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Market UpdateRounding Up Logistics Industry 2022

Rounding Up Logistics Industry 2022

2022 in Review - 20 Events That Took Over the Logistics Industry

The past few years have been a whirlwind all around the globe. After the disruptions from the Covid-19, the industries haven’t been able to recover completely, and the year 2022 added more things to make the industry complicated. The logistics industry has had its fair share of troubles in the year 2022 that created hiccups around the supply chain industry. While some things seemed to be improving, the issues of strikes and port congestion prevailed, causing the trade business to be affected. 

 

Here, we will be listing down some of the major trends and events that had a huge impact on the industry.  

 

Let the countdown begin.

20. 800 Dockworkers Down in Long Beach, LA Port After Omicron Hits

The year began with the hit of Omicron on the dockworkers of Long Beach, LA in early January 2022. Around 800 workers were affected by it, which makes 1 in every 10 workers a target of the pandemic. This led to the reduction of the port’s productivity by 20%. Due to the situation, the number of ships waiting off the coast reached a record 106 on New Year’s Day at Long Beach, LA. 

19. Russian-Ukraine War Took the World of Supply Chain by Storm

After the pandemic, the Russian-Ukraine war brought the supply chain industry to its knees. It has created barriers in the market, and impacted the movement of oil, auto parts, and grain. All of this led to price increases overall.  

 

As a result of the war, some ports were also closed; hence, increasing the ocean shipping cost. Many of the ships had to reroute, leading to delays and congestion, causing trouble for the global supply chain. Not only that, but there was also major havoc because of the container shortages during peak shipping season.  

18. Supply Chain Turmoil Due to Blank Sailings from Asia

Carriers tried to compensate for the current supply chain conditions with blank sailings; however, it wasn’t successful as the peak season curtailed. The average capacity from the shipments of Asia and US West Coast was reduced by 13% in comparison to February 2021. In Transpacific, following the Golden Week, the capacity reductions were expected to be 22-28% of deployed weekly capacity, which is the highest since 2014. 

Similarly, the capacity reduction from Asia to North Europe is higher than its average from 2014-2018, which is slightly under 20%. The only trade lane that experienced capacity reduction in line with the one in 2014-2018 is Asia-Mediterranean.  

17. Maersk’s Transition Towards Green Logistics

The supply chain industry is now moving towards green incentives and Maersk is one big example of that. The company initiated many projects in support of green supply chain operations in 2022, and some of the big ones are mentioned below. 

 

Maersk has entered an agreement of ‘Green Methanol Letter of Intent’ with SunGas renewables – a US based company. This step was taken to decarbonize the customer’s supply chain. Maersk also aligned their sustainable logistics objectives with Nestle Purina and came to an agreement to build up trains as a more sustainable mode of transportation from factory to the port.

16. Unceasing Labor Strikes in Europe

2022 has been a bit shaky for Europe’s supply chain due to the continuous labor strikes in different parts of the region.  

 

The UK rail workers were on strike and industrial protests over job loss and pay conditions. In Northern Ireland, the health workers were on the strike after the imposition of £1,400 pay raise for the year 2022/23. A similar problem was faced by UK Crown Post Office workers who protested the pay issues. The staff in the supply chain faced a two-week overtime ban, who were delivering cash to sub-post offices. These walkouts started in the May of 2022, which were again continued in November due to insufficient increase in pay for 2022/23.  

 

The incident of strikes continued the entire year, causing a negative impact on the supply chain in the region.  

15. FedEx Makes It to Fortune's Best Workplaces List

E-commerce logistics has become a vital part of the business and many companies are striving to leverage the maximum benefits out of it. FedEx is also one of them. FedEx – a leading business worldwide providing businesses transportation, e-commerce, and other business services – was again named in the top 25 World’s Best Workplaces list in Fortune Magazine. FedEx has been connecting people around the world and providing them with the possibility of business to fulfill their carbon-neutral operations by the year 2040. 

14. Zero Covid Restrictions in China Shook Supply Chain

The economic pain intensified due to China’s zero-tolerance Covid restrictions. It started a new wave of protests that badly affected the supply chain operations in the country. The economic growth of the country was projected to grow by 5.5% in 2022; however, Covid had other plans and the number fell below the expected. The supply chain industry had a rippled effect on account of these protests  

13. US Rail Industry Crisis Causing Supply Chain Disruption

Throughout the 2022, the labor crises in the railway industry posed a great threat to the shippers. The rail service declined drastically, causing delays in deliveries. The service issues in the rail industries have increased in the past year, which has made the supply chain conditions worse, increasing the costs and shipping delays. 

12. Port Congestion Peaks in the United States

The port congestion in November 2022 accelerated, causing a bad impact on the imports. This was the largest monthly decline in the financial condition and the biggest contraction in a month. The total inbound imports decreased 17.5% in a year, followed by a 26% decline at the West Coast ports. 

11. New Hydrogen Import Projects on European Ports

Green initiatives were the highlights of supply chain 2022. In the month of November, some European ports started partnerships to develop the hydrogen supply for their future fuels. A German company Hamburg has announced a large-scale green energy import facility. Similar project is also carried in France, Nantes port. 

10. Amazon Launches Supply Chain Software Service

Amazon decided to join big guns like Microsoft in making the supply chain more efficient. They launched a Supply Chain Software service that aims to add efficiency and visibility in the supply chain to overcome the gaps in the flow of raw and finished goods. This software is now ready for many small and mid-size companies in Amazon’s marketplace. 

These were some of the main events globally that happened in 2022 for the supply chain industry. This year was also a big one for the UAE supply chain, and here are a few of the highlights for the region. 

9. AD Port’s Group Acquiring Noatum Logistics

In November 2022, AD Ports expanded to the Mediterranean after acquiring Noatum Logistics at a value of $660 million.  The Noatum Logistics has its operation in 15 different terminals of Spain handling dry bulk, RO/RO, and general cargo. This will allow a better exposure for AD Ports to the ports of Spain and Mediterranean. 

 

The transactions of this deal are expected to be completed in early 2023 after all the regulatory approvals. 

8. Inauguration Of $1.1 Billion Khalifa Port Expansion Project by UAE President ​

Khalifa Port has further solidified its standings with a new project as a leading logistics company and one of the main gateways to the largest markets of the region.  

 

The UAE president has inaugurated an expansion project at Khalifa Port worth $1.1 billion. This expansion project involves Port’s Southern Berth, Abu Dhabi terminal, and Logistics Zone. 

7. AD Ports’ Largest Commerce Fulfillment Center in UAE

A subsidiary of AD Ports group, Khalifa Economic Zone Abu Dhabi (KEZAD) and a well-known online marketplace noon.com initiated UAE’s largest commerce fulfillment center. The total area would be 252,000 square meters, which is expected to be completed in 2024. New automation technology will be used that will help in boosting the local economy. 

6. X-ERA – A UAE Based Company Takes Over SPEED, An E-Commerce Platform

A UAE based company in X-ERA took over Egypt’s rising B2B ecommerce platform known as SPEED. This takeover is a great milestone in digital transformation that will assist in connecting the supply of FMCG products with different small and middle merchants, retailers, and soon the customers as well.  

 

X-ERA will redevelop the market with innovative solutions aiming to fit the retailer’s needs in different geographical areas. 

The year 2022 was full of ups and downs for the global supply chain. And the same scenario was for Al Sharqi’s team. As one of the leading logistics companies in the UAE, we catered to those challenges to provide only the best for our customers. Here are a few highlights of Al Sharqi in 2022. 

5. On Top of All the Latest Happenings in the Supply Chain Industry

Al Sharqi remained at top of the game the entire year and made sure its customers stayed up to date with all the latest events monthly. Our updates are a great source for logistics professionals to help them identify the threats and opportunities in the industry and get the maximum benefits for their business.  

 

Monthly Market Updates 

4. Serving the Clients with Utmost Professionalism

Al Sharqi never fails to serve the clients with professionalism and customized solutions to ensure the best results for them. Our trade solutions, 3PL services, and cargo transportation is one of the best in the UAE with different businesses approaching us for solutions for their logistics problems. 

 

Client Case Studies 

3. Annual Event

Every year, Al Sharqi Shipping hosts an Annual Event to celebrate its successes and recognize its employees for their hard work and dedication. This event is an opportunity for employees to gather and enjoy dinner, drinks, and entertainment.   

 

The Annual Event is an important part of Al Sharqi Shipping’s culture, helping to build a strong sense of community and appreciation. Every year, it is a night that employees look forward to, knowing that they will have a good time. 

2. Maersk Line Award

Yet again, Al Sharqi is named as the “Most Valuable Partner 2021” by Maersk. The exclusive event took place in Mandarin Oriental Jumeirah, Citronella Ballroom, which was attended by a selected few honorable and recognized top freight forwarders in the UAE. 

This award is a testament to our ability to be flexible, to be innovative in our solutions and more importantly to be the voice of our customers”  

Sadaf Rafiq – Director of Revenue and Pricing 

1. Solar Rooftop 3PL Facility

n the year 2022, Al Sharqi Shipping went live with its first green solar rooftop project on its 3PL facility in Dubai Industrial City. These panels cover a total area of 3800 sqm with a total power output of 370 KWP. The project was implemented with the partnership of Al Shirawi Solar LLC. The initiative was taken to reduce the company’s carbon footprint and maintain a sustainable energy source. 

“This initiative aligns with our goal to make Al Sharqi Shipping’s 3PL activities more responsible towards society and we have taken this step to reduce our carbon footprint”  

CEO Kashif Rafiq   

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