Mediterranean Shipping Company (MSC), the world’s largest container line, has once again expanded its orderbook with a substantial investment in new containerships from Chinese shipyards. As the Swiss-Italian giant widens the gap over its competitors, it continues to prioritise decarbonisation and supply chain resilience.

According to Clarksons’ data, MSC has placed orders for six 19,000 TEU vessels at Shanghai Waigaoqiao Shipbuilding (SWS) and eight 11,500 TEU vessels at Penglai Zhongbai Jinglu Ship Industry (Jinglu). All 14 ships will be dual-fuelled, capable of running on LNG, reflecting MSC’s strategy to balance growth with environmental responsibility. Notably, this is Jinglu’s first foray into constructing large boxships, having primarily built feeder vessels. The commission includes options for an additional four vessels, showcasing MSC’s long-term confidence in market growth.

This fresh wave of orders follows the recent announcement by Zhoushan Changhong International Shipyard, revealing MSC’s order for 12 19,000 TEU LNG dual-fuelled vessels. These are in addition to earlier commitments for ten 11,500 TEU and ten 10,300 TEU ships. Deliveries for all these vessels are expected between 2027 and 2028. While the exact costs remain undisclosed, VesselsValue estimates that a 17,000 TEU LNG-powered ship is priced at around $205 million. With MSC’s ongoing investment spree, the total expenditure could exceed $6 billion.

This marks the first time in nearly a decade that SWS has secured orders for ultra-large vessels, with their last deal involving 20,000 TEU ships for Cosco in 2015. The new orders are part of a broader trend, as evidenced by reports earlier this month that MSC was eyeing an order for ten 21,000 TEU ships at China’s Jiangsu Hantong Ship Heavy Industry—another shipbuilder making its debut in the large container segment.

Currently, MSC’s operational fleet capacity exceeds six million TEU, including 3.07 million TEU on owned ships. The carrier’s orderbook now stands at 1.64 million TEU. In contrast, its closest competitors, Maersk Line and CMA CGM, operate fleets of 4.35 million TEU and 3.8 million TEU respectively. While CMA CGM has also been aggressively expanding, with an orderbook of 1.12 million TEU, MSC remains far ahead in the race for global dominance.

The surge in newbuildings comes despite global shipping turbulence, with the Red Sea crisis adding to market uncertainties. However, Clarksons noted that even as new boxship deliveries hit record levels, all the new capacity is being fully absorbed, highlighting the robustness of demand despite a volatile economic environment. The global containership fleet grew 5.7% in the first half of this year and is projected to grow by 10% overall in 2024, with deliveries hitting an all-time high of 2.9 million TEU.

A critical aspect of this expansion is the focus on decarbonisation. With shipowners exploring alternative fuels to align with stricter environmental regulations, MSC’s shift towards LNG reflects a pragmatic choice. LNG not only has a proven supply base but also positions carriers to meet near-term carbon targets while maintaining operational flexibility.

Leveraging Technology for Smarter Decision-Making in Supply Chains

As MSC ramps up capacity and prioritises sustainability, the need for real-time visibility in supply chains becomes more crucial than ever. Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) must adapt to a rapidly evolving market where decisions hinge on accurate and timely data. Supply chain visibility software that provides real-time insights into vessel movements, port congestion, and carbon footprints will be critical in enabling these stakeholders to make informed, business-critical decisions.

With rising complexities in global logistics and an increasing focus on sustainability, advanced software solutions can help companies navigate potential disruptions, optimise routes, and better manage inventory flow. Integrating this level of visibility will be key in counteracting the impacts of growing capacity and shifting market dynamics, ensuring that BCOs and LSPs remain agile and competitive.

MSC’s massive investment in new, eco-friendly vessels isn’t just about fleet expansion—it’s about setting a benchmark for the future of shipping. However, to fully capitalise on this growth, stakeholders across the supply chain must embrace technological advancements that offer the real-time insights needed to stay ahead in a fast-changing industry.

Yemen’s Houthi rebels have been targeting merchant shipping in the Red Sea for months, creating significant threats to both human life and global trade. While the world’s focus has been rightly centred on the risk to vessels and cargo, the environmental impact of these disruptions is also substantial—and often overlooked. According to energy trading firm Trafigura, tanker diversions around the Cape of Good Hope due to security concerns in the Red Sea will result in the consumption of an additional 200,000 barrels of fuel oil per day this year. This alone is expected to raise the tanker fleet’s annual emissions by a staggering 4.5 percent.

The Shift to Longer Routes and Its Ripple Effect on the Supply Chain

Despite the risks, many vessel operators still use the Red Sea route between the Indian Ocean and the Mediterranean, as it remains shorter and usually less expensive. The shipping industry has developed best practices to mitigate security threats for Red Sea voyages. However, more ship managers are now recommending the longer but safer route around Africa’s southernmost tip, avoiding the Red Sea entirely.

A significant portion of the container ship fleet has already made this switch, joined by many tankers and gas carriers. However, this detour adds an extra 2,000-3,000 nautical miles to Asia-Europe or Asia-US East Coast voyages. Consultancy Vespucci Maritime estimates that the additional distance sailed by container ships alone each week now exceeds the distance from the Earth to the Moon. To minimise delays, many vessels have increased their speed, further escalating fuel consumption. Trafigura notes that when container ships and other vessel types are factored in, an additional 500,000 barrels of fuel oil per day will be consumed by the shipping industry in 2024.

The Growing Demand for Real-Time Supply Chain Visibility

The surge in fuel consumption and emissions is a wake-up call for the logistics sector, especially for Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) who are grappling with the ripple effects on supply chains. The need for real-time visibility software has never been more pressing. Advanced supply chain and climate impact monitoring solutions can provide BCOs and LSPs with critical data insights, enabling them to make informed decisions about route planning, timing, and cost management.

Such solutions can help stakeholders anticipate delays, optimise routing strategies, and assess the carbon impact of their operations. In a volatile environment where shipping routes are frequently disrupted, having access to real-time data becomes essential for maintaining supply chain resilience and minimising unforeseen costs.

Environmental and Economic Implications of the Red Sea Crisis

The environmental impact extends beyond just emissions. The International Energy Agency (IEA) projects a notable increase in global bunker fuel demand due to these diversions—estimated at around 200,000 barrels per day. The increase will be especially evident in regions like Singapore, which serves as a primary hub for bunker fuel on east-west trade routes and is already experiencing congestion tied to the crisis.

These diversions and the resulting fuel consumption underscore the need for more sustainable and adaptive supply chain strategies. Companies that implement visibility tools not only gain the ability to mitigate risks but can also track and reduce their environmental footprint—an increasingly vital consideration in today’s eco-conscious market.

A Strategic Imperative for the Future

As the maritime industry faces ongoing challenges in the Red Sea, the long-term solution lies not only in route adjustments but also in leveraging technology for smarter decision-making. Real-time visibility platforms are set to play a pivotal role in helping BCOs and LSPs navigate the complexities of this crisis while balancing operational efficiency with environmental responsibility.

In summary, while the immediate focus remains on safeguarding shipping operations and cargo, the broader industry must embrace innovations that provide both supply chain stability and climate impact insights. By adopting these tools, businesses can ensure they remain agile and resilient in an increasingly unpredictable global trade landscape.

As nearshoring gains momentum, Mexico has emerged as a key beneficiary of companies shifting supply chains closer to North America. However, industry leaders warn that the country’s potential to fully capitalise on this trend is being undermined by insufficient investment and strategic planning. According to the Mexican Chamber of the Construction Industry (CMIC), these shortcomings are already weighing heavily on the economy.

“Logistical and transportation deficiencies cost Mexico about 169.3 billion pesos ($8.82 billion) in 2023,” said CMIC national president Luis Mendez. He emphasised that significant investment in transport and logistics infrastructure is urgently needed to avoid stalling Mexico’s growth prospects in the nearshoring landscape.

CMIC is advocating for public spending on infrastructure to increase to 5% or 6% of GDP, with a substantial portion allocated to logistics and transport. Priority areas include the modernisation of roads, railways, ports, and airports, as well as sustainable urban mobility systems. These improvements are vital for ensuring the efficient flow of goods and reducing costly delays, especially as international companies increasingly view Mexico as a manufacturing and distribution hub.

Aligning Public and Private Investment for Strategic Growth

In addition to security concerns, inadequate infrastructure is one of the primary deterrents for foreign investors and companies considering Mexico as a production base. While private firms have poured resources into upgrading facilities, such as container terminal expansions, these efforts have not been met with corresponding public investments in road infrastructure and industrial parks. This disconnect between public and private spending is a critical bottleneck that must be addressed.

CMIC and other industry groups are urging the incoming government to prioritise infrastructure projects that enhance global value chains and stimulate regional economic activity. This includes a focus on multimodal logistics connectivity projects designed to eliminate bottlenecks in final-mile services, which are essential for seamless supply chain operations. A more strategic approach is required, one that aligns public infrastructure development with industry needs and market demands.

The Mexican Association of Port, Maritime, and Coastal Infrastructure recently called on the National Port System Administration (Asipona) to collaborate with the private sector on a comprehensive development plan that supports Mexico’s growing role in global trade.

A Wake-Up Call: Manzanillo’s Traffic Jam Highlights Infrastructure Risks

Recent events at the Port of Manzanillo underscore the urgent need for better strategic planning. On 31 July and 1 August, road access to the port was blocked, leaving some 5,000 trucks and vehicles stranded for up to 24 hours. The cause of the gridlock remains disputed, with some attributing it to customs system failures while others blame changes in truck parking arrangements. Regardless of the trigger, the episode highlighted the vulnerability of Mexico’s logistics networks to even minor disruptions.

The port of Manzanillo, Mexico’s largest Pacific gateway, handles over 4,000 truck calls daily, and trucking activity rose 9% year-on-year in the first half of 2023. Despite the port’s throughput growing 4% in the first quarter and box traffic climbing 11.5% to 935,710 TEU, the persistent congestion reflects broader infrastructure challenges that could jeopardise Mexico’s nearshoring advantage.

While investment within the port is progressing—terminal operator Contecon recently unveiled two 60-metre ship-to-shore cranes, reportedly the tallest in North America—external infrastructure, particularly road and rail access, remains a pressing concern. These infrastructure gaps not only slow down operations but also increase costs for businesses relying on Mexico as a logistics hub.

The Role of Supply Chain Visibility and Real-Time Data

As Mexico navigates these challenges, there is a growing need for supply chain visibility solutions that provide real-time data insights. Beneficial Cargo Owners (BCOs) and Freight Forwarders require these tools to make business-critical decisions and adapt swiftly to potential disruptions. Real-time data can help companies counteract the impacts of infrastructure deficiencies, ensuring that supply chains remain resilient despite external challenges. Climate impact visibility software can also assist businesses in aligning their operations with sustainability goals while mitigating the risks associated with environmental factors.

Operators and industry stakeholders hope that the incoming government will adopt a more strategic growth strategy, focusing on comprehensive transport infrastructure development. CMIC has outlined a “strategic project bank” that details the steps needed to support Mexico’s nearshoring momentum, including improved alignment between public agencies and industry players.

As global supply chains continue to grapple with unprecedented challenges, shippers should brace for ongoing volatility in container shipping markets through 2025. Although operations through the Suez Canal have resumed, immediate relief from disruptions and soaring freight rates remains uncertain. The lingering impacts of the Red Sea crisis and broader geopolitical tensions are set to keep the shipping industry on edge, with fluctuating rates and capacity constraints likely to persist.

The potential for continued disruption is significant. If the crisis in the Red Sea endures and a large portion of the global container fleet remains rerouted around southern Africa, global shipping capacity will remain constrained. This persistent pressure on capacity will inevitably lead to further instability, making it difficult for shippers to plan with confidence.

The Ripple Effects of Resuming Suez Canal Operations

Even if the situation in the Middle East stabilises and the Suez Canal fully reopens, the global shipping industry could face a new set of challenges. A sudden influx of ships taking the shortcut through the canal could result in severe port congestion in Europe. This congestion would create a domino effect, disrupting shipping schedules and impacting services arriving from other regions, including Africa, Latin America, and North America.

This bottleneck would delay the normalisation of freight rates, prolonging the period of high costs and uncertainty for shippers. It is only after this congestion is worked through that market rates might begin to decrease, but any reduction is expected to be gradual rather than dramatic.

Looking Forward: What to Expect in 2025 and Beyond

As the industry moves towards 2025, there are signs that the worst of the volatility may be behind us. With the delivery of new vessels increasing capacity, both contract and spot rates are expected to soften, assuming no further major disruptions occur. However, while rates may ease, they are unlikely to return to the extremely low levels seen in late 2023.

The traditional peak season surge in rates, particularly around the Chinese New Year, will likely persist. Nevertheless, due to the steady influx of new vessels, rates in Q3 of 2025 are not expected to reach the record highs of 2024. Shippers should prepare for some relief, but also recognise that market conditions will remain dynamic, with rates adjusting to the evolving balance between supply and demand.

The Importance of Real-Time Supply Chain Visibility

In this environment of ongoing uncertainty, the need for real-time supply chain visibility has never been more critical. Shippers, including Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs), must be equipped with tools to make informed, strategic decisions that can mitigate the impacts of market volatility on their operations.

Implementing advanced supply chain and climate impact visibility software provides the real-time data insights necessary to navigate these challenges. This technology enables stakeholders to track shipments, anticipate delays, and adjust logistics plans on the fly, helping to maintain the resilience and efficiency of their supply chains.

As the container shipping industry faces a future of continued unpredictability, investing in these capabilities will be key to staying competitive. By leveraging real-time data and visibility, firms can better manage risks, optimise operations, and ensure that their supply chains remain robust in the face of ongoing global disruptions. In a market defined by change, adaptability and insight will be the defining factors of success.

As concerns over an intensifying trade war between China and the U.S. mount under the Trump presidency, retailers and manufacturers are scrambling to bring orders forward, further complicating global supply chain dynamics. Vincent Clerc, the chief executive of AP Møller-Maersk, the world’s second-largest container shipping company, recently shed light on these escalating challenges in an interview with the Financial Times.

Clerc revealed that some customers are placing their Christmas orders earlier than usual, driven by fears of potential trade disruptions. “There’s clearly, not only for the US but in general, customers bringing orders forward — because of disruption, because of the potential for a trade war, people would rather have Christmas goods already in the warehouse. It’s hard to say how much is going on though,” he stated.

Navigating Supply Chain Disruptions Post-COVID and Amidst Red Sea Tensions

Global supply chains, which had only just begun to stabilize after the severe disruptions caused by the COVID-19 pandemic, faced new challenges at the end of last year. Houthi attacks in the region led to most vessels avoiding the Red Sea, opting instead to navigate around the Horn of Africa. This unexpected shift further strained logistics networks, impacting delivery schedules and inventory management worldwide.

Despite these challenges, Maersk recently raised its financial guidance for 2024 for the third time since May. The company has benefited from the ongoing disruptions, which have persisted longer than anticipated, alongside higher-than-expected global trade growth. “Each month, it looks like it is getting more and more entrenched,” Clerc said regarding the Red Sea disruption, though he refrained from speculating whether these issues would extend into 2025.

Early Ordering Trends and the Need for Enhanced Supply Chain Visibility

Clerc had previously cautioned customers in June against bringing forward their Christmas orders due to the ongoing disruptions. However, recent warnings from former President Trump about potential high tariffs on Chinese goods have led importers in the U.S. and elsewhere to accelerate their orders, a trend that Clerc confirmed.

The significance of these early ordering trends cannot be understated, particularly as Maersk transports about a fifth of all seaborne freight, making it a bellwether of global trade. Notably, Maersk reported that Chinese exports grew nearly 10 percent year-on-year in Q2, underscoring the resilience and adaptability of global trade despite mounting uncertainties.

Amidst these challenges, the need for advanced supply chain and climate impact visibility software has become more apparent. By providing real-time data insights, such technology can empower Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) to make informed, business-critical decisions. These insights are crucial for counteracting potential disruptions and ensuring that supply chains remain resilient in the face of unpredictable global events.

Financial Resilience and Strategic Growth in Uncertain Times

Despite concerns in the stock markets about a possible U.S. recession, Clerc reassured that Maersk does not “see any sign that the US is moving into recessionary territory.” While inventories have risen since the beginning of the year, they remain manageable, with demand holding steady. However, Clerc acknowledged that “one of the big uncertainties is how long demand is going to be as resilient as it is today.”

Maersk’s financial outlook reflects this resilience. The company now expects an underlying operating profit for the full year to be between $3 billion and $5 billion, a significant improvement from its initial forecast of a potential $5 billion loss. This shift is evident in Maersk’s operating profit of $1.1 billion in the first half of 2024, although down from $3.9 billion in the same period in 2023.

In pursuit of long-term growth, Maersk continues to explore acquisitions in its land-based logistics business. This strategic expansion aims to offer a counterweight to its traditional container shipping operations, providing a more diversified service offering in an increasingly complex global trade environment. “We stay open for the right match,” Clerc noted, signalling Maersk’s commitment to strengthening its position as a leader in global logistics.

In a world where supply chain disruptions and geopolitical tensions are becoming the norm, the adoption of real-time visibility software is no longer a luxury but a necessity. By leveraging these tools, BCOs and LSPs can navigate the complexities of modern trade, ensuring that their supply chains remain robust, responsive, and resilient amidst the challenges of today and tomorrow.

Maersk, the world’s second-largest container shipper, has delivered a surprising update to investors, reporting stronger-than-expected performance in the second quarter of 2024. After starting the year with caution, Maersk has revised its operating profit forecast to between $3 and $5 billion for 2024, having already earned $1.1 billion in the first half. Despite ongoing uncertainties, including geopolitical tensions and disruptions in the Red Sea, the company’s outlook has brightened, driven by robust market demand and strategic foresight.

Adapting to a Resilient and Dynamic Market

CEO Vincent Clerc has been vocal about the company’s recent performance, highlighting the container market’s unexpected resilience. Reflecting on the transition from pandemic-induced challenges to the sharp decline in rates and volume in 2023, Clerc noted that Maersk has been buoyed by strong market demand across all segments, despite ongoing disruptions in the Red Sea. This resilience has allowed Maersk to stabilise and even grow its volume, supported by a market that has begun to absorb these global disruptions.

The company’s profitability in ocean shipping has seen a positive trajectory, driven by higher freight rates that have enabled a 5.6 percent margin, despite rising operating costs. The additional distances necessitated by rerouting ships around Africa have significantly increased fuel consumption, pushing costs to new heights. Maersk also observed that shippers have accelerated their operations, likely in anticipation of further disruptions, port congestion, and potential trade tensions between the U.S. and China, exacerbated by the upcoming U.S. presidential election.

Strategic Renewal and Sustainable Growth

As Maersk moves into the third quarter, Clerc emphasised that the company is set to benefit further from the full impact of higher rates, particularly given Maersk’s substantial contract business. Clerc pointed to strong growth in Chinese exports and expressed confidence that a U.S. recession is not imminent. He adjusted the global container market growth forecast to between 4 and 6 percent, up from an earlier estimate of 2.5 to 4.5 percent.

However, uncertainty remains regarding the potential rush to move Christmas merchandise and the status of year-end inventory levels. Clerc suggested that freight rates may have peaked as congestion eases and new capacity enters the market.

In contrast to many of its competitors, Maersk has been conservative in placing new orders, with industry analysts noting that other top carriers now have larger order books. Yet, Maersk is poised to accelerate its fleet renewal programme, increasing its capital forecast by $1 billion annually to between $10 and $11 billion. The company plans to order 50 to 60 new containerships, focusing on fleet renewal rather than expansion, maintaining its existing fleet size of 4.1 to 4.3 million TEU.

Maersk’s strategy for new orders is firmly rooted in sustainability, with a goal to equip 25 percent of its fleet with dual-fuel engines. The company has been clear that new vessels will be ordered only if they offer green fuel options, underscoring Maersk’s commitment to reducing its environmental footprint. Clerc acknowledged that the future of maritime fuel is likely to involve multiple technologies, with Maersk actively securing offtake agreements for liquefied bio-methane (bio-LNG).

The Essential Role of Supply Chain and Environmental Visibility Software

In this evolving landscape, the need for supply chain and environmental impact visibility software is becoming increasingly critical. As shipping lines, such as Maersk, navigate the complexities of global shipping, real-time data insights are essential for Beneficial Cargo Owners (BCOs), Logistics Service Providers (LSPs) and future innovation within the industry to derive greater value. These insights allow them to make informed, business-critical decisions that can mitigate disruptions and optimise their supply chains.

The integration of such visibility solutions will not only help track and manage environmental impacts in real-time but also enable more agile and responsive operations. As the companies push forward with their sustainability goals, this technology will be indispensable in ensuring that the industry can adapt quickly to changes in the market and maintain a competitive edge.

Containership fires continue to pose a serious threat to the global shipping industry, with the latest incident occurring this week at Sri Lanka’s port of Colombo. In the early hours of Sunday, a fire broke out aboard the MSC Capetown III while it was docked at the Jaya Container Terminal (JCT), as reported by the Sri Lanka Ports Authority (SLPA).

The fire, believed to have originated in the under-deck cargo space, quickly escalated into an explosion. The SLPA praised the rapid response of firefighters for preventing what could have been a catastrophic event. “Our firefighters, led by the harbour master, in collaboration with other port services, acted swiftly to extinguish the fire and safely remove affected cargo,” said Operations Director HJ Kumara.

Media reports indicate that the vessel’s manifest data showed only one dangerous cargo container, which had already been offloaded along with 60 other boxes before any fire or smoke was detected. The Madeira-flagged vessel, operating on MSC’s South-east Asia-East Africa service, had arrived from Singapore and was scheduled to perform 995 container discharges and 880 container lifts. Colombo, a key intermediate hub in Asia, handles the majority of the Indian Subcontinent’s containerized transshipment trade.

While no injuries were reported, the SLPA has launched an investigation to determine the cause of the fire and assess the status of the cargo remaining on board. This incident follows two other major ship fires in recent weeks: one on the Maersk Frankfurt, off the Indian coast, and another involving an explosion and fire on the YM Mobility at Ningbo Port in China.

These recent incidents highlight the ongoing challenges and risks associated with containership fires, emphasizing the need for continued vigilance and swift action in the face of such emergencies.

The shipping industry is facing an alarming surge in cyber-attacks, with IT infrastructure and ransom schemes increasingly targeted by malicious actors. According to research from the Netherlands’ Stenden University of Applied Sciences, the industry endured at least 64 cyber-attacks last year—a sharp rise compared to previous years, as reported by the Financial Times.

This dramatic increase in cyber threats marks a significant shift from a decade ago. In 2013, the maritime sector suffered just three cyber-attacks, and none were recorded in 2003. The current data, derived from comprehensive reviews of company records, media coverage, and academic studies, underscores the growing vulnerability of the industry.

State-backed hackers from a small group of countries are responsible for the bulk of these attacks. Russia leads the charge, followed by China, North Korea, and Iran, together accounting for roughly 80% of the cyber-attacks that can be traced to known assailants. The rise in these attacks coincides with escalating geopolitical tensions, particularly in the wake of Russia’s invasion of Ukraine. This has prompted the International Chamber of Shipping (ICS) to issue warnings about targeted strikes on the rules-based global order, which has been vital to the shipping industry since World War II.

“The international rules-based order…the great system [that benefited shipping] since the Second World War is under threat like never before,” warns Guy Platten, secretary-general of the ICS, which represents shipowners controlling around 80% of the global commercial fleet.

One of the most destructive attacks was attributed to Russian agents in 2017, targeting Maersk. This assault took the company’s IT systems offline as part of a coordinated attack on several global corporations, demonstrating the far-reaching impact of cyber warfare on the maritime industry.

The Vulnerability Exposed by the CrowdStrike Outage

The recent outage at CrowdStrike, a leading cybersecurity firm, has further highlighted the vulnerabilities within the shipping industry and beyond. CrowdStrike’s temporary disruption revealed the heavy reliance that many organisations, including those within the maritime sector, have on cybersecurity services. The incident underscored the potential risks associated with centralised security infrastructures, where a single point of failure can expose entire networks to increased cyber threats.

For the shipping industry, this outage served as a stark reminder of the importance of having robust, multi-layered security strategies in place. The incident also illustrated the critical need for real-time visibility across the supply chain, allowing companies to detect and respond to cyber threats swiftly, even when key cybersecurity tools are compromised.

The Urgent Need for Real-Time Supply Chain Visibility

As cyber threats escalate, it is crucial for businesses within the shipping industry to adopt robust supply chain and climate impact visibility software. These tools provide real-time data insights, enabling Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) to make informed, business-critical decisions that can mitigate the effects of cyber-attacks and other disruptions on their supply chains.

Real-time visibility not only helps companies quickly identify and respond to cyber threats but also empowers them to navigate the broader challenges posed by geopolitical instability. By integrating advanced visibility solutions, BCOs and LSPs can enhance their operational resilience, ensuring that they can continue to deliver goods efficiently and sustainably, even in the face of rising cyber threats.

The need for such technology has never been more pressing. As the shipping industry contends with both growing cyber risks and the impacts of climate change, real-time data insights will be essential for maintaining the stability and security of global supply chains. This proactive approach will not only protect individual companies but also reinforce the integrity of the international trade system that has supported the industry for decades.

In a dramatic turn of events, a ship carrying hazardous cargo exploded at the Port of Ningbo-Zhoushan in Zhejiang province, China, around 1:50 PM local time. The explosion, which sent a massive fireball skyward and scattered debris across the port, underscores the urgent need for improved safety measures in maritime logistics.

Video footage from the state-run China News Network (CCTV) captured the fireball erupting and debris being flung high into the air. The shockwave from the blast was so intense that it caused the roof of a nearby company canteen to collapse and rattled bottles in surrounding stores. Thick black smoke was later observed rising from the cargo hold of the vessel.

The ship involved, the Dong Ming, is operated by Taiwanese container shipping company Yang Ming and was docked at the Beilun Port area. According to maritime search and rescue officials, the vessel was carrying organic peroxide, a highly reactive chemical classified under hazard class 5.2. This classification indicates that the cargo must be kept refrigerated to prevent combustion and the release of harmful fumes.

Reports suggest that the cargo’s water-cooling system was not operational, potentially due to Ningbo’s recent hot weather, which exacerbated the risk. The ship was en route from Shanghai to the Middle East when the incident occurred. Fire tugboats and response teams are on-site, and port officials are investigating the cause of the explosion. Thankfully, no injuries have been reported, but nearby residents are being evacuated as a precaution.

This incident at one of the world’s largest ports, which handles hundreds of millions of tankers, bulk carriers, and containerships annually, highlights the critical need for stringent safety measures and protocols in handling hazardous materials. The Port of Ningbo-Zhoushan’s explosive event serves as a stark reminder of the potential hazards in global logistics and the importance of ensuring robust safety systems and preparedness for such emergencies.

There’s been a lot of talk about “friendshoring” since Treasury Secretary Janet Yellen first used the term in 2022. This concept, which emphasises strengthening trade ties with allied countries to enhance supply chain resilience, marks a key distinction between the Biden administration’s approach and that of its predecessor. However, turning this idea into actionable strategy has proven challenging, partly due to a lack of detailed insights into the US’s own industrial capacity and that of its allies. 

Building Resilience Through Collaboration 

Recognising the necessity for deeper insights, the Commerce Department launched a Supply Chain Center last year to work with private sector partners on comprehensive supply chain mapping. This centre has now started trialling a supply chain exposure tool that analyses trade and customs data from the US and its allies, painting a detailed picture of supply chain risks and opportunities. 

The objective is to evaluate the robustness of supply chains in critical sectors like semiconductors, critical minerals, and consumer electronics. This tool helps determine how quickly critical inputs can be replaced from allied countries in the event of disruptions such as war, pandemics, or natural disasters. Additionally, it assesses dependencies on single nations like China or Russia. 

“We wanted to create a common operating picture and shared set of facts for supply chain discussions with allies in Europe or nations that are part of the Indo-Pacific Economic Framework,” says Grant Harris, Assistant Secretary of Commerce for Industry and Analysis. “Our baseline for those discussions too often had been, ‘we should all do more,’ and then things would stall because we didn’t have the data for a more detailed conversation.” 

Strategic Supply Chain Insights 

This effort represents the most granular attempt by the US government to map global chokepoints across various commercial sectors. According to several supply chain experts, no other nation — apart from China — is undertaking such extensive cross-border mapping. 

The Biden administration’s 100-day report on supply chains identified general vulnerabilities in areas like chips, critical minerals, and pharmaceuticals. Subsequent legislation, notably the Chips and Science Act, has aimed to address these vulnerabilities. However, this new tool offers more specific insights into vulnerabilities several layers deep in the supply chain. 

For example, while Indo-Pacific Economic Framework (IPEF) nations might collectively appear to have a secure 33 percent market share of a crucial electronics component, this tool reveals that the majority of this supply comes from a single country that imports most of its inputs from China. 

Despite limitations in real-time data and the complexity of creating a comprehensive map, the tool is a significant advancement in understanding global supply chain dynamics. Harvard Business School professor Willy Shih points out that supply chain visibility can uncover surprising dependencies, such as the concentration of roofing nail suppliers in Beijing. While these are less concerning than dependencies on electrical steel or broadband infrastructure, they underscore the importance of detailed supply chain mapping. 

The Role of Real-Time Data and Insights 

To ensure the success of such initiatives, implementing supply chain and climate impact visibility software is crucial. This technology provides real-time data insights, essential for Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) to make informed, business-critical decisions. For instance, real-time tracking of Scope 3 emissions from shipments allows companies to monitor emissions as they occur, enabling a more agile and responsive approach to sustainability goals. 

Real-time visibility not only helps achieve environmental targets but also allows stakeholders to navigate supply chain impacts more effectively. This ensures smoother operations and greater adaptability in a dynamic market environment. 

Advancing Friendshoring and Supply Chain Resilience 

The new supply chain exposure tool aims to identify major risk hubs, facilitating more strategic and effective conversations with trade partners. For example, can global demand for antimony ore, essential for battery alloys, be met by Australian supply? Can more laptop components be sourced from the Netherlands? 

Supply chain experts like Shih and Christopher Gopal, a member of the DoD’s Defense Business Board, see value in risk mapping. However, they emphasise that real demand signals are necessary to create economically sustainable shifts in global supply chains. Knowing where supply lies is one thing; making it economically viable to produce goods in rich countries is another. 

This is where friendshoring comes into play. Envisioning partnerships around electric vehicles or clean tech that involve sourcing critical minerals in Australia, leveraging Japanese production capacity, and utilising the power of the US consumer market can create competitive, sustainable products. 

As more is known about global production, a less nationalistic and more cooperative conversation about creating global supply chain resiliency may emerge. This goal has bipartisan appeal in the US, where the Promoting Resilient Supply Chains Act, which aims to codify risk mapping, passed the House unanimously. Eliminating chokepoints is a universally agreed objective. 

In conclusion, the new supply chain exposure tool and the emphasis on friendshoring are pivotal steps toward a more resilient, efficient, and sustainable global supply chain. These advancements, combined with real-time data insights, empower BCOs and LSPs to make informed decisions, ultimately enhancing the robustness of global trade networks.