The Global Issue: Crisis mode lingers

The motion-blurred image of a carousel that graced the cover of the January Freight Rate Outlook issue of Logistics Management (LM) could easily be reprised for our Global Issue this month. The idea of static elements going round and round in what feels like an endless cycle could be the illustration that best summarizes our current global environment as well.

While we’re starting to see and feel some better economic news here in the United States, we continue to monitor what feels like one crisis after another overseas. The ongoing war in Ukraine; the escalation in the Middle East; and now hundreds of cargo ships are being rerouted around the southern tip of Africa to avoid Houthi attacks in the Red Sea, while the severe drought continues to pinch productivity at the Panama Canal. The costs—both time and money—will only continue to mount.

This month, the editors of LM have set out to help global logistics professionals better manage through the current maelstrom that’s pulling so much efficiency out of our operations. Our goal is to offer shippers a snapshot of the current global challenges, and then explore where we are in terms of global services and technologies that could be put to work to ease some of the burden.

And there’s no better person in our orbit to offer LM’s Global Logistics Outlook than long-time contributor Dagmar Trepins. From her location in Denmark, she’s well-connected throughout the European and Asian transportation and logistics markets, and has been watching the evolution of global freight services for us for the past 20 years.

“Most of my sources shared that they were nearly certain that 2023 was going to be the year that we’d get back to normal on the global supply chain front,” says Trepins. “It was far from it. In fact, things just got worst.”

Staring on page 20, Trepins neatly encapsulates rising geopolitical and environmental pressures that will remain this year; she spends some time exploring how many companies are reevaluating their logistics strategies throughout Asia; and she shares how global logistics services providers are putting new technologies such as Artificial Intelligence (AI) to work to increase supply chain visibility and optimize processes to better respond to ongoing disruptions.

“Unfortunately, figuring out how to emerge from this ongoing crisis mode will remain a challenge for shippers everywhere in 2024,” says Trepins. “With that in mind, extra care and diligent logistics management will need to be applied in order to make the most of this current environment. However, the situation should help shippers improve operations for the long term.”

While Trepins’ cover story is the keynote to this month’s issue, we have two other pieces of required reading this month. Starting on page 26, contributing editor Karen Thuermer offers her Annual Ocean Carriers Trends, while on page 32 contributing editor Bridget McCrea dives into the state of global trade management (GTM) software—a solution that should now be a top priority for every shipper moving freight outside the United States.

Thuermer reports that all shippers need to keep their eyes on the daily news. “Heading into November, it was clear that the shipping boom of 2020-2022 was over, and the ocean carrier industry was rapidly sliding into severe over-supply,” says Thuermer. “But then, in December, we saw the terrorist attacks on ships in the Red Sea. And now, because of restrictions with the Panama Canal as well, the picture has become completely diluted.”

With the convergence of crises creating a great demand for vessels, could the problem of overcapacity be resolved? Thuermer reports we’ll see soon enough.