renewable energy. The company has already increased its solar capacity by 16% compared to 2022 and plans to double it by 2026. Additionally, an annual Carbon KPI has been introduced to monitor emissions across its factories, stores, and offices, ensuring progress toward short-term goals.

Carsten Rasmussen, LEGO Group’s COO, underscored the importance of sustainability in business practices: “Sustainability is a licence to operate and a requirement of how we do business, including how we select our suppliers. We have ideas and a pathway, but we cannot do it alone. The power of working together is crucial to creating real, lasting change and a more sustainable future.”

Key Supplier Requirements

Building on the Engage-to-Reduce programme launched in 2014, the new Supplier Sustainability Programme outlines specific actions suppliers must take:

– Provide data on carbon emissions associated with their products and services.

– Set near-term targets for emission reductions by 2026 and further reductions by 2028.

– Collaborate with the LEGO Group to develop initiatives to meet these targets, such as improving facility efficiency, switching to renewable energy, and finding less carbon-intensive transportation methods.

Starting this year, suppliers will be required to submit annual reports detailing their progress. The LEGO Group will support these efforts by sharing knowledge, particularly in carbon accounting, and offering access to a team of sustainability experts.

A Blueprint for Others

The LEGO Group’s Supplier Sustainability Programme is more than a call to action—it’s a comprehensive framework designed to foster collaboration, innovation, and sustainable practices across the supply chain. This initiative sets clear steps and goals, encouraging suppliers to significantly reduce their carbon emissions and embrace sustainable practices.

The programme’s success relies on the collective effort of all stakeholders. By setting near-term and long-term emission reduction targets, providing real-time data insights, and offering access to sustainability expertise, the LEGO Group is creating a model that others can follow. The adoption of this framework can lead to:

1. Industry-Wide Transformation: As more companies in the supply chain adopt these sustainable practices, the ripple effect could lead to a significant reduction in overall industry carbon emissions. This transformation can set new benchmarks for environmental responsibility in the manufacturing and logistics sectors.

2. Enhanced Innovation: Encouraging suppliers to innovate and develop new technologies or methods to meet sustainability targets can lead to breakthroughs in energy efficiency, renewable energy adoption, and low-carbon transportation solutions. This can stimulate a wave of technological advancements that benefit the entire industry.

3. Stronger Partnerships: The collaborative nature of the programme can strengthen relationships between the LEGO Group and its suppliers, fostering a sense of shared purpose and mutual support. This can lead to more resilient supply chains, better prepared to handle disruptions and challenges.

4. Improved Brand Reputation: By taking a leading role in sustainability, the LEGO Group enhances its brand reputation as an environmentally responsible company. This can attract like-minded partners, customers, and investors, further promoting sustainable business practices.

5. Regulatory Compliance and Leadership: As governments around the world increasingly focus on environmental regulations, companies that proactively implement such sustainability frameworks will be better positioned to comply with new laws and regulations. Moreover, they can influence policy by demonstrating effective and scalable solutions.

6. Long-Term Cost Savings: Sustainable practices often lead to increased efficiency and reduced waste, resulting in long-term cost savings. Companies that adopt the framework can benefit from lower energy costs, reduced material usage, and other operational efficiencies.

In conclusion, the LEGO Group’s Supplier Sustainability Programme is a visionary blueprint that, if successfully adopted and implemented, can drive significant positive change across the entire supply chain and beyond. By building a foundation of sustainability, innovation, and collaboration, the LEGO Group is not only working towards its own environmental goals but also paving the way for a greener and more sustainable future for all.

The Role of Real-Time Data and Insights

To ensure the success of this programme, implementing supply chain and climate impact visibility software is essential. This technology provides real-time data insights that are crucial for Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) to make informed, business-critical decisions.

For the LEGO Group, real-time tracking of Scope 3 emissions from their own and their partners’ shipments will be particularly valuable. This capability allows them to monitor emissions as they occur, enabling a more agile and responsive approach to achieving their sustainability goals. By continuously observing emission changes, LEGO can more effectively adjust their strategies to mitigate shipping-related emissions, ensuring they stay on track to meet their environmental targets.

Beyond achieving environmental targets, real-time visibility will allow the LEGO Group and their partners to navigate impacts on their respective supply chains more effectively. This ensures smoother operations and greater adaptability in a dynamic market environment.

The recent disruption and delays to air cargo services due to a global IT outage have underscored the fragility of supply chains worldwide. 

On Friday the 19^th of July the global IT blackout highlighted the fragile nature of global logistics and supply chains. This blackout was caused from a faulty update to the Microsoft cybersecurity software, deployed by Crowdstrike, which temporarily grinded certain supply chains to a dead stop. From road haulage not being able to access the Port of Felixstowe to major air hubs in Europe, Asia and North America grounding all air traffic. Meanwhile, seaport and rail port operations seemed to have been minimally affected by the outage. 

Whilst all supply chains are complicated, air supply chains are particularly so and disruptions of this kind will have knock on effects for weeks according to Xeneta’s chief airfreight officer, Niall van de Wouw. As resources and cargo aren’t where they are supposed to be when they supposed to be, causing supply chains to be reshuffles to compensate. 

There is an added component with Air Freight due to the current capacity limitations being experienced in the sector. Data from Xeneta suggests that global demand for air freight in June jumped 13% year to year. These two factors reinforce that air freight will take time to recover from the IT outage. 

However, it seems that this may only be the case for certain airhubs with others being better prepared by having contingencies in place to deal with the exact outage that was experienced on Friday. This was the case with Heathrow Airport as “Operations quickly returned to business as usual. While some systems for some airport partners were impacted by the global IT issues on Friday morning, contingencies were put in place and flights continued to operate.”, according to a spokesperson. 

As mentioned earlier the operations of sea and rail ports were minimally affected by the IT blackout this does not mean they won’t feel ripple effects in the coming days and week in these respective ports. For instance, a greater a level of congestion is likely to be experienced at most ports. Due to the lack of onward travel caused by the blackout of Friday. Although industry analysts have concluded that this disruption shouldn’t last past the end of the week. 

Beyond the delays and disruptions caused by the IT blackback, it will act as a stark reminder to the whole of the supply chain industry just how vulnerable and fragile it is.  With technology acting as a source of life and innovation in the industry but also be the ultimate source of its demise should it not be there, such as was seen on the Friday 12^th. Underpinning the need for redundancies and alternative systems to be in place and tested frequently, thus minimising the affect of future outages on the industry, 

The Need for Real-Time Data Insights

These disruptions highlight a critical need for visibility in supply chains through real-time data solutions. By implementing advanced supply chain visibility software, Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) can gain vital insights to make business-critical decisions quickly. These insights enable stakeholders to counteract impacts on their supply chains, ensuring smoother operations and greater adaptability in the face of disruptions.

Investing in technology that provides real-time data not only helps mitigate the immediate effects of such outages but also builds a more resilient supply chain capable of withstanding future challenges. As the global logistics landscape continues to evolve, the integration of robust data analytics and visibility tools will be essential in maintaining operational continuity and efficiency.

Liege Airport, a crucial hub for ecommerce shipments into Europe, has reported a significant 15% increase in tonnage during the first half of this year, reaching 566,117 tonnes. Cargo movements also surged by 12%, totalling 12,987. Last year, the airport handled 1,005,676 tonnes, and projections for 2024 indicate continued substantial growth.

Chief Executive Officer of Liege Airport, Laurent Jossart, attributed this expansion to a growing roster of airlines and logistics providers. “With over 40 airlines and more than 50 logistics providers, including newcomers like Hong Kong Air Cargo and My Freighter Airlines, Liege Airport is diversifying its market presence,” noted Mr. Jossart. “We anticipate sustained positive momentum throughout the year.”

However, the airport faces challenges stemming from the influx of ecommerce imports from China, prompting recent scrutiny over customs procedures. Known for its operational flexibility, capacity, and round-the-clock operations, Liege remains a favoured hub for cargo airlines.

Despite its smaller size, Liege Airport handled 95,514 tonnes in June alone, marking a robust 21% increase year-on-year. In contrast, Frankfurt Airport reported 178,324 tonnes for June, up 11.4%. This growth rate positions Liege Airport as a market leader, surpassing the global demand increase reported by Xeneta, which stood at 13% in June.

The ecommerce sector continues to propel this growth, with airlines keen to capitalise on expanding market opportunities. Lufthansa Cargo, for instance, has announced additional flights to China in response to rising demand. “The ecommerce segment, particularly in the Chinese market, is growing steadily,” stated Lufthansa Cargo CEO Aswin Bhat. “We see high demand, especially for routes to Europe.”

Lufthansa Cargo has recently integrated Shenzen Boa’an Airport (SZX) into its freighter network with twice-weekly flights, while also increasing flights to Zhengzhou (CGO), now operating three times a week. Zhengzhou, a hub for Cargolux and attracting attention from Challenge Group, is poised for expanded operations.

Enhancing Supply Chain Visibility

In light of this dynamic growth, the importance of robust supply chain visibility software becomes increasingly apparent. Real-time data insights are crucial for BCOs and Logistics Service Providers (LSPs) to navigate disruptions and optimise supply chain operations effectively. Such technologies empower stakeholders to make informed, timely decisions, ensuring resilience and efficiency amidst evolving market demands.

As Liege Airport continues to expand its footprint and handle burgeoning ecommerce volumes, integrating advanced supply chain visibility solutions will play a pivotal role in sustaining operational excellence and meeting customer expectations in the competitive global logistics landscape.

With the Red Sea crisis showing no signs of abating, vessels travelling between Asia and Europe are increasingly opting to reroute around the Cape of Good Hope. This change presents a fresh challenge for European importers and their logistics service providers (LSPs): identifying the final cut-off date for Christmas goods departing from Asia.

The Surge in Spot Rates: Is This an Early Peak Season?

Over the past two months, the logistics industry has been abuzz with discussions about the causes behind soaring spot rates. A key question is whether we are witnessing an early peak season. Many European forwarders believe this to be the case, which raises another question: when will it end?

This year, the Asia-Europe peak season is expected to conclude two weeks earlier than usual. This adjustment makes the timing of China’s Golden Week holiday particularly challenging. Starting on 1 October, China halts operations for a week, leading to a rush at ports beforehand to maximise cargo exports, often followed by a surge once work resumes.

“If you don’t get your cargo on the ship and miss the last vessel out of Asia at the end of September, peak season will be very challenging. That’s when we’ll start to see a spike in air freight,” a senior forwarder told The Loadstar.

Timing for Christmas Shipments: The Crucial Dates

Most retailers aim to have all goods in their system two weeks before Christmas, meaning all shipping and transport from ports must be completed by 10 December at the latest. Considering current haulage booking waits in the UK, which are around seven days, vessels need to arrive by approximately 23-24 November. Proforma schedules from several carriers indicate that the current transit time from Shanghai to Felixstowe is between six and seven weeks, assuming no delays.

For example, the 2M’s AE55/Griffin Sweeper service, departing Shanghai on 5 October, is scheduled to arrive at Felixstowe on 16 November. Another departure from Shanghai on 12 November has an ETA of 23 November, both with transit times of 47 days. The Ocean Alliance’s NEU1 and NEU6 services advertise transit times of 42-44 days for the same route.

However, with global schedule reliability currently at around 50% and vessel arrivals averaging five days late, it is uncertain whether cargo loaded on these ships during Golden Week will reach the UK in time for distribution and retail by Christmas.

The Importance of Real-Time Supply Chain Visibility

In light of these challenges, the implementation of real-time supply chain visibility software becomes essential. This technology provides Beneficial Cargo Owners (BCOs) and LSPs with critical data insights, enabling them to make informed business decisions and mitigate supply chain disruptions.

“I believe this is indeed an early peak season, but I also think it will extend until Golden Week. After discussions with customers, they are aware of the current challenges and do not want to risk having no stock for Christmas. They are planning for strong orders up to that point,” a forwarder explained to The Loadstar.

Real-time data insights from visibility software can help manage these complexities, offering accurate information on vessel locations, potential delays, and alternative routes. This proactive approach is vital for navigating the early peak season and ensuring the timely delivery of Christmas goods despite ongoing disruptions.

In conclusion, as the Asia-Europe peak season shifts earlier and the Red Sea crisis persists, the necessity for real-time supply chain visibility is clearer than ever. By leveraging advanced technology, BCOs and LSPs can enhance their decision-making capabilities, ensuring resilience and efficiency in their supply chains during these critical periods.

The market share of independent container shipping services on major east-west deep-sea trades has been on the rise in recent months, nearing levels observed during the pandemic. New data from Sea-Intelligence Consulting reveals this significant shift, underlining the dynamic nature of global shipping and the critical need for advanced supply chain visibility software. Such technology offers real-time data insights, aiding Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) in making pivotal business decisions.

Sea-Intelligence Consulting reports that nearly one-third of services on the transpacific trade over the next three months are anticipated to be provided outside traditional vessel-sharing agreements. This includes express services independently operated by alliance-member carriers. “The Asia-North America West Coast tradelane is poised to see a sharp increase in the capacity share of non-alliance services in the coming months,” stated Sea-Intelligence chief executive Alan Murphy. “The data shows that nearly 30% of the deployed capacity on the tradelane is scheduled to be offered on services operated outside of the alliance structures.”

Key Developments and Statistics

This trend extends beyond the transpacific trade. A similar pattern is emerging on the Asia-North Europe tradelane, although it is less pronounced on the Asia-North America East Coast and Asia-Mediterranean routes. “On Asia-North Europe, if the current 12-week outlook holds, we will see record levels – touching 12% – of non-alliance capacity,” Murphy noted.

Among these independent services is MSC’s new Asia-North Europe Britannia service, which will make its first European stop at the UK port of Liverpool. Additionally, Ellerman City Lines is returning to the trade with several China-UK sailings scheduled for this month and the next, having initially entered the trade during the pandemic demand surge.

Market Dynamics and Future Prospects

Murphy highlighted that the surge in demand for goods, coupled with rising spot rates, has driven a significant increase in non-alliance capacity. This trend was evident even in traditionally alliance-dominated trades like Asia-North Europe, which saw the entry of several niche carriers offering standalone services. Although many of these carriers exited the trade when spot rates fell in late 2022 and early 2023, the market has once again shifted in their favour.

“Across the main east-west trades, it is clear that the main driver of the non-alliance share is spot rates; a sharp increase during the pandemic triggered a sharp increase in non-alliance services – and vice versa when spot rates collapsed in the second half of 2022. This pattern is now repeating, as the sharp spot rate increases seen in recent months again coincide with an increase in non-alliance services,” Murphy explained.

However, a more fundamental change is expected next year with the conclusion of the Maersk and MSC 2M partnership. MSC, which now controls around 20% of global container shipping capacity, will operate entirely outside the formal alliance structure, signalling the end of an era where east-west trade was predominantly controlled by three vessel-sharing agreements.

The Importance of Real-Time Data Insights

Given these market shifts, the implementation of supply chain visibility software becomes indispensable. By providing real-time data insights, this technology supports BCOs and LSPs in making informed, business-critical decisions. In the face of dynamic industry changes, having accurate and timely information is essential to mitigate potential impacts on supply chains. This comprehensive approach highlights the necessity of leveraging advanced technology to enhance operational resilience and efficiency in a rapidly evolving market.

In conclusion, the resurgence of independent shipping services underscores the fluidity of global trade and the vital need for cutting-edge visibility tools. As the industry navigates these transformations, stakeholders equipped with real-time data insights will be better positioned to succeed in this competitive landscape.

Since the introduction of peak season surcharges (PSS) and new Freight All Kinds (FAK) levels on 1 July, the largest east-west container trades have witnessed a significant surge in spot freight rates. After a period where the focus was primarily on the escalating rates for Asia-Europe trades, the spotlight has shifted to the Asia-North America routes, which are now experiencing substantial rate increases.

Drewry’s World Container Index (WCI) reported a 12% increase for its Shanghai-Los Angeles route, reaching $7,472 per 40ft container, while Xeneta’s XSI for the Asia-US West Coast route showed a rate of $7,648 per 40ft. The Shanghai-New York leg also saw a sharp rise, with WCI recording a 17% increase to $9,158 per 40ft, and XSI reporting $9,146 per 40ft.

This trend extends beyond transpacific routes. The WCI’s Shanghai-Rotterdam leg climbed by 10%, reaching $8,056 per 40ft, and the XSI’s Far East-North Europe rate also increased, reaching $7,897 per 40ft.

Challenges and the Need for Real-Time Data

In the face of soaring demand and limited space, many Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) are paying premiums well above indexed rates to secure container space. This is impacting even the largest shippers on Asia-Europe routes, despite their substantial contracted volumes.

European freight forwarders have reported that major shippers are now required to pay additional surcharges to guarantee space for their shipments. “Importers and large BCOs are starting to feel the pinch as space becomes scarcer,” noted one forwarder. “Even carriers maintaining full volume commitments are operating at 30% to 40% reduced space. By mid-July, retailers on contracts are facing $3,000-$4,000 surcharges on some of their shipments to get them onboard.”

This situation underscores the critical importance of implementing visibility supply chain software. With real-time data insights, BCOs and LSPs can make informed, strategic decisions to manage the impacts on their supply chains more effectively. As the market tightens and rates rise, access to timely information on shipment status and market trends becomes crucial.

Market Outlook and Strategic Planning

Industry experts widely agree that the current elevated rates will likely continue through China’s Golden Week holiday starting on 1 October, and potentially extend into the second quarter of next year. “Asia-North Europe spot rates have already surpassed $10,000 for many customers,” one analyst observed. “This trend is expected to persist until Golden Week as companies aim to avoid stock shortages for the holiday season and anticipate strong order volumes through the end of the year.”

If the peak season extends to Golden Week, there will be only a brief respite before the pre-Chinese New Year peak begins. Consequently, the market might not see a significant downturn until Q2 next year, even with additional capacity being added. Some analysts predict a further 50% increase in rates by Golden Week. “Demand in July and August is robust, and a ceiling of $15,000 is not out of the question,” one expert noted. “We are now booking four weeks in advance for some retailers, with the earliest available space around 9 August.”

The current surge in freight rates emphasises the unpredictable nature of global shipping and the essential need for advanced supply chain management tools. Adopting visibility supply chain software that provides real-time data insights is vital for BCOs and LSPs to navigate these challenging conditions. By utilising these insights, stakeholders can make critical business decisions, ensuring smoother operations and greater resilience in an ever-changing market landscape.

Global container traffic soared to new heights in May, with Container Trade Statistics (CTS) reporting a record-breaking month. This surge was primarily driven by a substantial increase in intra-Asia trade, which experienced a year-on-year growth of 14.4%, totalling over 4.5 million TEU.

Other significant contributors to this growth included the Far East-North America trade, which saw a 5.9% year-on-year rise to just over 2 million TEU, and the Far East-Europe trade, which grew by 2.9% year-on-year, reaching slightly over 1.5 million TEU. These volume increases are now being reflected in the CTS price index, which covers both spot and contract rates, with a noticeable rise in rates for transpacific and Asia-Europe trades.

The CTS price index for the Far East-North America route increased by 12.6% year-on-year, while the Far East-Europe route saw a 15.3% rise. This trend likely reflects the impact of annual contracts negotiated this year between carriers and major shippers. Traditionally, the US contract season runs from May 1 to April 30, but European shippers are beginning to adjust their timelines, with many now running contracts from April to the end of March. A UK-based forwarder noted that retailers like Primark have adopted this new contract period, influenced by carriers’ reluctance to renew contracts during periods of low spot rates.

Hapag-Lloyd CEO Rolf Habben Jansen addressed this issue in November, stating, “We see expectation out there for contract rates that are unrealistic, and at those levels we will not close, because we’re not going to close contract rates at levels where we, for sure, will lose a lot of money.”

Geopolitical factors, such as the Houthi attacks on Red Sea shipping, have further complicated the situation, leading to vessel diversions and shifts in trade patterns. Despite these challenges, the CTS report for May also highlighted increased activity in secondary trades due to rising demand and prices.

The Far East-Middle East/India trade, now the fifth-largest trade route globally, grew by 5.3% in May, reaching 750,000 TEU, with a price index increase of 16.2% driven by congestion and equipment shortages. The Far East-Latin America trade experienced a remarkable 19.8% growth in volume, with prices soaring 40.3% year-on-year. Additionally, the Far East-Southern Africa route saw a 34.3% increase in prices despite a modest volume growth of 1.2%.

Emphasising Real-Time Supply Chain Visibility

These dynamic shifts in global container traffic highlight the critical importance of real-time supply chain visibility. Implementing advanced supply chain visibility software is essential for Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) to make strategic, data-driven decisions. By providing accurate and timely data, these tools help stakeholders mitigate the impacts on their supply chains, navigate disruptions, and optimise logistics strategies effectively.

The new data underscores the ever-evolving nature of global trade and the necessity for robust, responsive supply chain management solutions. Leveraging real-time insights will be crucial for maintaining resilience and competitiveness in the global market.

British manufacturing activity growth slowed in June from May’s 22-month high, as ongoing disruptions to shipping in the Red Sea contributed to lower demand from overseas customers, according to a survey released on Monday. The S&P Global’s UK Manufacturing Purchasing Managers’ Index (PMI) dropped to 50.9 in June from 51.2 in May. The final reading was lower than the 51.4 recorded in the provisional June data.

S&P Global noted that the overall picture remains positive, with output and new orders both rising. However, employment fell, delivery times lengthened, and manufacturers’ input costs rose at the fastest pace since January 2023. “Shipping issues resulting from the Red Sea crisis, low stocks at suppliers, insufficient vendor capacity, and port issues all led to longer lead times,” S&P Global reported.

Despite output and overall new orders growing at close to their fastest pace in two years, export orders fell for the 29th consecutive month, primarily due to shipping delays and high freight costs. The disruptions to international shipping have been ongoing since November, caused by attacks launched by Yemen’s Houthi militants, an Iran-aligned group. These attacks are claimed to be in solidarity with Palestinians in the conflict between Israel and the militant Islamist group Hamas. Many vessels have opted to avoid the Red Sea route to the Suez Canal, instead taking the longer journey around the southern tip of Africa.

Economic Context

Official figures released on Friday showed Britain’s manufacturing sector, which accounts for 10% of the economy, grew at a quarterly pace of 1.1% in the first three months of 2024. This represents the second-strongest quarterly expansion since the start of 2021. However, goods export volumes fell by 3.5% in the first quarter. The Office for National Statistics attributed this decline largely to trading in non-monetary gold, an erratic item that often distorts British trade statistics.

Need for Supply Chain Visibility Software

To mitigate the impacts of such disruptions, the implementation of supply chain visibility software is crucial. Real-time data insights provided by this technology can assist Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) in making critical business decisions. By leveraging these insights, stakeholders can effectively manage disruptions, anticipate delays, optimise routing, and adjust to changing conditions, ensuring smoother operations and greater adaptability in a dynamic market environment.

Enhancing Supply Chain Decision-Making

The strategic implementation of supply chain visibility software, combined with real-time data insights, underscores a comprehensive approach to maintaining and enhancing the operational efficiency and reliability of supply chains. This holistic strategy not only addresses current challenges but also prepares businesses for future demands, ensuring resilience and sustained growth in the face of global disruptions. By providing BCOs and LSPs with the tools needed to counteract impacts on their respective supply chains, this technology plays a vital role in maintaining the stability and competitiveness of British manufacturing in a volatile global market.