Freight Markets in Flux: Why Excess Inventory Could Be Your Opportunity

Retail inventories are soaring, freight markets are softening, and it’s a perfect storm for supply chains. If you’re not paying attention, the next few months could wreak havoc on your logistics, profitability, and sustainability goals. But with the right tools and insights, this challenge can be turned into an opportunity.

The Numbers Don’t Lie

Retail inventories in the US are breaking records. According to Sea-Intelligence, November 2024 inventory levels were $30.2 billion higher than the norm. Alan Murphy, CEO of Sea-Intelligence, called it “the largest upwards deviation we have seen since the financial crisis.” Inventories peaked in September, exceeding the long-term trend by 3.1%, and while there was a slight dip to 3% by November, the excess remains significant.

What’s causing this? It’s a cocktail of factors. Retailers are hedging against potential tariffs, managing disruptions like the ILA strike, and overcorrecting after pandemic-era shortages. Philip Damas of Drewry pinpointed three culprits: Chinese New Year, pre-strike cargo rushes, and sky-high inventory levels compared to last year.

And the costs are piling up. Target’s 2022 initiative to “right-size” inventory is still falling short. Jefferies noted that early inventory build-ups, aimed at mitigating East Coast port disruptions, shaved nearly one percentage point off its holiday profit margins. Meanwhile, Alix Partners warned that average “days on hand” for US retailers have risen by 12% since 2021.

A Vicious Cycle or a Strategic Opening?

Excess inventory doesn’t just dent profits; it ties up capital, increases holding costs, and inflates the carbon footprint of supply chains. Alix Partners cautioned that many companies underestimate these holding costs because decision-making is siloed between inventory planners and financial managers.

But let’s flip the script: this isn’t just a crisis—it’s a wake-up call for smarter supply chains. Imagine having real-time data insights that enable Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) to anticipate disruptions, optimise routes, and fine-tune inventory decisions.

The Case for Visibility Software

Visibility software is no longer optional; it’s mission-critical. With tools that integrate real-time supply chain and climate impact data, businesses can assess the full cost of inventory decisions. This empowers leaders to counteract challenges like tariff impacts, inventory build-ups, and market softness, making business-critical decisions with confidence.

This isn’t just about saving money. It’s about future-proofing. Smarter supply chains mean fewer carbon emissions, better margins, and happier customers. The alternative? More missed earnings reports, like Target’s, and a higher environmental toll.

The message is clear: the time to act is now. Visibility, agility, and sustainability aren’t just buzzwords; they’re the foundations of a thriving supply chain in 2024 and beyond.

The Suez Conundrum – Navigating the Future of Shipping Amid Overcapacity and Uncertainty

The maritime industry is bracing for a seismic shift as carriers weigh the decision to revert to the Suez Canal after months of Cape of Good Hope diversions. This seemingly simple change has profound implications, not just for freight rates but for the entire global supply chain.

Why? Because when the Suez becomes the norm again, the reduction in voyage tonne-miles will expose the glaring overcapacity in the market, driving freight rates down—particularly on the Asia-Europe trades. According to Drewry, rerouting via the Cape reduced effective capacity by approximately 9%, a key factor in carriers posting robust quarterly profits over the past year. But now, the industry stands on the brink of a sharp correction.

Redefining the Market: Overcapacity and Pricing Challenges

The Global Shipper’s Forum (GSF) and MDS Transmodal estimate that if Red Sea transits resume, 70 ships with around 500,000 TEU capacity will become surplus. This surplus creates a new headache for shippers and carriers alike, as freight rates plummet and market volatility takes centre stage.

Matthew Gore, partner at HFW, underscores the dilemma shippers face in navigating contract negotiations. A “wait-and-see” approach sounds safe but leaves businesses vulnerable. Spot rates, predicted to trend downward but remain volatile, provide little reassurance. Gore’s advice? Consider index-linked contracts or innovative agreements like “twin-rate contracts”—a Cape rate for the longer route and a reduced Red Sea rate once services resume.

James Hookham of GSF calls twin-rate contracts a bold but necessary innovation, reflecting resilience planning seen in other sectors. Yet even he acknowledges the challenge of securing commitments in an environment as turbulent as 2025’s freight market is predicted to be.

The Critical Role of Real-Time Supply Chain Visibility

Here’s the truth: regardless of Cape or Suez, shippers and Logistics Service Providers (LSPs) need more than rate flexibility to thrive—they need visibility. Implementing supply chain and climate-impact visibility software isn’t just a nice-to-have; it’s a survival tool.

Such software provides real-time data insights, enabling Beneficial Cargo Owners (BCOs) and LSPs to make business-critical decisions amid unpredictable shifts in routes, rates, and capacity. It allows businesses to map out the full scope of their supply chains, anticipate bottlenecks, and adapt to sudden disruptions. Whether it’s gauging the impact of returning to Suez or managing overcapacity, having a clear view of the numbers is no longer optional—it’s mission-critical.

As Hookham aptly puts it, “resilience planning” isn’t just for major crises; it’s for anticipating and navigating the small, compounding challenges that define modern shipping. If transparency and data-driven decisions can protect supply chains from the ripple effects of Suez shifts, the industry has no excuse to hold back.

Final Thoughts: Innovate or Be Left Behind

The future of shipping contracts, from twin-rate deals to index-linked agreements, will be defined by innovation and transparency. But to make these strategies work, the foundation must be a visible, measurable, and data-driven supply chain. Companies that embrace real-time insights will lead; those that cling to traditional models will struggle to keep up.

As 2025 looms, the industry’s leaders won’t just be those offering lower rates. They’ll be the ones offering certainty in an uncertain world.

Embracing Volatility – How Data Is Revolutionising Freight Procurement

Market volatility has flipped the logistics script. Shippers have been forced to rethink how they procure ocean and air freight, moving towards greater flexibility, resilience, and—most importantly—data-driven decision-making. This isn’t just a tweak to existing strategies; it’s a full-blown reimagining of freight procurement in an era of disruption.

Let’s face it: we’re navigating uncharted waters. Rate fluctuations, capacity squeezes, and ever-shifting demand patterns mean business-as-usual is no longer an option. Real-time freight intelligence is the superpower shippers—and their Logistics Service Providers (LSPs)—need to thrive, not just survive. It’s not just about rates and spreadsheets; it’s about building resilient supply chains that can weather any storm while maximising ROI.

1. Negotiating with Precision: Smarter, Data-Driven Decisions

ROI Impact: Competitive rates. No overpayments.

Real-time freight intelligence keeps you informed about rate trends, capacity, and carrier pricing tactics. Armed with data, shippers can challenge inflated premiums and negotiate from a position of strength. The result? Big savings and smarter partnerships, with cost reductions of up to 30% reported in certain cases, equating to millions saved annually on key shipping lanes.

2. Forecasting: Protecting Your Budget (and Your Sanity)

ROI Impact: 50% better budget accuracy, as reported by a Fortune 500 company.

Cost forecasting isn’t glamorous, but it’s critical. Freight data gives you visibility into surcharges, spot rates, long-term agreements, and market trends, helping you plan with laser-sharp accuracy. This isn’t just saving pennies—it’s about sidestepping financial landmines that blow up your P&L.

3. Benchmarking: The Confidence to Demand Better

ROI Impact: Better service. Better terms.

Comparing your performance and costs against market benchmarks ensures you’re not leaving money on the table or settling for subpar service. Tools that aggregate hundreds of millions of rates empower shippers and LSPs to push for better service guarantees, lower surcharges, or contractual improvements. With this collective intelligence, negotiation is no longer a guessing game; it’s a precise, data-driven process.

4. Reacting in Real Time: Stay Agile in Chaos

ROI Impact: Losses minimised, decisions aligned.

In logistics, chaos is inevitable. But reacting to it doesn’t have to be. When capacity dries up or rates spike, real-time intelligence lets you pivot on a dime—securing alternative carriers or adjusting strategies while keeping costs in check.

This level of visibility aligns teams across finance, operations, and procurement, ensuring everyone is on the same page when the heat’s on. Quick decisions, fewer silos, smoother operations.

5. Better Relationships: Collaboration That Works

ROI Impact: Long-term savings, future-proof supply chains.

Freight procurement is still a relationship game, but volatility strains even the strongest ties. Real-time data can shift the dynamic by providing transparency, neutrality, and shared insights. This fosters trust, enabling innovative collaborations like capacity-sharing agreements, dynamic pricing, or joint sustainability initiatives.

Instead of fighting over margins, shippers and LSPs can work together to tackle the big stuff—like reducing emissions or designing supply chains that can withstand future shocks.

Why Real-Time Freight Intelligence Is Non-Negotiable

For most shippers, data has historically been a pre-tender tool. But in today’s climate, relying on static benchmarks is like navigating a storm with last week’s weather report. From 2019 to 2024, we’ve seen how rapidly markets can shift. Waiting until the next contract cycle to adjust is a recipe for disaster.

Data is the compass shippers and LSPs need—not just during tender negotiations, but as a constant tool for building resilient, sustainable supply chains. It’s time to integrate real-time freight intelligence into every aspect of your strategy. With dynamic insights, you can outmanoeuvre uncertainty, build flexibility, and create lasting value for your business.

E-commerce Drives Two-Thirds of Airfreight from China as Rates Surge Amid Capacity Crunch

Ecommerce is reshaping the air cargo landscape, now accounting for an estimated two-thirds of airfreight originating from China. As demand soars, freighter operators are leveraging the momentum to increase contract rates for 2024, making this peak season pivotal for the logistics industry.

A Shanghai-based logistics provider remarked:

“The rates this week to Europe and the US exceed the highest recorded last year. Ecommerce is the key driver, with volumes making up a significant portion of overall cargo.”

Rates on the Rise: A Data-Driven Snapshot

According to WorldACD, global air cargo rates rose by 2% week-on-week, hitting $2.84 per kg as of 1 December—the highest this year. Spot rates saw a 3% increase, driven by a 4% jump from Asia Pacific and a 3% rise from North America. The statistics tell a compelling story:

  • China: $5.10 per kg (+7%)
  • Hong Kong: $6.25 (+9%)
  • Japan: $4.97 (+6%)
  • South Korea: $5.49 (+6%)
  • Taiwan: $4.07 (+5%)
  • Vietnam: $4.88 (+3%)

Year-on-year, rates surged over 30% from Japan and Vietnam, and 46% from Taiwan, underlining the immense growth in demand from these markets.

Ecommerce, Congestion, and a Growing Need for Data Visibility

While ecommerce is driving demand, capacity constraints and airport congestion remain pressing challenges. The seasonal peak is expected to ease temporarily during Christmas but will ramp up again ahead of Chinese New Year on 28 January. The situation is further compounded by a pre-tariff rush ahead of potential US import tariffs in early 2025, prompting businesses to stockpile goods.

Freighter operators are already responding with record-high proposed rates for 2024, with increases of over £1.10 per kgto Europe, compared to the prior year. This trend emphasises the growing complexity of managing supply chains amid volatile market conditions.

As demand continues to outpace supply, the industry faces mounting pressure to adopt advanced supply chain visibility and climate impact software. These tools can provide real-time data insights, empowering BCOs and Logistics Service Providers (LSPs) to make data-driven decisions and counteract supply chain disruptions effectively. Such visibility is no longer optional—it’s critical for navigating the complexities of modern logistics.

Industry Insights: A Maturing Air Cargo Market

Despite these challenges, experts note that the industry is demonstrating newfound maturity. Niall van de Wouw, Chief Airfreight Officer at Xeneta, stated:

“We’re witnessing a more grown-up air cargo market, with better resource allocation and improved terms for all parties involved. The industry is firing on all cylinders, but it’s under control—unlike the chaos of prior peaks.”

This level-headed approach is key to maintaining stability as markets evolve. However, with shifting trade routes driven by the relocation of manufacturing to Southeast Asia, businesses must adapt their strategies to remain competitive.

Looking Ahead

The air cargo market is evolving rapidly, driven by ecommerce demand, trade policy shifts, and capacity challenges. To stay ahead, LSPs and BCOs must adopt real-time supply chain visibility solutions. These tools will empower them to make informed, critical decisions, ensuring they remain resilient in a dynamic global market.

UK Leads Europe with Record 1.29 Billion Parcel Deliveries This Peak Season

A new study commissioned by FedEx has revealed a staggering forecast for the 2024 peak season: UK parcel carriers are expected to distribute 1.29 billion shipments between October and December. This marks a 10.9% increase compared to 2023’s figures, representing the largest projected growth in Europe. With the UK accounting for 21% of Europe’s total deliveries during this period, the nation is leading the pack in logistics demand.

Conducted by Effigy Consulting, the study analysed over 500,000 data points across 300 carriers in 41 countries, painting a detailed picture of the challenges and opportunities ahead. Alun Cornish, Operations Managing Director at FedEx, emphasised the critical nature of peak season for UK businesses: “Online shopping, e-commerce, and a shift towards deferred services are reshaping demand. FedEx’s networks will scale to meet this increase, using predictive technologies to navigate potential disruptions.”

A Peak Like No Other

The UK is forecast to handle nearly 1.3 billion parcels this year during peak season, far outpacing Germany’s projected 1.1 billion deliveries and France’s 524.7 million. Cornish noted that the UK’s return to pre-pandemic levels signals renewed confidence in both British businesses and consumers, underscoring the critical role logistics and transportation play in supporting economic recovery.

But this surge doesn’t come without its challenges. Retailers must contend with three distinct peaks within the peak: Singles’ Day, Black Friday and Cyber Monday, and the lead-up to Christmas. Each period demands specific strategies to address the surge in volume, with some businesses experiencing as much as a 30% increase in trading during this time.

The Role of Technology in Managing the Surge

To meet this rising demand, logistics companies are leveraging cutting-edge technology. FedEx has introduced AI-driven tools like Surround, which uses weather data to reroute packages and avoid delays, and SenseAware, which provides real-time package location updates using RFID technology. These innovations ensure smoother operations and help logistics service providers (LSPs) manage their supply chains with precision.

Visibility software plays an increasingly pivotal role here. By providing real-time data insights, businesses can make informed decisions that mitigate disruptions. For Beneficial Cargo Owners (BCOs) and LSPs, such tools are indispensable for navigating the high-stakes “golden quarter,” where timing is everything.

Sustainability and Visibility: The Future of Logistics

With the surge in parcel volumes comes the urgent need to address environmental impacts. Technologies that enhance supply chain visibility not only improve operational efficiency but also allow businesses to track and reduce carbon footprints. As the logistics sector balances growth with sustainability, real-time data insights become critical in enabling eco-conscious decision-making.

The UK’s leadership in parcel logistics is a testament to its resilience and adaptability. However, to maintain this position, businesses must embrace the dual goals of operational excellence and environmental stewardship. For BCOs and LSPs, this means leveraging visibility software to make data-driven decisions that enhance both performance and sustainability.

Maersk Halifax Sets Sail for Green Shipping – First Large Containership Converted to Methanol Fuel

In a significant milestone for sustainable shipping, Maersk has completed the conversion of its Maersk Halifax to run on dual-fuel methanol, marking it as the first large, in-service vessel to undergo such a transformation. Celebrated in a ceremony in China on 29 October, this achievement signals a new chapter in green shipping as carriers strive to reduce their carbon footprints and meet rising environmental regulations.

The Maersk Halifax, built in 2017 and measuring 1,158 feet (352 metres) with a capacity of 15,226 TEU, is now a striking 1,204 feet (367 metres) long and boasts a nominal capacity of 15,262 TEU. This complex retrofit took place at Zhoushan Yatai Ship Engineering and Repair Co., where the shipyard’s prefabricated approach helped complete the project within 236 days, significantly accelerating the transition. Maersk’s conversion project included a main engine upgrade, installation of dedicated methanol fuel tanks, and integration of a dual-fuel line. Alfa Laval supplied the fuel system, and a specialised zinc coating was applied to protect the new methanol tanks by Chengxi Walxin Special Coatings Co., covering 2,800 square metres.

Klaus Rasmussen, Head of Projects and PVU Sales at MAN PrimeServ, explained the conversion’s feasibility, noting that “retrofitting a MAN B&W engine to dual-fuel running is straightforward as our standard, electronically-controlled ME-C diesel engines are constructed as ‘dual-fuel ready’ and therefore readily retrofittable.”

The Maersk Halifax began sea trials on 16 October and completed them within four days. According to Maersk’s systems, the vessel departed Shanghai on 5 November and is set to make stops in China and South Korea before arriving at APM Terminals Lazaro Cardenas in Mexico. Maersk has confirmed that similar methanol conversions are planned for sister ships, with the next retrofit scheduled for 2027.

A Wave of Methanol Conversions Sweeps the Industry

Maersk’s pioneering effort underscores a broader trend across major shipping lines, as competitors COSCO, CMA CGM, and Seaspan (in partnership with Hapag-Lloyd) are actively planning their own methanol conversions. Recently, work began on a 20,000 TEU COSCO containership at Shanghai COSCO Shipping Heavy Industry, which will also be outfitted to run on methanol using both the MAN S90 main engine and the Wärtsilä W32 auxiliary engine.

This wave of conversions marks a fundamental shift in how the shipping industry approaches fuel efficiency and emissions, setting new standards for sustainability in global logistics. However, as companies increasingly adopt methanol and other alternative fuels, the need for visibility and real-time data becomes essential. Effective supply chain management is no longer just about moving goods—it’s about understanding the environmental impact and enabling Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) to make informed decisions that drive sustainability and efficiency.

The Role of Real-Time Data in Green Shipping

As these advancements accelerate, implementing supply chain and climate-impact visibility software will be critical. Real-time data insights empower BCOs and LSPs to track vessel fuel efficiency, route emissions, and potential disruptions, equipping them to make timely, business-critical decisions. By monitoring environmental impact in real time, stakeholders can optimise their supply chain operations, adapt routes as needed, and achieve greater transparency in their climate commitments. This digital shift is essential for mitigating the environmental impacts of global shipping and ensuring that supply chains are not only efficient but also sustainable.

In embracing methanol and technology-forward solutions, Maersk and other leading shipping companies are forging a path toward a greener future, and robust data-driven tools will be instrumental in helping them reach that goal.

How Air Cargo Can Tackle the Carbon Challenge: The Role of Digitised Community Systems

Reducing CO2 emissions across the logistics industry is a pressing global priority, with governing bodies, regulatory frameworks, and corporate ESG standards increasingly focused on reducing carbon footprints. Yet, a vital question remains: how can air cargo—a rapidly growing sector—minimise its environmental impact? Aviation is the fastest-growing mode of transport, and in 2022 alone, it accounted for 2% of global energy-related CO2 emissions—a significant figure for a single industry.

To address these challenges, infrastructure providers are under increasing pressure to invest in sustainable, digital solutions that enable greater visibility and oversight across supply chains. One of the most promising solutions is the Airport Cargo Community System (ACS), which connects air cargo operators through a unified platform that enables seamless data sharing. This supports greener decision-making, more efficient operations, and reliable CO2 emission reporting.

How Airport Cargo Community Systems Drive Sustainable Logistics

Airport Cargo Community Systems (ACSs) act as the bridge between landside and airside operations, providing a centralised platform where customs agents, logistics service providers (LSPs), and cargo handlers can access and share real-time data. ACSs streamline efficiency across all points of cargo transit, from customs processing to final delivery, allowing stakeholders visibility over the entire process. This connected approach reduces delays, minimises redundant paperwork, and optimises routes—significantly lowering fuel consumption and carbon emissions.

Through ACSs, LSPs and other stakeholders can make swift, data-driven decisions that directly support sustainable supply chain practices. With real-time insights into cargo flow and emissions, operators are better equipped to meet compliance requirements, improve ESG reporting, and achieve carbon reduction goals. ACS technology drives route optimisation, paperless trade processes, and reduces congestion at loading and offloading points, allowing end customers and shippers confidence that their goods are transported in an environmentally responsible way.

Expanding Digital Community Systems Across the Logistics Industry

While ACSs are transforming air cargo, the concept of community systems has applications beyond aviation. In ports, digital systems such as Port Community Systems integrate environmental monitoring, enabling real-time tracking of emissions, fuel use, and equipment efficiency. Community systems are increasingly being explored for “sea-air corridors” that promote multimodal transport, linking sea, road, and rail operations to further reduce carbon emissions across logistics modes. By digitally connecting these sectors, stakeholders can create transparency and sustainability far beyond a single mode of transport, enabling informed, environmentally conscious decisions throughout the logistics network.

The Future of Sustainable Logistics: Real-Time Visibility and Data-Driven Decisions

The future of sustainable logistics hinges on visibility. With platforms like ACS, Beneficial Cargo Owners (BCOs) and LSPs can access critical real-time data insights, empowering them to make business-critical decisions that counteract supply chain disruptions and mitigate environmental impact. By embedding data transparency into everyday operations, ACS and other community systems are shaping a greener, more responsible logistics future.