Inbound Logistics | January 2024

TAKEAWAYS

2024: Year of Optimism and Growth? Overcoming a slew of recent challenges seems to be breeding optimism in the supply chain sector. After enduring disruptions such as the pandemic, geopolitical conicts, and monetary tightening, businesses are now adopting a growth mindset, according to Dun & Bradstreet’s Q1 2024 Global Business Optimism Insights report. This is despite the fact that the report shows a downturn in global supply chain continuity due to geopolitical tensions, trade disputes, and climate- related disruptions in maritime trade causing higher delivery costs and delayed delivery times. “Global businesses are adopting a more pragmatic stance towards their future,” explains Neeraj Sahai, president, Dun & Bradstreet International. “This shift in mindset suggests anticipation of additional growth in the forthcoming quarters, albeit with an underlying sense of continued caution.” Key ndings from the report’s ve indices—measuring Q1 2024 compared with Q4 2023—reveal the following: • The Global Business Optimism Index increased by 6.6%, indicating that businesses in advanced economies now feel more condent about their ability to absorb geopolitical and policy shocks, and are focusing more on growth opportunities. • The Global Supply Chain Continuity Index fell sharply by 6.3%, with suppliers’ delivery time and delivery cost indices both deteriorating. • The Global Business Financial Condence Index increased by 10.1%; in addition, liquidity is expected to increase across rms of all sizes and businesses are more optimistic about their competitive positioning. • The Global Business Investment Condence Index rose 10.7%, showing a growing consensus that major central banks in advanced economies have reached a peak in the current interest rate hike cycle. • The Global Business Environmental, Social and Governance (ESG) Index increased 7%, reecting a positive shift in the commitment of rms worldwide towards sustainability practices. Quadrant of Optimism – Global Business Optimism Index

OVERSUPPLY MAKES WAVES FOR OCEAN SHIPPERS What do ocean freight experts see for 2024? Shippers should expect more service disruption as container lines seek to manage oversupply and limit losses, predicts Philip Damas, managing director of Drewry Shipping Consultants and head of Drewry’s Supply Chain Advisors practice. To control the level of oversupply, Damas expects a greater number of blank sailings, which will significantly reduce the predictability of containership departures. Here are Damas’ key predictions: • Container lines will collectively record profits of roughly $20 billion for 2023, but the oversupply of vessels will result in a collective loss of $15 billion in 2024. • 2024 will be an ocean freight buyer’s market, and shippers should be able to secure significant rate cuts. “But,” Damas warns, “there will be a price to pay: the service reliability and service level of carriers will probably worsen.” • In 2024, shippers will also need to contend with new EU Emission Trading System (ETS) surcharges from carriers. While current ETS surcharges on most trades are not high, Drewry is concerned about whether surcharges are “set at a justified, reasonable level,” as ETS surcharges are likely to more than double in 2025 and 2026.

Source: Dun & Bradstreet International

40 Inbound Logistics • January 2024