Jaguar Freight | Weekly Roar: Net Zero Emissions by 2050, the Container Market, West Coast Ports Doing Better, and a Supply Chain Warning System

In this week’s Roar: net zero emissions by 2050, the container market, diesel prices trending up, West Coast ports doing better, and a supply chain warning system.

The shipping industry has a goal to reach net zero emissions by 2050, but there are questions as to whether this is achievable. A lot of things need to change or be improved, including new technologies in ship design, like smaller engines and improved hull shape — or perhaps lower-cost solutions like wind power, waste heat recovery, and more. Low- and zero-carbon fuels are also a consideration. While the shipping industry is committed to achieving this goal, the transition will be challenging.

The long-term forecast for ocean carriers is gloomy, with Drewry’s predicting an industry-wide loss of $15 billion for 2024. Freight rates are expected to remain low through 2024. This is largely due to a disconnect between supply and demand — with supply growing by 6.4% in 2024, while demand is expected to only grow by 2%. It’ll remain a shippers’ market as carriers will face “a relentless challenge to keep rates above cost” into 2025.

Diesel prices are trending upwards once again in the U.S. For the second time in the past five weeks, the price has increased, with the latest increase of 10.1 cents putting the average price at $4.545 per gallon. This is the highest increase since a 13.9 cent increase in August.

The Port of Los Angeles’ cargo volumes grew for the second straight month in September 2023. The port handled 5.4% more compared to the same month in 2022 — which is good news for the U.S. economy and an indicator that more cargo is shifting back to West Coast ports. Loaded imports increased by 14% year-over-year, while loaded exports increased by 55%. However, empty containers decreased by 18.5% year-over-year, dragging year-to-date cargo volumes down 18.6% compared to the same period last year.

The U.S., Japan, and South Korea are piloting a supply chain warning system, hoping to encourage collaboration and innovation. They highlighted critical minerals — starting with gallium and geranium — and the need for materials that support their growing focus on electric vehicles. The warning system would be in place so that each country could exchange information about disruptions to production and logistics networks. Ultimately, however, the success of the system will depend on the mutual trust between the countries involved.

Compliments of Jaguar Freight – a member of the EACCNY.