International Oil
OPEC extended until December 2024 the decision taken in April this year, to reduce the supply of oil by 1.6 million barrels per day, which will continue to pressure the price of international oil.
Conflicts
The Trade War between the United States and China remains intense, as well as the climate in Europe with the conflict between Russia and Ukraine that seems to have no solution in sight.
An increasingly hostile environment between China and Taiwan, because in the event of an armed conflict for the reintegration of Taiwan into Chinese territory, which could involve the United States and Europe, it would also create chaos in the South China Sea, through which half of all the world’s goods and oil passes through it.
Environment
A very serious concern with the Environment, since the change from the Cold Phase of El Niña to a Warming Phase, El Niño, can generate chaos in all economies, as the electrical grids suffer constant pressure and blackouts, even turning off the energy from large factories, as occurred in China last year, in addition to droughts and floods in some regions of the globe.
Import
Importers’ inventories remain high, shift in consumer spending towards staples rather than discretionary goods, weakening of the global macroeconomic scenario and the above risks are some of the reasons why buyers are very cautious when thinking about new volumes for the second semester that is moving closer and closer to the pre-pandemic levels of 2019.
Consequences
In this way, even entering the second half of the year, when it would be a preparation for the High Season of Purchasing, nobody managed to see the return of Demand in the Horizon of any Nation.
In Maritime Transport, despite the average price of freight in the main Ports of the World having already suffered a reduction of almost 90%, the expected deliveries of new and larger ships later this year, should further unbalance supply and demand, which will result in the possibility of further declines in sea freight, even during a traditional High Season.
In Air Transport, the combination of more aircraft available and fewer shipments continues to put downward pressure on air cargo rates as only 55% of cargo space on aircraft is occupied.
Many Air Freight Agents who secured dedicated freighters when the market was booming, now cannot service, are willing to offer ultra-low rates to cut their losses, especially in countries like Vietnam and Hong Kong.
Due to the bleak economic conditions at the moment, air freight is likewise seeing hopes for a Peak Season this year dwindle.
Conclusion
In view of all these factors, and with input prices still high with the main suppliers in the world, we believe that you should look for closer supplies and a well-planned Logistics Operation, you can take advantage of the moment and create a stock with a lower cost to the current level and be more competitive at the right moment of recovery.
The Specialist in International Logistics, such as MAC Logistic, will be able to generate the necessary solutions as well as forward to the opportunities that arise in the midst of any scenario.
