Episode Transcript
[00:00:00] Speaker A: Hello and welcome to the Lodestar podcast, News in brief. Now, if you are here looking for a roundup of last week's supply chain news, I am so sorry to disappoint you, but you are going to have to do it the old fashioned way and go back through our editorial coverage from last week. Instead, we are going to be giving you our insights from the year.
To join me for this episode, I am with Gavin Van Mul. Hello Gavin.
[00:00:25] Speaker B: Hello Charlotte.
[00:00:26] Speaker A: And Alex Linane. Hello Alex.
[00:00:29] Speaker C: Hello Charlotte.
[00:00:31] Speaker A: To kick off the episode, I would like one word from each of you to just round up the whole of the year. I know that's quite difficult, one word for the whole year. But I will start. My word is going to be uncertainty. It's a bit of a cop out.
It's very, very general. But literally anyone that I've spoken to this year has given me that insight and then said, but I can't really say for sure because it's all very uncertain and I've heard it so many.
I was looking back through our coverage to kind of prepare for this episode and I looked back to January and one of the articles we did in January was people kind of questioning when the sewers would open. And I was like 12 months ago, were we talking about that 12 months ago? And it has been in question for the whole of the year. Obviously there was kind of ceasefires and then they fell through. No one really knew what was happening with the return to the Zooz Canal. And then on top of that there was tariffs that were difficult enough to contend with anyway. I mean, like the 154% tariff from the US on China at one point is like so difficult. But no one could even prepare and plan for them or edit their supply chains because they thought it was going to be revoked the next day. So yeah, uncertainty is definitely my word of the year. Alex, I'm coming to you next. What is your one word for 2025?
[00:01:48] Speaker C: I'm going to hyphenate my words so that it's one word but better than expected, I think, and this is from an air cargo perspective rather than market wide, but I think airlines had a better year than they thought they would and that everyone kind of thought they would at the beginning. And given the amount of stuff that happened, I think they've done pretty well.
[00:02:08] Speaker A: And Gav, what about you? What's your one word?
[00:02:11] Speaker B: Yeah, it's also a compound noun, firefighting, both physically and metaphysically.
[00:02:17] Speaker A: You're not going to expand just. Okay. I'm sure we will get into it later on in the episode.
[00:02:23] Speaker B: Absolutely.
[00:02:25] Speaker A: Okay, so now we have all given our one word of the year. I want to get into this in a bit more detail and explore some general topics or themes that you think have shaped many of your stories this year. I think mine has to be tariffs. It's very, very obvious. But also the kind of China plus one strategies that have come from that. And that's something that we have been looking at for a few years now. But I think that this year it's very much been expedited. I think every single business is employing some sort of China plus one strategy if they not before. I think also overcapacity has to be one of my big themes of the year. I think that's quite a few stories we've done on overcapacity and I've got some figures here. The new build order book is a new record this year. It's 4.84 million TEUs contracted and that has surpassed last year's order book by almost 100,000 TEU. And I think it is going to be very interesting to see how carriers manage this overcapacity next year.
Alex, I'm coming to you next. What were your topics or themes for the year?
[00:03:29] Speaker C: I think for the third year in a row I'm going to go with E Commerce, which I mean just keeps having an interesting year. And this year, as we all know, has been no exception. That also kind of includes trade diversification, which is we all know has been huge this year. And I'm going to add the AI boom, both in terms of corporate changes as companies introduce AI and also in terms of the actual trade vertical of AI servers, which has become air cargo's new favorite thing. So those are my topics.
[00:04:01] Speaker A: Yeah, the continued conversation around E Commerce is one that we've been having for a very long time. So that is a good choice. Gav, what about you? What are your topics?
[00:04:10] Speaker B: So I mean obviously tariffs, you can't really talk about 2025 without mentioning tariffs, but that's all I'm going to do. Just mention it there. That's done. Shift in trade flows I think has been very, very interesting to watch this year and that's been supported by new Infrast Touch. We've looked at the stories in West Africa, in Morocco, Costco built a new opened a brand new port in Peru and all of these are having quite an interesting impact on how there's been a shift in trade flows away from the U.S. this ties back to tariffs again and always comes after that.
Yeah, it does, unfortunately. It does, it does. And lastly, there's been a sort of renewed focus on schedule reliability from carriers to customers, and the reliability of liner services in terms of their on timeness has improved. It's something that they're talking to customers about. If you went back a few years before, it was completely absent from conversations, so that would be another topic.
[00:05:12] Speaker C: Yeah.
[00:05:12] Speaker A: And there's a really stark contrast at the moment between the Gemini and the Premier alliance, so I think it's going to be interesting to see if that has an impact on contracting at all.
[00:05:21] Speaker B: You can talk about that later, Charlotte. Yeah, that's a good one.
[00:05:24] Speaker A: I look forward to it.
Now, having rounded up the major themes from this year, I want to get in to the good, the bad and the ugly of 2025. And that is one thing that has been good or beneficial to trade this year, one thing that has been bad. There are probably quite a few, and one thing that has just been downright ugly. So I'm going to start with my bad, and that has to be. I think you've already mentioned it, Gav, with your firefighting, but the pretty much routine ship fires that we've been seeing, I think we calculated, it's like 14 days if you average it out. And the number of ship fires has actually improved since last year. But then last year there was 250 ship fires and that was up 20% from 2023. So, yeah, I think it goes without saying that this has been pretty bad. Gav, what is your bad for 2025?
[00:06:15] Speaker B: Hate these questions, Charlotte. Can I just say that, put that on the record?
Bad.
[00:06:21] Speaker C: Yeah.
[00:06:22] Speaker B: There's an easy one actually here. It's the failure of the IMO Net zero framework to be passed in October. I think that was an absolute disgrace, that, that. And I, you know, I look at my own kids and I look at the industry and they've just decided to carry on pumping this lot of, you know, the greenhouse gases and stuff into the air. Yeah, that's the bad for me. That was shocking.
[00:06:47] Speaker A: Yeah. Complete agreement here from me and Alex. What is your bad for the year?
[00:06:52] Speaker C: Predictability, I think, was bad, which is another way of sort of saying uncertainty, I suppose. Margin pressure for forwarders, I think, was. Was not as good as they'd hoped and obviously can't not mention it. The UPS Flight 2976 with fatalities and the Emirates Runway excursion, actually, but the UPS flight and then the grounding of the MD11s, obviously bad for everyone.
[00:07:16] Speaker A: Definitely. I've just. I'VE just realized I've done this out of order. So we'll move on to the good now and talk about something a little more positive.
But my good for this year has to be. Well, I don't know. I struggled a bit with this. I was looking back through my articles and trying to find like a positive theme throughout, something that perhaps I wrote about a few times that was positive. And I ended up going with South Africa this year, just South Africa in general. But no, I think they made some good progress this year. I think my coverage of South Africa in 2024 was a lot of people complaining that the logistics infrastructure was not up to scratch. And this year I think they've made some good steps to, to kind of change this. I spoke to someone from the South African association of Freight Forwarders and they said that there's been better equipment handling this year and there's also been more collaboration with Transnet and with the carriers. So that's something that I think is largely positive. Also, they opened up their requests to privatize the rail, which I think will be very good. I think it's going to be a very slow progress but, you know, any progress is good. So that would be mine. Gav, what is your good for the year?
[00:08:25] Speaker B: Yeah, I mean, just. You're right on transnet. By the way, the reform of Transnet is going to be one a pivotal thing next year. And just in the last few days, ICTSI signed the formal concession agreement for Durban's peer too, which is the most important term in the country. So yeah, definitely it's one Good for me was like the ambition in, in the M and A activity this year. I mean it's been a, it's been a strange year for M and A. But you know, if you look at. We've had the biggest come through. You know, there's been obviously DSV Schemke, but then also MSC closed its acquisition of HHLA and then in the first quarter of the year announced its intention to buy Hutchison's international port portfolio, which would be by far the biggest deal that the industry's ever seen. So the, you know, the, the, the, the, the, the growth in the ambition of what some of the companies are trying to achieve now, I think, I think it has to be a good thing for sure.
[00:09:23] Speaker A: And Alex, what is your good for the year?
[00:09:25] Speaker C: Well, it's slightly related to my word for the year or three words for the year. When I was at the TIAPA event in Abu Dhabi, I was really surprised actually by how Buoyant everyone was. Although it was a really difficult year and everyone had to change lanes and look for new markets and so forth. Actually, the volumes were quite resilient.
Air cargo managed to. Even if the E commerce stopped, general cargo started.
So I think actually it was a sort of surprisingly good year for airlines. Now, Gav just mentioned and we probably have to say that everything that's good for some people is bad for other people. Dsv, I'm sure, is delighted with their Schenker purchase, but for me that was a less good thing because I missed Schenke.
[00:10:09] Speaker A: Yeah, they were a good company and they had a good PR team that we had a lot of good conversations with. So, yes, they will be missed. And onto something that was just downright ugly this year. Year now. Gav, you actually stole mine with your bad. But I did say that the IMO's decision. Well, it wasn't the IMO's decision, but the decision to delay the IMO's net zero framework by a year. I think that the year schedule is going to give a lot of people like no one's going to stop the sustainability journey, but I think it's just going to see a lot of regional regulations. I think that's what's kind of been spoken about a lot. We've had quite a lot of coverage on that and I think that's going to be very, very messy for people to try and navigate all the different regulations that are going to pop up around the place. So, yeah, that's going to be something interesting to revisit in a year's time when they come back to decide on the Net Zero framework, to see what's happened between now and then. I think that's going to be very, very messy. Gav, what is your ugly for the year?
[00:11:05] Speaker B: It's Trump's trade war. It's just ugly the way it's been carried out. The levies, the reasoning behind some of the tariffs, frankly, is preposterous. I mean, if you look at the 50 on Brazil was entirely about Bolsonaro's court case. It's just ridiculous. And it's.
[00:11:23] Speaker C: And it's.
[00:11:24] Speaker B: And it comes with. I mean, actually, if I could, I'd just like to quote from a very venerable Maritime economist, John McCown, who's based in New York, who in his regular commentaries has said, in the last few ones I've read has repeated this quote. It's a really lovely quote. He says, you know, the more I look at this administration's strategy towards trade, the more I think it's just a fundamental attack on the whole concept of trade itself.
I don't want to go political. Right. Because it's not my place to. But it, it sort of defy. A lot of. It defies logic, a lot of it sort of. It's. There just seems to be so much mendacity attached to it. You know, the. When you look at the comments coming out of the administration that, for example, that they're getting these countries pay these tariffs and everyone in our industry, everyone who's presumably watching this, knows that that's not how tariffs work. They know that it's paid by the importer from the exporter. I mean, the exporter might have to shoulder some of the costs, but ultimately it's all being put on the shoulders of the American consumers and it's just ugly, ugly, ugly, ugly. Big.
[00:12:30] Speaker A: Yeah. The motivations, the motivations for tariffs did seem to get a bit confused as they went on. I mean, at the start it was. They said that it was to kind of correct trade deficits. And then at the end it look like tariffs were just kind of being used as a tool for, for anything. Alex, what is your ugly for the year?
[00:12:47] Speaker C: It's slightly related to what Gav said in that I think the whiplash forced on customs brokers in particular has been ugly. And I feel for them it must have been a very difficult year. But there's also some corporate actions that haven't been pretty. Let's put it like that.
There's a lot of disaffection around the changes happening at cunanagel. You know, can you really cut yourself to greatness? It was a very proud culture there. I'm not sure that's been retained, so that's sad. On the upside, I don't think anyone's been fired over Twitter this year, so we've got that to grasp. And I think maybe for those cargo wise customers that saw the changes over their Thanksgiving turkeys, that must have been an ugly moment for them too. I know these things are just business, but this business is all about people and they need to be treated properly. That's my ugly.
[00:13:38] Speaker A: Yeah, definitely. And to your whiplash point, I'd like to add a whiplash to journalists on that as well because trying to keep up with all of the changes this year has been a nightmare and very ugly indeed. Now, from all of these external factors that we've spoken about, who have been the winners and losers of this year? Gav, who do you think is the biggest winner of 2025? Who has come out on top.
[00:14:00] Speaker B: I'm gonna. I'm. I'm gonna put. I've got three candidates. No, yeah, I've got three candidates. I'm gonna. For real winners in the shipping circle, it's msc. It's clearly msc, the way that they've built up the fleet. I've talked previously about the port investments that they've got underway and these sort of add to previous investments made in 2024. You know, the creation of a really European overland network that supports the world's biggest shipping line. MSC has had an absolute cracking year and they should be very proud of what they managed to achieve.
My second winner is China Inc. As I think we talked a little bit in the last podcast about this. You know, basically they faced down the trade war. Their exports have continued growing. They found new markets for their goods despite having the world's largest consumer market severely restricted to them. So I think, I mean, that has been a resounding success and I'm going to give a bronze medal to the Gemini Corporation for, you know, doing something radical in line of shipping. I mean, you can argue about how radical it is, but the fact that they've gone on the front foot with it, that they've gone, they've been open about the use of transshipments and that it has been used to, to. To improve their schedule reliability with very high targets, you know, 90% online on time arrival targets, hasn't been hit by many lines at any point for the last few years. So. So bronze medal, highly recommended, you know, high commendation to the Gemini Corporation.
[00:15:35] Speaker A: Yeah, I definitely think they deserve that. I think when they announced their aim to get the 90% schedule reliability, no one really thought that it would actually happen.
[00:15:43] Speaker B: Lot of skepticism.
[00:15:44] Speaker A: Managed it.
[00:15:45] Speaker B: Yeah.
[00:15:47] Speaker A: Big bronze medal to them. And Alex, who are your winners of 2025?
[00:15:52] Speaker C: I would say any carrier with flexible fleets and flexible management.
People like atlasair, for example, anyone who adapted quickly to the new environment, really. That includes those Chinese e commerce players who I think are probably the real winners of the year. They've done really well to change where they're selling their stuff.
[00:16:13] Speaker A: Definitely. And for my winners of the year, I've got written down customs brokers. And while I'm sure it's probably been a very stressful year, you've got to imagine that business has probably never been better for them. So probably if you're struggling with business and I would say become a customs broker because they've probably got a lot of demand right now. Now let's move on to the losers of the year. Gav, who are your losers of 2025?
[00:16:37] Speaker B: For me, and this might be slightly controversial, is the big three pls on the ocean for the ocean freight departments of the multinational 3pls slightly controversial? Because obviously DSV might argue against that and we've obviously, you know, talked about them before. Nevertheless, if you look at. I think we've talked about this before as well. But if you look at the container carryings of the big of the ocean freight departments of the big three pls and you compare that to the growth that we've seen in actual containers being carried globally, it's very clear that the big three PLs are losing market share. And this goes back to the rise of China Inc. I think. Nice little Rhine to end up on.
That's it.
[00:17:20] Speaker A: And Alex, who are your losers of the year?
[00:17:23] Speaker C: Well, it sounds mean, doesn't it, calling someone out for being a bit of a loser. But I think I'm going to do it as well. Individually, I think there's been some losers. Western Global, which has a fleet mostly of MD11s, I think has had a poor end to the year.
I'm very sorry that Flexport didn't make a profit and I think some cargo wise users may find that they didn't have a great end to the year either. But again, as I said before, any real loser is that that failed to adapt to new working environments.
[00:17:55] Speaker A: I think, I mean that is a bit of a kick in the teeth for cargo wise users. They've got. Their product has just been made more expensive and now Alex Lenane is called them a loser. That's horrible.
No, sorry to have to ask that of you. I've got my losers of the year for anyone who's been tariffed unfairly and now might have to go through the refund process. I just think that's awful that you' you know, you've been tariffed. You haven't been meant to be tariffed. It's been ruled unlawful. If it does get ruled unlawful and then you've got to do all this admin, I just. Oh yeah. I'm not envious of anyone who is in that position right now.
And now for a bit of fun in the episode. Alex, I want to ask you if you could choose one song to round up the vibe of the year. What song would that be?
[00:18:39] Speaker C: It's got to be Oasis. Roll with it.
No other option.
[00:18:43] Speaker A: You gotta roll with it. You gotta take it somewhere.
That's a good choice and a good song too. Gav, what is your song of the year.
[00:18:53] Speaker B: Mine is Big time nothing by St. Vincent.
[00:18:58] Speaker A: Big time Nothing.
[00:19:03] Speaker B: Which I'm using as a. Well, I mean, it's a fracking tune with a thunderous bass line, but it's just it for me. It represents all the toing and froing of the tariffs and rates and earn this and that. And no, now, that's not a problem. Oh, it is a problem. Oh, no, it's not a problem. Oh, let's go through Sears. Oh, no, we're not going through Sears. You know, it's just the guff. The guff.
[00:19:24] Speaker A: That is a good choice. And mine is quite similar. I've got. What do you mean by Justin Bieber?
What do you mean?
And that is. Because that's been my response to quite a lot of the things I've read this year. I have a specific memory of when the US first changed their de minimis rules. And there was two different things, one for postal shipments and one for general cargo. And I had. I just. I was reading. I was like, what? What do you mean? And then I asked Glynn Hughes from Tiaka and Neil Vanderwaal from Zenita, who are arguably the two most knowledgeable people in the airfreight industry, and they both had different ideas of what it meant. And also, just reading through all the different tariff codes and all the different customs regulations, I just didn't really have much clue what it meant. So that is my. That's my song of the year.
[00:20:07] Speaker B: Do you. Do you have. Are you. Have you been further illuminated over the past 12 months?
[00:20:13] Speaker A: No comment.
I mean, to be honest, there's no. There's no. There's no point getting to grips with it because it changes the next day. So I'm just. I'm just living in. In blissful ignorance.
[00:20:23] Speaker B: Big time nothing.
[00:20:25] Speaker A: And finally, to end off the episode, after all the talk of uncertainty and unpredictability that has been in 2025, I'm gonna ask you for your predictions of 2026. So, Alex, do you have any idea of what comes next?
[00:20:39] Speaker C: I kind of wish I did, because that would be a surefire bet, but of course I don't. No one does. But I'm going to say I think air freight is going to be softer than next year. I think this year was a little bit lucky, maybe, but broadly speaking, more of the same. Air freight, obviously, as we all know it, benefits when things go wrong. Do I think something's going to go wrong next year? Yes, I do. I don't know what it is, but I'm sure, something will. So air freight always gets a little win when it goes badly for everyone else. But I think broadly speaking, it's going to be a softer market. And I also worry about forwarders for next year. I think they might be losing their, the larger forwarders might be losing their edge a little bit. So I worry about that because that normally means redundancies. But yeah, those are most of my sort of very guesstimate predictions.
[00:21:25] Speaker A: And Gav, what about you? I know you like making bold, outlandish claims. So what are your predictions for 2026?
[00:21:32] Speaker B: The Crystal Ball's shattered, but I think based on what we saw in 2025, I think we're going to continue seeing a, a shift in the calendar of peak seasons. There was no real summer peak season on the Asia Europe trades this year in the, in the normal traditional summer ones months, but we had one earlier weird, sort of weird April, May, earlier bump. And actually as I'm working on at the moment, we seem to be in the middle of a peak season in late December. So peak seasons will continue to shift around. And that's part, I mean, that ship has obviously reacting to the new realities of the globe of supply chains, continued continued strong growth in the global south, you know, China to Africa, China to Latin America to enter India, of course, developing countries where there are a lot of belt and road projects going on. So there's a lot of equipment going into those places for infrastructure projects. And, and related to that, I think we'll see a, the, the continued emergence of, of what we're sort of notionally calling, to borrow Lars Jensen's phrase, the Indian Ocean trade. And then our very specific thing, and this is my prediction, which could fall flat on its face. But I think it's just written in the stars. I think that in 2026 we will see MSC buying Felixstowe, even if it doesn't manage to acquire the rest of the Hutchison portfolio.
I think that a deal would be done over Felixstowe. Just the concentration of their business there just seems to demand it for me.
[00:23:09] Speaker A: Well, it was a very, It's a very hard thing to do to predict what's going to happen in 2026, but you've both done a very good job. I found this quite challenging because, I mean, I've only been in logistics for like two years, so it's quite hard to predict. I've gone with quite an obvious one that I think that port congestion is going to be a massive thing next year. I think also subsequently the ports are going to have to do something. I mean, to increase port capability, it takes a long time. So I think they're going to have to place more of an emphasis on technology and automation, which I think might spur some sort of backlash from the ila. So I think we're going to hear a lot more from Harold Daggett next year, perhaps, which I hope we do. I quite like watching his videos on YouTube, so perhaps. Look forward to that.
[00:23:53] Speaker B: Yeah, they're great, aren't they? I mean, sorry, just what we were talking about earlier.
If you look at the Premier alliance has just published its 2026 schedule network for all of its east west services.
And I've been going through it today. It's really interesting if you look at the. Because they, as you mentioned before, Charlotte, have been one of the worst affected by port congestion in Europe and there's been a lot of shippers and forwarders who've been concerned about the service reliability of some of the Premier alliance strings.
And if you look at their revised schedule for next year, it looks more and more like a sort of Gemini type product. The port stream has considerably slimmed down in terms of number of port calls, more emphasis on hubs. And if you look at those hubs, they do tend to be. There tends to be a terminal there controlled by one of the Premier alliance carriers. So with the port congestion thing, you're absolutely spot on that. It's. There's. In many ways there's not a great deal ports can do. Yeah, don't worry, Gold stars. There's not much the carriers. Sorry, there's not much the ports can do in the short term. So actually it's going to be. If carriers want to avoid port congestion, a lot of that is going to be down to them and how they schedule the services, manage the ships and particularly for. We haven't. What we haven't mentioned, none of us has said predicted where the sewers will open again next year. I mean, on balance.
No, I know, I know, but it's probably more likely next year than it. Than it was in 2025, which is no kind of measure at all. But if it does open, there's going to be massive port congestion in Europe and I think the onus on managing that congestion necessarily falls to the carriers rather than the ports themselves will do whatever they can, but it will be how the carriers run those ships, at what speeds they run it, how they schedule specific ports, that will be the chief way to tackle the imminent congestion. Sorry, Tuppence to you then.
[00:25:57] Speaker A: I mean, and do you think they're all going to talk to each other and manage it in an orderly fashion. Or do you think it's just going to be a race through the sewers for all the carriers Now, Val, I.
[00:26:05] Speaker B: Wouldn'T like to predict.
No.
[00:26:08] Speaker A: To be seen. To be seen. Well, thank you both so much for all your help rounding up 2025. Quite a difficult job. I mean, lots and lots has happened. But I do really appreciate your help and unfortunately this be the last news in brief podcast of the year. We're going to take some well deserved rest over the Christmas break, but we'll be back for the first week of January to round up everything that's happened over Christmas.
Thank you so much for joining me. And if you're not watching this podcast then please head over to our YouTube channel hello to watch it in real time. Thank you very much to my guests this episode, Alex Linnane and Gavin Van Maal. It's been lovely to speak to you.
[00:26:50] Speaker C: Thanks Charlotte.
[00:26:51] Speaker B: Thank you very much.
[00:26:52] Speaker A: Thank you all so much for watching. Have a very happy Christmas and a happy New Year.
