Crypto News: Supply Lines: Volatile year ahead

Global trade's wild ride began to calm down last year after the pandemic, but 2024 is already shaping up to be tumultuous for a host of other reasons.

Extreme weather tops the list of next year's threats to global supply chains, according to Everstream Analytics' annual risk outlook released Wednesday.

The US experiences a billion-dollar weather event every three weeks compared with every four months in the 1980s — a trend that's set to increase as the new year begins with ocean temperatures at record highs.

An historic drought has forced restrictions at the Panama Canal that mean capacity limits and longer waiting times for ships waiting to cross, with bulk carriers, freighters, and tankers bearing the brunt.

Big Take: Fixing the Panama Canal Hinges on Expensive and Divisive Gamble

Shipping operators planning to reroute cargo away from Panama through the Suez Canal are facing yet another challenge in the Red Sea, where Iran-backed Houthi rebels have been escalating attacks on commercial ships for the last two months.

Rising geopolitical instability is also a top risk for 2024, according the Everstream report, which predicts that Taiwan will be the primary geopolitical hotspot to watch.

'Heavily Impact'

"But ripple effects from the situation in the Middle East — including in the Red Sea — will heavily impact shipping schedules going into the new year," Everstream CEO Julie Gerdeman said in an email.

At least 22 commercial vessels have been targeted in the Red Sea and Gulf of Aden since November, according to Everstream data, causing container shipping capacity through the area at times to drop to just 12.7 percent of normal.

On Tuesday, Maersk said it will once again stop letting its vessels sail through the vital trade corridor after another of its carriers came under attack in the space of a few weeks.

"This ongoing uncertainty and disruption to shipping schedules will likely cause delays and higher costs, especially for European supply chains," Gerdeman said.

And tensions are also on the rise in the Horn of Africa, where a pact between Ethiopia and breakaway Somaliland that would give the landlocked nation access to the Red Sea, sparked a row with neighboring Somalia.

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Here are some other key takeaways from Everstream's report:

Cyberattacks on supply chains rose to a five-year high in 2023, and the trend isn't slowing down. Ransomware and data breaches will continue to plague companies, sub-tier suppliers and logistics providers in the coming year.
Commodity shortages caused by extreme weather events and high input prices will hit global markets as top-producing countries respond to smaller harvests with protectionist measures on exports.
Meanwhile, more commodities and products are becoming ensnared in protectionist policies and trade disputes, especially between the US and China. A gap between increasing trade war restrictions and shifting technology investments will emerge this year, especially for companies that rely on high-tech components previously available from Chinese suppliers.
A wave of environmental regulations and net-zero policies set to take effect this year will disrupt supply chains even for companies with robust ESG policies in place.

—Laura Curtis in Los Angeles

Shipping weapons | A dormant North Korean port near the border with Russia has sprung back to life, fueling what experts say is a burgeoning trade in arms destined for the frontlines in Ukraine that is simultaneously bolstering the anemic economy managed by Kim Jong Un. Satellite imagery of the Najin port taken from October to December shows a steady stream of ships at the facility, hundreds of shipping containers being loaded and unloaded, and rail cars ready to transport goods. The activity appears to have picked up since early October, when the US accused North Korea of sending munitions to Russia.

Manufacturing activity in India moderated in December, while still outperforming Asian peers as new orders and business confidence continued to grow. Meanwhile, South Korean exports continued to grow last month.
Dutch technology company ASML canceled shipments of some of its machines to China at the request of the Biden administration, weeks before export bans on the high-end chipmaking equipment came into effect, people familiar with the matter said.
Rivian missed expectations for quarterly electric vehicle deliveries, weighing on the manufacturer's shares even as production ramped up during the past year. And Tesla delivered more vehicles than expected last quarter, though not enough to stay ahead of China's BYD in global electric-car sales.
China wants to extend its lead in global shipbuilding to a new generation of vessels that burn cleaner fuels. Meanwhile, China's first domestically built cruise ship was set to begin its maiden voyage this month.
China has restored import levies on coal from the beginning of the year, a move that could threaten Russian exporters dependent on the world's largest market for the fuel.
Vietnam's economy fared better than expected in 2023, in signs it will improve from here as consumer demand returns, exports recover and investments surge.
Russia has based its Black Sea fleet in Crimea for 240 years. Now President Vladimir Putin is at risk of losing the flagship naval hub as Ukraine steps up attacks in the occupied peninsula.

The trucking sector looks set to emerge from a dark 2023, according to a Bloomberg Intelligence/Truckstop survey that indicates the rate cycle appears close to turning higher.
Companies are poised to face new climate disclosure requirements, greenwashing scrutiny and international supply chain risks amid increasing environmental, social and governance politicization in 2024, Bloomberg Law reports.
Run SPLC after an equity ticker on Bloomberg to show critical data about a company's suppliers, customers and peers.
Use the AHOY function to track global commodities trade flows.
For freight dashboards, see {BI RAIL}, {BI TRCK} and {BI SHIP} and {BI 3PLS}
Click HERE for automated stories about supply chains.
On the Bloomberg Terminal, type NH FWV for FreightWaves content.
See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.

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