< PreviousLOGISTICS LEADERS |TRISTAR 30 www.logisticsmiddleeast.comDECEMBER 2023 - JANUARY 2024 | LOGISTICS MIDDLE EAST T he Dubai-headquartered global provider of fully integrated energy logistics solutions specialising in road and maritime transportation, fuel farm management, commercial aviation refuelling, specialised warehousing, and turnkey fuel supply operations, delivered robust fi nancial performance for the fi scal year ending December 2023, with projections indicating gross revenues of $1.1 billion (AED4 billion)— an impressive 32% year-on-year (YoY) growth compared to the $832 million (AED3 billion recorded in 2022, at a forecasted EBITDA of $210 million (AED771 million). With extensive operations across 29 countries and international territories spanning the Middle East, the Americas, the Pacifi c, Africa, Asia, and Europe, the company’s total assets stood at $1.5 billion (AED5.5 billion), as of 30 October 2023. With a workforce comprising nearly 2,500 professionals and skilled workers representing more than 30 nationalities, the company prioritises safety through specialised training programmes aimed at ensuring the competency and safety of its team members. Tristar also boasts a commendable safety record, with zero fatalities recorded over 17,495,381 man- hours and 67,028,108 kilometres covered by its fl eet, at an HSE incident rate of 10. In 2023, Tristar's Maritime Logistics business solidifi ed several strategic partnerships, including a joint venture (JV) with MTM Ship Management to off er full-service and bespoke solutions to vessel owners and an agreement with Singapore’s Norstar Shipping to charter and operate clean petroleum product tankers from its headquarters in Dubai and branch offi ces in Singapore and the US. Moreover, the company renewed contracts with energy majors Exxon, BP, Shell, and TotalEnergies. It also enhanced its collaboration with Oman’s Sohar Port to develop the maritime hub’s storage facilities, with plans to acquire a new electric battery-operated barge for an oil major. Tristar Fuel Farms, Commercial Fuels, and Remote Fuels business expansion initiatives were prominent across the UAE and Africa, with key developments including a new dangerous goods warehouse at the Hamriyah Free Zone in Sharjah and multiple fuel stations in Kenya. Furthermore, the group’s aviation fuel facility at Bangui International Airport in the Central African Republic, set to be operational in December 2023, and expansions across Uganda and Somalia further underline its global growth strategy. Over and above, Tristar launched six additional fuel stations in Kenya, raising the tally to 17 stations across the country. The group also inked a contract with Toyota Tanzania Limited as an authorised partner to distribute the Caltex range of products in the country until 2026. Tristar's Road Transport and Warehousing business also witnessed signifi cant strides in 2023, with the commissioning of a new 10,000 square metre truck staging station in Qatar and agreements with Baker Hughes for chemical transportation to Aramco rig sites in Saudi Arabia. Correspondingly, Tristar Saudi Arabia continued to nurture long-standing partnerships with industry leaders including Saudi Aramco, Sabic, Linde Global Helium, Shell, Gulf Cryo, Champion X and Linde-Sigas, among others. Moreover, the group is currently constructing a warehouse, strategically located within its Dammam compound, set to become the fi rst LEED-certifi ed dangerous goods facility in Saudi Arabia. Renewals and expansions defi ned Tristar's performance in 2023, with contractual agreements with TotalEnergies for bulk lubricant distribution and secondary transport, Shell Marketing Middle East for warehousing and distribution of lubricants in the UAE and Oman, DOW Chemical for GCC road transport, BP Middle East for road transport, and ADNOC for the transportation of petroleum products within the UAE. Celebrating 25 years in business, Tristar has performed exceptionally well across the Fuels, Maritime, Fuel Storage, and First and Last-mile Road Transport businesses, with another milestone on the horizon—$1.1 billion (AED4 billion)in top-line revenue for 2023. $1.1 BILLION projected revenues for 2023 TRISTAR GROUPFLOW PROGRESSIVE LOGISTICS |LOGISTICS LEADERS 31 www.logisticsmiddleeast.comLOGISTICS MIDDLE EAST | DECEMBER 2023 - JANUARY 2024 B ased in Saudi Arabia, Flow Progressive Logistics (Flow) specialises in delivering comprehensive logistics and supply chain solutions and services, ranging from local and cross-border clearance and transportation to warehousing, fulfi lment, bulk and parcel delivery, freight forwarding, relocations, personal storage, and specialised projects. Founded in 2014 as part of the Al Sulaiman Group (ASG), the company boasts an extensive operational footprint in Saudi Arabia, the UAE, and Bahrain. Flow concluded its 2023 fi scal year ending in August 2023 on a high note, exhibiting a robust fi nancial performance. Revenue saw a notable surge, growing by $26.6 million (SAR100 million), a 12% increase compared to 2022. Similarly, net profi ts experienced a substantial $7.7 million (SAR29 million) growth, refl ecting an 80% upswing compared to the preceding year. Despite challenges related to capacity constraints in transportation and warehousing, as well as investments and strategic partnerships, Flow’s strong performance was driven by its emphasis on automation and sustainability measures. The company’s EBITDA demonstrated a notable upward trajectory, exhibiting a 60% increase compared to the same period last year. with 14 strategically positioned sorting and delivery hubs across Saudi Arabia, the UAE, and Bahrain. With a workforce of 1,700 professionals, the company maintains a 90% warehouse effi ciency and utilisation rate, in adherence to ISO standards. As part of its market expansion strategy, Flow launched multiple growth-focused projects and ventures in 2023, including the establishment of in-house clearances at all gateways and seaports, the successful deployment of “Flow Pro” services and freight forwarding services, and the seamless introduction of last-mile delivery services in the UAE. Throughout the year, the company solidifi ed its commitment to expansion by signing and renewing over 100 strategic partnerships, further enhancing its network across Saudi Arabia, UAE, and Bahrain. Moreover, Flow is actively implementing a comprehensive fi ve-year strategy aimed at positioning the company as the preferred end-to-end logistics and supply chain solution provider, in line with the Saudi Vision 2030 goals and regional development objectives. The organisation is committed to contributing positively to the logistics landscape by consistently enhancing its operations and forming strategic alliances. In doing so, Flow aims to serve as a dependable partner, adept at meeting the region’s evolving logistics needs. FLOW PROGRESSIVE LOGISTICS Meanwhile, its profi t margin grew by $2.6 million (SAR10 million), representing a 23% upturn compared to the year-ago period. Equipped with an expansive fl eet of 500 heavy and bulk delivery trucks, 180 domestic and cross-border transportation trailers, 70 express delivery vehicles, 30 temperature- controlled vans, and 20 low-bed trailers, Flow has achieved signifi cant milestones in 2023. The company fulfi lled over 120,000 last-mile delivery (LMD) orders and completed more than 25,000 B2B trips. Strategically positioned just three kilometres from the King Abdullah Port, Flow operates from its King Abdullah Economic City (KAEC) Distribution Centre. This modern facility is semi-automated, SFDA-certifi ed, and equipped with advanced temperature-control features. Moreover, the distribution centre boasts a total storage and handling capacity of 66,000 bins, 48,000 pallet positions, 15,000 square metres of fl oor storage, and 30,000 square metres of yard storage. Additionally, the company’s Riyadh Distribution Centre operates as a dry and temperature-controlled facility with a capacity of 67,000 pallet positions and 15,000 square metres of fl oor storage. Flow also operates fi ve smaller distribution centres in Dammam, Jeddah, Madinah, Dubai, and Manamah, alongLOGISTICS LEADERS |LOGIPOINT 32 www.logisticsmiddleeast.comDECEMBER 2023 - JANUARY 2024 | LOGISTICS MIDDLE EAST L ogiPoint is a premier industrial and logistics real estate developer based in Saudi Arabia, specialising in developing, managing, and operating bonded and non-bonded logistics parks and special economic zones. The company provides specialised infrastructure to the supply chain and logistics industry, propelling rapid growth in trade and development while attracting local and international investment into the logistics sector. Headquartered in Jeddah, LogiPoint has a growing footprint across Saudi Arabia and operates primarily within the kingdom, also catering to the broader Middle East region and clients in Africa, Europe, and Asia. The company serves the entire spectrum of the logistics and supply chain industry, including a diverse array of sectors such as petrochemicals, automobiles, foodstuff and perishables, pharmaceuticals, machinery and project logistics, freight forwarders and 3PL companies, e-commerce, This facility is expected to play a strategic role in bolstering Aramex’s presence in the Saudi Arabian market. Additionally, 2023 saw the introduction of a new Value Added Services Facility, which will enable LogiPoint to expand its suite of services and allow it to venture into previously untapped market segments. At the same time, the business intensifi ed its focus on the pharmaceutical sector and the cold chain segment. Moreover, the company is expanding its operations to new locations in the Central Western region of Saudi Arabia, as well as other areas within the Kingdom. Committed to employee development, LogiPoint has invested in a variety of internal and external training programmes and, in recent years, has incorporated online training programmes off ered by international trainers and learning platforms including LinkedIn and Coursera, ensuring its team remains at the forefront of industry expertise and innovation. LOGIPOINT express delivery, and FMCG, among others. In 2023, LogiPoint celebrated a signifi cant milestone with the completion and inauguration of twin state-of-the-art warehousing facilities constructed in compliance with sustainability standards and ESG protocols. Towards the end of Q2 2023, the company inaugurated the Warehouse Village 5, a 35,000 square metre, multi-purpose facility designed to serve a broad spectrum of clients. The facility is equipped with advanced zones for handling temperature-controlled cargo, including ambient, chilled, and frozen cargo, along with a dedicated pharmaceutical zone. This marked a fi rst for the kingdom in terms of specialised pharmaceutical goods handling in a dedicated bonded facility inside the port. Simultaneously, LogiPoint launched a 25,000-square-metre, built-to-suit facility tailored for Aramex, one of the world’s leading 3PL and express delivery companies.SAVOYE |LOGISTICS LEADERS 33 www.logisticsmiddleeast.comLOGISTICS MIDDLE EAST | DECEMBER 2023 - JANUARY 2024 S avoye is a global provider of advanced supply chain and logistics solutions, specialising in warehouse automation and software. The company off ers a comprehensive suite of systems and technologies designed to enhance warehouse effi ciency, reduce operational costs, and elevate overall logistics performance by optimising order fulfi lment, distribution, and logistics processes. Savoye’s solutions are tailored to cater to an array of industries, including e-commerce, retail, manufacturing, and distribution. Beyond its global reach, Savoye has established a signifi cant foothold in key Middle Eastern markets, especially in the UAE and Saudi Arabia. With extensive operations in over 40 countries, the company has implemented its solutions in more than 700 warehouses, seamlessly managed by its Warehouse Management System (WMS). Moreover, the company’s systems are presently integrated into over 1000 platforms. Savoye’s expansive network enables it to off er customised logistical solutions tailored to meet local demands and specifi cations. As of October 30, 2023, Savoye’s workforce stood at 900 employees globally. In 2022, the company conducted over 100 recruitment drives, strategically building a team of approximately 1,000 skilled professionals. Savoye’s commitment to the development of its workforce is evident through internal training programmes, specialised onboarding for new talents, technology-focused training, and customer training programmes, all overseen by a skilled team of experts in training and logistics. In 2023, Savoye Middle East forged a new partnership with New East General Trading to implement its Autonomous Case-handling Robots (ACR) system at the company’s Dubai Distribution Centre, marking the solution’s debut in the Middle East. The company’s successful entry into the Saudi market was propelled by various strategic collaborations, including its partnership with CJ Logistics to establish a fully automated fulfi llment centre, to serve as a Global Distribution Hub for iHerb’s e-commerce operations in the region. Despite the fi erce market competition fuelled by advancements in AI and related technologies, Savoye stands out by continuously innovating and introducing novel solutions to the region’s logistics sector. The company’s fl agship software system, ODATiO, provides end-users with essential tools to customise processes in alignment with their business needs, enabling them to maintain a competitive edge in the rapidly evolving industry landscape. SAVOYE34 DECEMBER 2023 - JANUARY 2024| LOGISTICS MIDDLE EASTwww.logisticsmiddleeast.com OPINION|INTEGRATED LOGISTICS A midst the dynamic nature of freight markets driven by geopolitical conditions, changing consumer behaviours, extreme droughts and other supply chain risks, there is an increasing demand for highly eff ective integrated logistics solutions, presenting a valuable opportunity for positive advancements. Over the past few years, shippers have made signifi cant progress in building more resiliency into their supply chain, after the pandemic revealed greater risks to supply chains that were not adequately diversifi ed or did not have access to integrated solutions that allowed them the fl exibility to mitigate disruptions. Today, strategies like mode and lane diversifi cation, and nearshoring, which brings the supply chain closer to the end consumer, are driving increased demand for end-to-end solutions as shippers continue to look for ways to not only optimise their supply chain but also, diminish risk. THE UAE'S STRATEGIC LOCATION For the past couple of decades, the UAE has established itself as a leading logistics hub. However, it continues to expand its boundaries further with increased investments in local infrastructure, including more warehousing possibilities, free zone capabilities, increasing global terminal presence, fendering capabilities and advancing its rail transportation agenda. This provides compelling solutions for companies seeking to enter the Middle East and North Africa (MENA) market. The UAE airlines are also growing by expanding their networks, and the destinations they serve, with plans to develop the required infrastructure for effi cient cargo handling. The fact that 65% of cargo arriving at the UAE is transshipped to onward destinations is a testament to its success as a logistics hub for both ocean and air shipments. The market has also seen signifi cant investment by private players into more advanced warehousing and distribution infrastructure, catering to the booming e-commerce and food and beverage industries, along with other signifi cant traditional industry segments. SHIFTING GEARS Sandeep Pandey, Regional Director - Middle East at C.H. Robinson, delves into the growing necessity for integrated logistics solutions in a rapidly evolving marketplaceINTEGRATED LOGISTICS|OPINION 35 LOGISTICS MIDDLE EAST | DECEMBER 2023 - JANUARY 2024www.logisticsmiddleeast.com etc. involve a myriad of combinations where a balance must be maintained to avoid unnecessary ineffi ciencies and potential loss of sales for the company. As one of the world’s largest logistics providers, C.H. Robinson has accumulated signifi cant experience with industry-agnostic supply chains, bringing insights and solutions to the table with regard to overseas or new markets, locating distribution partners for exporters, and more. With our global reach, innovative technology, and extensive transportation network, shippers have access to our team’s expertise and the latest learnings to bear their unique challenges and desires. Leveraging our scale, our team crafts innovative and tailored solutions that help our customers optimise their supply chains and stay ahead of their competition in an ever-evolving market. THE COMPLEXITY OF GLOBAL LOGISTICS Global logistics is aff ected by a myriad of external infl uences, and consequently, complexity is always associated with it. The bullwhip eff ect of global disturbances on global trade, and the movement of goods requires constant planning and replanning. Building resilience and business continuity plans are important today to ensure that there are plans to mitigate the undesirable eff ects of such events. Integrated solutions have the advantage of a single service provider having an overview of the complete supply chain and can work through the foreseen (or unforeseen) constraints or bottlenecks due to any event. More often than not, there is only a certain part of the supply chain rhythm that gets disturbed (theory of constraints). Unless someone can point it out, or more importantly, predict the downstream eff ect, measures to counter challenges in just one part of the chain will not be enough. Moreover, integrated solutions are gaining ground as market expansion strategies need experienced service providers to assist with navigating the local complexities, regulatory included. DATA AND ANALYTICS The UAE is often praised for its effi ciency and convenience, a testament to its widespread digital transformation, which signifi cantly impacts the logistics sector. Data and analytics are the foundation of key learnings and improvements. With millions of shipments moving every minute across the globe, and consequent quantitative and qualitative parameters being measured, the amount of data available is enormous. From operational effi ciency, demand forecasting, trade patterns, consumption trends, geographic industry shifts, and upstream and downstream manufacturing ecosystems, C.H. Robinson can utilise historical and real-time data to help shippers make smarter decisions for their supply chain now and in the long term. With the pace of change today, service diff erentiation based on the speed of analysis is a game changer. THE ROLE OF TECHNOLOGY The objective of technology should be a simple two-fold approach: enhance the customer experience and convenience, and operational effi ciency. While standard visibility is a standard in today’s world, the diff erentiation is the intelligence that can support the customer, driven by business analytics and the right team to deliver smart solutions based on those analytics. C.H. Robinson's technology platform connects hundreds of thousands of our customers and carriers, providing not only visibility, reporting and analytics but also producing solutions to help drive our customers' and carriers’ businesses forward while reducing costs and waste. Integrated solutions have the advantage of a single service provider having an overview of the complete supply chain Sandeep Pandey, Regional Director - Middle East, C.H. Robinson Expanding into new geographies has been ongoing for some time. These new markets present an opportunity for potential growth in the short and the long term, owing, in part, to the purchasing power of the new generation in these markets. While UAE manufacturers have not made signifi cant inroads into mature markets, there remains substantial untapped potential in that sector. The UAE's focus on increasing the manufacturing contribution to the GDP could lead to a more diversifi ed portfolio of products and the consequent search for markets to place these products competitively against the traditional supplier base. 3PL PROVIDERS Whilst the cost of manufacturing any product is known to the exporter and is under their control, the supply chain leading up to the point of consumption requires special expertise in the associated cost and effi ciency. Logistics operations, from storage to handling, international freight, distribution, INTERVIEW |TRISTAR 36 www.logisticsmiddleeast.comDECEMBER 2023 - JANUARY 2024 | LOGISTICS MIDDLE EAST A s sustainability continues to take a prominent role on the global stage, the Middle East, particularly after Dubai's successful hosting of COP28 in late November, has emerged as a key advocate for sustainable practices across diverse business sectors. Against this backdrop, Tristar Group’s journey shines as an exemplar of excellence. In the late 1990s, Eugene Mayne, a seasoned veteran in the oil and gas industry with over two decades of experience, identifi ed a critical need for safe and reliable road transport services for the UAE's burgeoning petroleum sector. With a blend of industry insight and cautious ambition, he established Tristar as a small business in 1998. Fast forward 25 years, and the company has transformed into a global powerhouse in energy logistics. "Tristar has proliferated into an energy logistics corporation on the back of key partnerships, strategic acquisitions, and long-term contracts, and our operations now span 29 countries and territories," Mayne states, emphasising that Tristar's success is deeply rooted in its integrated energy logistics services. This holistic approach has enabled the company to build relationships with a diverse array of international customers, particularly with the oil majors. Furthermore, the company's consistent delivery of strong fi nancial results, with an impressive double-digit annual Compound Annual Growth Rate (CAGR), has solidifi ed its position as a trusted logistics partner. Mayne highlights Tristar's long-standing commitment to Corporate Social Responsibility (CSR), including the early adoption of an Environmental, Social, and Governance (ESG) framework and Diversity, Equity and Inclusion (DEI) policies, underscoring the company's active role in supporting local communities through initiatives in education, clean water, health, and environmental protection. OPERATIONAL MILESTONES Refl ecting on the past 25 years, Mayne highlights key milestones that have propelled Tristar's growth and development. From its humble beginnings as a UAE road transport service, the company has expanded into four distinct business segments encompassing transport, storage, and distribution services both on the road and at sea, operating across the Middle East, the Americas, the Pacifi c, Africa, Asia, and Europe. Reminiscing about Tristar's pivotal partnership with Agility in 2003, then known as PwC Logistics, Mayne states, "They brought in much-needed fi nancial capital and strategic value to Tristar,” affi rming that the collaboration enabled the company to develop and realise several untapped market opportunities. "In 2007, Tristar entered Africa to manage one of the largest turnkey fuel supply contracts awarded to any company on the continent by an intergovernmental organisation (IGO). Two years later, we won a second African contract with the same IGO," he recalls, citing the noteworthy acquisition in 2009. "We also acquired a four million barrel capacity storage facility for holding strategic fuel reserves, halfway across the world, in the Pacifi c island of Guam." Tristar's acquisition of Abu Dhabi-based Emirates Ship Investment Company (Eships) in 2016, for $90 million (AED330.5 million), marked another signifi cant milestone in the company’s growth journey. This strategic move has set the stage for the company's continued expansion in 2022, with a $215 million (AED789.5 million) deal to acquire a 51% stake in HG Storage International Limited (HGSI), further extending its global footprint and signifi cantly increasing its fuel storage capacity. Tristar is adopting biofuels for our heavy commercial vehicles and transitioning to electric vehicles (EVs) next year Eugene Mayne, CEO, Tristar GroupTristar's fuel farm in Guam BUILDING A LEGACY Tristar Group CEO, Eugene Mayne, shares exclusive insights into the company’s progressive evolution over 25 years and commitment to sustainabilityTRISTAR |INTERVIEW 37 www.logisticsmiddleeast.comLOGISTICS MIDDLE EAST | DECEMBER 2023 - JANUARY 2024 “We are exploring solar, wind, and other green energy options to continue our net-zero journey," he adds. GROWING BEYOND 2023 Looking beyond 2023, Tristar's achievements have set the stage for further regional and global growth. According to Mayne, 2023 saw various landmark developments within the company: commissioning a 450k barrel bulk fuel tank in Guam for the Defence Logistics Agency, forming partnerships with Singapore’s MTM Ship Management and Norstar Shipping, expanding the Turnkey Fuel Supply business through new contracts and fuel facilities in Africa, renewing contracts in the Road Transport and Warehousing business with major global fi rms, and forming new partnerships in Saudi Arabia through its subsidiary, United Stars. While Tristar's journey has been marked by achievements, both challenges and opportunities lie ahead. Mayne acknowledges that while hydrogen is a promising solution for a sustainable future for the oil and gas industry, it faces hurdles like supply scarcity, infrastructure gaps, and high costs. Nevertheless, Tristar is taking steps to pilot hydrogen usage for its captive fl eet, with future plans to share this with others. Refl ecting on human welfare, Mayne highlights 'Safety at Sea', an annual event started as a tribute to a seafarer lost to suicide – which has since grown signifi cantly and gained industry-wide support. As we approach the end of our conversation, Mayne shares his vision for Tristar's future. "To expand our presence in the wider Middle East, we are studying near-term expansions in Saudi Arabia, and new opportunities in Egypt," he says, highlighting that international partnerships and cooperation drive the company's pursuit of industry-wide transformation. "Our teams continue to diff erentiate and elevate the Tristar brand with exceptional levels of safety, service, and sustainability – be it in addressing social issues like DE&I, focusing on human empowerment and community development, or lowering our carbon footprint and increasing our contributions to protecting the planet," he concludes. 5% of Tristar’s deep-sea fl eet to use zero- emission fuels by 2030 A SUSTAINABLE FUTURE Tristar's decade-long dedication to sustainability has infl uenced its operations and strategy, leading to various eco-friendly initiatives. In 2022, it began disclosing its environmental impact through the Carbon Disclosure Project (CDP) and became a signatory of the Poseidon Principles, working with global fi nancial institutions to report emissions in its Maritime Logistics division. Elaborating, Mayne states that Tristar is actively transitioning to more sustainable practices as part of its 'Business for Purpose' philosophy. "Tristar is adopting biofuels for our heavy commercial vehicles and transitioning to electric vehicles (EVs) next year. We are committed to ensuring that at least 5% of our deep-sea fl eet uses zero-emission fuels by 2030 as part of the First Movers Coalition, and will launch an electric battery operated barge in Fujairah by early 2025,” he explains. Moreover, Mayne reveals that Tristar’s long-term sustainability strategies include hydrogen-diesel dual fuel (DF) mobility, next-generation internal combustion engines, and battery-powered and DF ocean-going vessels, pointing out that the solar power plants at the group’s two premises almost negate its electricity consumption while reducing emissions.SPECIAL REPORT |GLOBAL SHIPPING TRENDS 38 www.logisticsmiddleeast.comDECEMBER 2023 - JANUARY 2024 | LOGISTICS MIDDLE EAST TURNING TIDES SHIPPING TRENDS IN 2023 AND THE ROUTE TO 2024 The global shipping landscape has been defi ned by four predominant trends in 2023, with projections that they will continue to cast their shadows well into the coming yearGLOBAL SHIPPING TRENDS |SPECIAL REPORT 39 www.logisticsmiddleeast.comLOGISTICS MIDDLE EAST | DECEMBER 2023 - JANUARY 2024 A gainst a backdrop of formidable economic challenges, mounting infl ation, and profound changes in consumer behaviour, along with rising geopolitical uncertainties, and a pronounced shift towards diversifying supply markets, the global shipping industry found itself at the crossroads of an evident transformation in 2023. These factors have had a substantial infl uence on the sector, with indications suggesting they will continue to cast their shadow over the unfolding 2024. SUBDUED DEMAND According to Container xChange’s Trends and Impacts annual report, the sector has been largely infl uenced by the comparatively subdued growth in container demand, driven by a host of adverse economic infl uences, including surging infl ation, heightened interest rates, and consequent shifts in consumer spending patterns. The cautious consumer spending trend of 2023 is anticipated to persist in 2024, with households prioritising essentials over discretionary expenses, directly impacting the demand for imported manufactured products. According to the report, 74% of consumers have reduced their nonessential retail spending to better navigate fi nancial constraints, exerting a substantial infl uence on retailers’ demand for shipping containers. This trend is expected to continue well into 2024 and possibly beyond, ruling out the likelihood of a demand rebound within the next 12-18 months. The container shipping industry, known for its cyclical nature, experienced an extraordinary peak in 2021 and the fi rst half of 2022, marked by record rates and robust profi ts for shipping companies. However, consumers have signifi cantly cut their spending on high-value goods in 2023, amidst global economic headwinds and mounting infl ationary pressure. This, in turn, led to a sharp decline in demand, than 7,000 TEUs, making up the remaining 17%. Considering the current market conditions, cargo carriers may have over-ordered vessels, potentially leading to an oversupply in the global market. This surplus, paired with reduced demand, could trigger intense competition and price reductions, adversely impacting carriers’ long-term profi tability. GEOPOLITICAL COMPLEXITIES The geopolitical landscape in 2023 has left an indelible mark on the global shipping industry, with eff ects expected to persist in 2024. According to the report, the confl ict in Ukraine, leading to the closure of Black Sea ports and causing congestion and delays in goods transportation, has been particularly impactful. Furthermore, the substantial decline in Ukraine’s exports, especially grains and food products, has contributed to global price hikes. Recent confl icts in the Middle East have further aff ected the shipping industry, triggering a quick drop in spot rates on major trade routes, ultimately contracting the container trade In 2023. The combination of rationalised consumption patterns and destocking practices further contributed to reducing cargo volumes, setting the stage for an anticipated oversupply in the market. ANTICIPATED OVERSUPPLY The capacity of new–build vessels, slated for delivery through 2025, increased to 2.95 million TEUs. These vessels include “Megamaxes,” with a capacity of 23,000-24,000 TEUs, representing 23% of the total mainline new buildings to be delivered; “Neopanamaxes,” with a capacity of 13,000-15,000 TEUs, constituting around 60% of the overall fl eet; and other mainline vessels, each with a capacity of more Establishing a manufacturing presence in a new geography is a gradual process, typically spanning more than two years Top carriers’ new-build vessels by size, courtesy of Container xChange [Source: FreightWaves] In 2023, consumers prioritised essentials over discretionary expensesNext >