Weekly Supply Chain Update: 16

Maersk and Hapag-Lloyd Finalise Gemini Cooperation Networks Ahead of February 2025 Launch

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With around five months to go before launch, Maersk and Hapag-Lloyd have provided an update on their Gemini Cooperation, finalizing service maps and outlining how the network has evolved since its announcement in January 2024. The update also includes an alternative Cape of Good Hope network in response to the ongoing Red Sea crisis.

Key Details of the Two Networks:

Trans-Suez Network

• Approx. 300 vessels
• 3.4 million TEU capacity
• 57 services (27 mainliners, 30 shuttles)

Cape of Good Hope Network

• Approx. 340 vessels
• 3.7 million TEU capacity
• 59 services (29 mainliners, 30 shuttles)

Depending on which network is implemented, the cooperation will feature either 27 or 29 mainliner ocean services, supported by 30 regional shuttle services. The collaboration will involve between 300 and 340 vessels in total. The companies jointly stated, "Our ambition is to deliver a flexible and interconnected ocean network with industry-leading schedule reliability above 90% once fully phased in”. Since announcing their long-term partnership in January, Maersk and Hapag-Lloyd have been working on finalising the operational details of their joint ocean freight network for East-West trade lanes. Rolf Habben Jansen, CEO of Hapag-Lloyd, commented, "Reliability, connectivity, and sustainability are the key themes of the networks we’re presenting today. We are pleased to offer full transparency, so our customers can begin planning, even in a dynamic situation”. In October 2024, the Gemini Cooperation will confirm which network it plans to activate for its February 2025 launch.

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DSV to Acquire DB Schenker for €14.8 Billion, Aiming to Create Global Logistics Leader

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DSV has agreed to acquire DB Schenker, Deutsche Bahn's rail logistics arm, for €14.8 billion (US$16.4 billion). The deal is expected to close in 2025, following regulatory approval. DSV plans to invest €1 billion (US$1.1 billion) in Germany over the next 3-5 years, aiming to create a global logistics leader by combining the strengths of both companies. Job protection commitments will remain in place until 2027. The sale proceeds will stay within DB, helping reduce debt and boosting financial stability. DB’s CEO called it the largest transaction in the company’s history.

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WCI Spot Rates Plunge as Early End to Peak Season Hits Asia-Europe and Pacific Trades

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This week’s WCI spot rates from Drewry show a sharp decline. Asia-North Europe rates dropped by over $1,000 per FFE, with a total decline of more than $3,000 per FFE since the July peak. This drop aligns with the typical seasonal decline from the summer peak to the post-Golden Week bottom. Asia-Mediterranean rates have also fallen by nearly $2,500 per FFE since the peak, with another $700 per FFE drop expected to reach the seasonal low. On the Pacific routes, rates have dropped below seasonal expectations. Asia-US East Coast rates plunged by nearly $1,800 per FFE compared to last week, with a total decline of almost $3,000 per FFE since the peak. Asia-US West Coast rates fell by $400 per FFE this week, down $1,800 per FFE from the peak. These drops exceed the normal seasonal decline after peak season. Overall, there is noticeable weakness in East-West trades, as carriers face an early end to peak season. However, Asia-North Europe rates remain $2,000 per FFE higher than they were in early May, before the peak season. Similarly, Asia-Med rates are still up by $1,600 per FFE, and Pacific trades are up by $2,200 per FFE.

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Missile Strike Hits Merchant Ship in Black Sea, Raising Global Food Security Concerns

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A Russian missile strike hit the Greek-operated bulk carrier Aya off Romania, marking the first confirmed attack on a merchant ship in the Black Sea this year. The ship, flagged by Saint Kitts and Nevis, was carrying grain from Ukraine to Egypt when it was struck by a Russian Kh-22 missile. The attack damaged the vessel's port side, forcing it to divert to Romanian waters and anchor off Constanta. Ukrainian President Zelenskyy condemned the strike as an attack on global food security, while the US and the UN also criticised Russia. It remains unclear if the ship was a direct target or hit mistakenly as part of wider Russian strikes on Ukrainian infrastructure in the region.

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Latin America's Evolving Maritime Industry: Panama Leads, Brazil and Mexico Show Strong Growth Potential

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Latin America's maritime shipping industry is evolving, with several countries competing to become key port hubs. Panama leads in shipping connectivity, leveraging the Panama Canal, despite facing setbacks between 2018 and 2021. Brazil is steadily improving its connectivity and has overtaken Colombia, which has been in decline since 2022. Mexico saw a drop in connectivity but is showing promise through port infrastructure growth. Chile is also gaining momentum, surpassing Colombia and aiming to enhance its shipping and port connectivity. The Port Connectivity Index highlights increasing competition driven by investments in port infrastructure. Mexico, Brazil, and Chile are making strides, while Uruguay and Colombia struggle with declines. Surprisingly, Panama, despite its shipping strength, has low port connectivity, a gap that could hinder its long-term success without further investment. Overall, continued infrastructure investments are critical for maintaining and boosting regional competitiveness, with Brazil, Chile, and Mexico showing strong potential for growth.