GEOPOLITICAL uncertainties are reshaping the supplier strategies of companies internationally, reports Hellenic Shipping News Worldwide.
According to Container xChange's survey in February 2024, 63 per cent of respondents are seeking to diversify their supplier base, while 37 per cent are aiming to reduce their number of suppliers, a response to the Covid scare's lingering effects.
Ongoing geopolitical tensions in Eastern Europe and the Middle East have caused shifts in trade patterns, prompting industry players to reassess their supplier mix.
A US freight forwarder, also a Container xChange customer, highlights the challenge of finding reliable partners amid the Middle East conflict, which has reduced options in that region.
In February 2024, container leasing and trading rates reached a turning point after three months of continuous increase, coinciding with the onset of the Red Sea crisis.
This shift was in line with Container xChange's previous forecasts, anticipating a decrease in demand post-Chinese New Year, leading to lower average container prices and leasing rates.
Following the conclusion of the Chinese New Year holiday period and the resumption of business activity, container rates failed to maintain their upward trajectory.
Forecasts indicate an expected eight to 16 per cent decrease in container prices in China over the next two months (March and April 2024), mirroring the cyclic nature of post-Chinese New Year demand reductions.
Similar declines are anticipated in the US, particularly in ports like Vancouver and Toronto, as well as in Europe during the same period.
Source: shippingazette