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For shippers, by a shipping container (and a human named Michael).
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📈 BY THE NUMBERS: Important numbers impacting freight and logistics
⛽ Diesel: $4.537 / gal
Compared to a year ago, the average per-gallon price of diesel is up by $0.922. Data via the U.S. Energy Information Administration – Week of Dec. 26. Diesel prices continue to slide.
✈️ Air Cargo Index: 192.4 🔽 (November, FRED)
December index data won’t be released until Jan. 2023.
🚢 Global Container Index: $2,126 (Dec. 23)
🌐TOP STORY: White House supply chain envoy confident entering 2023
White House supply chain envoy Stephen Lyons predicts normalizing trade conditions in 2023. Appearing on Transport Topics’ “Newsmakers” web program, Lyons compared today to the situation a year ago:
“We had 109 ships queued up outside of San Pedro Bay…The truth is that record volumes of cargo moved through the supply chain, but it was ugly and it was chaotic…I am an optimist by nature, cautiously optimistic, always. I think the consumer demand will stay. I think imports will stay and continue to grow.”
“I think the supply chain will continue to normalize itself and build back a level of reliability… So I see a positive 2023 coming about,” he continued.
The Biden White House is breathing a sigh of relief by averting a potentially devastating national railroad workers’ strike. As we’ve reported, the rail union strike would have ground Class I rail operators to a halt, and delivered a huge blow to the economy.
Full interview at Transport Topics.
🧪 Will hydrogen decarbonize shipping?
Developing alternatives to the heavy fuel oil used in shipping is crucial to meet the decarbonization goals set by the International Maritime Organization. 90% of global trade occurs by sea, and the maritime shipping industry produces 3% of worldwide emissions, which is set to increase to 10% by 2050 if there are no changes in its current carbon trajectory. Hydrogen is one possibility, yet many hurdles remain, as outlined in this interview with the CEO of UK hydrogen startup Bramble Energy. Chief among them: the large energy input required to produce hydrogen, the cold storage facilities needed to store it on ships and land, and high pressure pipeline infrastructure to deliver it.
More at Hydrogen Fuel News.
💲Aljazeera’s five economic trends to watch for in 2023
Aljazeera has released its top economic trends for 2023. Let’s save you a click:
- Inflation: The IMF predicts a 6.5% rate of global inflation for next year, down from 8.8% in 2022, and still far above the Fed’s 2% target for the U.S.
- Recession: Rising interest rates, inflation, and slowing growth, will bring the global growth rate down to 2.2% from 3.2%, as forecast by the OECD, leading many forecasters to call a global recession in 2023 “inevitable.”
- China Reopening: We will wave goodbye to “zero COVID” in the new year but analysts are split on how it will play out. Will pent-up Chinese demand save global growth? Will the economy overheat and make inflation and energy prices worse? Will a new variant emerge?
- Bankruptcies: Interest rate hikes, the removal of stimulus and slowing growth will almost double the world bankruptcy rate from 10% to 19%, predicts Allianz Trade.
- Deglobalization: The Ukraine war, US-China semiconductor competition, will spell further tariffs, economic competition, and further hurt free global trade.
More at Al Jazeera here.
🦥 Slowing growth
2023 is going to be the year of slow growth for the global economy, says professor and economist Daniel Lacalle of Tressis Gestion. From Russia’s illegal invasion of Ukraine to China’s repressive pandemic measures, there are many elements that sent inflation soaring. And Lacalle’s growth forecast is even gloomier than the OECD, who are forecasting 2.2.% global growth for 2023:
“I think that we are probably going to move into a decade of very, very poor growth in which developed economies are going to find themselves lucky with 1% growth per annum, if they are able to achieve it, and what is more unfortunate than everything else is with elevated levels of inflation,” Mr. Lacalle told CNBC.
⚠️Other stories to read…
- El Pais (English): What’s in store for the global economy in 2023?
- Posen (Market Watch): “The inflation outlook will look a lot different in 12 months”
- Dallas Morning News: Will inflation ease its painful grip on consumer prices in 2023?
- Reuters: Ship insurers to cancel war cover for Russia, Ukraine from Jan 1
- FT: European natural gas prices drop back to pre-Ukraine war level
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The current edition of our newsletter was written by Michael M., Freight Forwarding Weekly’s chief news analyst. Do you have a tip or do you want us to cover something? Tell us by replying.