The Supply Chain Daily provides a curated overview of Panjiva's research and insights covering global trade policy, the logistics sector and industrial supply chains and draws from global shipping and freight data.

Amazon replaces DB Schenker as Maersk, MSC lead liner pack in October

The container shipping industry is in the midst of a continuing surge in traffic as global supply chains recover from COVID-19-related industrial lockdowns. U.S. seaborne imports of containerized freight jumped 16.8% year over year in October to reach a record high. Rapidly rising shipping rates, surcharges and instances of equipment shortages are stressing supply chains.

All the top 10 container lines on U.S.-inbound seaborne routes experienced an expansion in October, led by MSC Mediterranean Shipping Co. SA and A.P. Møller - Mærsk A/S growth of 43.5% and 25.8%, respectively. Ocean Network Express Pte. Ltd. is behind the pace with growth of just 11.3% and the company has cautioned that the continued spread of COVID-19 means "cargo demand and short-term freight market continues to remain uncertain."

There are also disruptions being caused by competitive dynamics. Maersk’s decision to integrate its forwarding and container shipping operations has led Schenker Inc. to withdraw its business from Maersk. Container handling by Maersk for DB Schenker had already fallen by 69.4% year over year in October, replaced largely by a 160.2% jump in handling for Amazon.com Inc.'s freight forwarding operations.

(Panjiva Research - Logistics)

Hapag-Lloyd’s farm service withdrawal follows grains, beans boom

The availability of shipping containers is proving a challenge for agricultural supply chains as container lines, reportedly including Hapag-Lloyd AG, suspend exports from the U.S. to prioritize the backhaul of equipment to China. ​​​​​U.S. seaborne exports of farm goods climbed 8.8% year over year in the first 20 days of October after a 33.4% rise in the third quarter of 2020.

Cereals surged 68.0% higher in October while oilseeds rose 17.2%, in part due to Chinese purchasing as part of the phase 1 trade deal with the U.S. Farm goods exports handled by Hapag-Lloyd rose 28.3% year over year in September, including a 32.6% surge in supplies to Asia. The latter included a 2.7% dip in September, perhaps indicating the start of its service cutbacks.

(Panjiva Research - Logistics)

Vtech takes tariff, pandemic lessons but faces residual Trump risk

V Technology Co. Ltd. reported fiscal first-half revenues that were unchanged versus a year earlier, which the electronics manufacturer stated had "turned out better than expected." U.S. seaborne imports linked to the company, led by its educational toys, fell 23.9% year over year in the third quarter of 2020.

Yet, there has been a recovery recently with a 58.9% surge in October. That is a similar pattern to the recovery being seen across the toy industry. The company has stated that "consumer demand has recovered strongly in some markets" though it remains concerned that a resurgence in the pandemic could hurt consumer sentiment.

Vtech has faced U.S. tariffs on imports from China resulting from the trade war and has opened two factories in Malaysia to compensate. Chinese suppliers' share of the company's U.S. seaborne imports dropped to 91.6% in October from 99.0% in 2018.

(Panjiva Research - Logistics)

Glatfelter stays steady, may face Brexit risk in 2021

P H Glatfelter Co. reported unchanged revenues in the third quarter of 2020 compared to a year earlier, with the engineered materials manufacturer outperforming analysts' expectations for a 3.0% decline. U.S. seaborne imports linked to the company dipped just 1.4% in the quarter, year over year.

The company has stated "demand for certain of our products will remain strong," though imports in October dipped 6.2% year over year. As a supplier of "life sustaining" products, it is important that Glatfelter has "successfully maintained our global supply chain."

The share of shipments to the U.S. from the U.K. reached 59.9% in the third quarter versus 55.7% a year earlier. That leaves it somewhat exposed to the risk of a no-deal end to current trading arrangements between the U.K. and the EU.

(Panjiva Research - Materials)

Laredo expansion may cut into Monterrey’s airfreight growth

American Triple I and Aviation Facilities Company Inc. may expand cargo handling facilities at Laredo airport in Texas. This would provide an alternative supply route for importers to Mexico that have previously relied on Monterrey airport in Mexico.

Monterrey has seen a 13.0% surge in inbound airfreight in September and has outperformed the national average over the past two years. Amazon was the largest user of Monterrey airport by number of shipments in the 12 months to Sept. 30.

Shipments linked to the company climbed 36.4% higher in September, though they were unchanged in the third quarter overall. Shipments linked to Panasonic Corp. dropped 10.5% in the third quarter following pandemic-induced industrial closures earlier in the year, while TRUMPF GmbH + Co. KG's increased by 8.9%.

(Panjiva Research - Logistics)

Christopher Rogers and Eric Oak are researchers at Panjiva, a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence.

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