In 2023, solar power generated 413 gigawatts of energy, far surpassing all previous solar production records. This figure will only increase in 2024 as this market grows to become the dominant energy infrastructure on the planet.

This is evidenced by several facts: firstly, solar and wind now produce energy at a lower cost than new coal and gas plants; secondly, G20 countries account for almost 90% of the world’s renewable energy capacity; thirdly, in 2023, solar panel prices fell by 50% compared to the previous year; and finally, fourthly, in 2023, factories produced three times as many solar panels as in 2021.

According to publicly available data – provided since 2000 – solar capacity has increased by an average of 37% per year over the last 22 years, doubling every 2.2 years. In 2023 we reached 413 gigawatts, and if this trend continues, we could reach 565 GW in 2024. At this rate of growth, we will reach the second terawatt of solar installations in the world in 2024. To put this in perspective, the first terawatt in the world was achieved in 40 years.

On the ground, this means that we can expect to see many more solar panels, both on solar farms and on new-build housing and other infrastructure. This will be most evident in China, which was responsible for 240 gigawatts last year.

US and UK elections may also affect the industry

Changes in the political situation at global and national level can have a significant impact on green policies, affecting the near and distant future of solar energy. Both the UK and the US will hold national elections in 2024, which could lead to the election of a new President and Prime Minister in both countries. In the UK, a new Labour government is likely, which could lead to a shift towards greener policies.

While the current Conservative government has set a number of ambitious targets and initiatives, such as the commitment to zero emissions by 2050, it has also postponed its policy of phasing out petrol and diesel cars by five years. A Labour government could further promote green development, including in the field of solar energy.

US President Biden will face former President Donald Trump for the White House. As President, Trump favoured economic growth and energy independence over green initiatives, often favouring fossil fuels.

In particular, in 2018, Trump introduced tariffs on imported solar panels, set at 30%. This increased the cost of solar projects in the US and hampered the growth of the solar market.

If Trump wins the 2024 elections, we could see the US abandoning solar energy and focusing more on fossil fuels. This could have a significant impact on the cost of solar installations, which could fall on current trends, but could rise under Trump.

Solar energy storage capacity will increase

One of the main limitations of solar energy is that it depends on environmental factors that make it intermittent. It is also much more difficult to store than coal, gas or oil.

To address this problem, the renewable energy industry is developing better methods for storing and releasing energy when it is produced at peak capacity. The most obvious example of this technology is lithium-ion batteries. They are widely used for their high energy density and long lifetime, but other batteries are also entering the market.

We can expect this technology to continue to develop in 2024, increasing capacity and efficiency, and continuing the downward trend in prices that we saw in 2023.

Author: Rolands Petersons, logistics expert

Europe, with its strong environmental awareness and ambitious commitment to reducing carbon emissions, is at the forefront of the transition to electro-mobility. This transition is underpinned by the exponential growth of the EV market, which promises to change the automotive industry and consumer mobility habits.

However, the success of this green revolution depends to a large extent on the charging infrastructure. Among the available solutions, fast charging is becoming a decisive factor in promoting the uptake of electric vehicles, offering users a convenient and efficient experience, especially on long journeys.

The market for electric vehicles in Europe is not only growing rapidly, but is also at the forefront of an industrial and environmental revolution. Thanks to favourable policies and growing environmental awareness, European consumers are increasingly turning to electric vehicles as a viable alternative to combustion cars.

Europe stands out for the rapid uptake of electric vehicles, driven by government incentives, stringent CO2 emission regulations and growing consumer interest in clean technologies. Statistics show that EV registrations are steadily increasing, with countries such as Norway, France and Germany leading the way. The expansion of the charging point network is also contributing to this trend.

Increased battery life and availability of fast charging stations for electric cars

Analysts predict that the market for electric vehicles will continue to grow rapidly over the next decade. Technological advances will reduce costs and extend battery life, making EVs more attractive to consumers and fuelling the growth of the EV market.

In addition, the commitment of car manufacturers to expand the range of electric vehicles shows that the choice and quality of vehicles available will continue to improve.

Charging infrastructure is key to the uptake of EVs. It comes in different forms, adapted to different user needs and situations. Fast charging stations are equipped with standard connectors, making them compatible with a wide range of electric vehicles. These standards ensure not only safe charging, but also communication between the vehicle and the charging point to optimise the charging process.

The main value of fast charging stations is their ability to significantly reduce the time needed to charge an electric vehicle. This is an undeniable advantage for drivers, especially on long journeys where time is a critical factor. Fast charging stations bring the EV charging experience closer to that of a traditional filling tank, making EVs more attractive for everyday use and long-distance trips.

Tools such as Electromaps remain easily accessible, allowing users to quickly find charging points, efficiently plan journeys and charge directly at thousands of charging points from different operators using a single app. This makes long-distance trips with electricity even more convenient and easier to implement.

The integration of fast charging stations poses challenges for network management, in particular in terms of energy demand. These stations require a large amount of energy in a short time, which can lead to peaks in demand. Energy suppliers and grid operators need to anticipate and manage these fluctuations in order to maintain grid stability. Solutions such as energy storage, smart charging and dynamic pricing are being explored and implemented to address these challenges.

Several case studies from across Europe illustrate the successful deployment of fast charging stations. Countries such as Norway and the Netherlands have been leaders in the deployment of this type of infrastructure. These initiatives demonstrate the commitment of national and local stakeholders to electromobility, often supported by public-private partnerships and government incentives.

EV charging challenges – high costs of setting up stations and adapting electricity grids

Energy suppliers and grid operators need to anticipate and manage these fluctuations to maintain grid stability. Solutions such as energy storage, smart charging and dynamic pricing are being explored and implemented to address these challenges.

Charging infrastructure is also currently a regulatory issue in Europe, with ambitious targets set to support the uptake of electric vehicles. The Council of the European Union and the European Parliament have reached a provisional agreement on the installation of fast charging stations. Under the agreement, charging points with a minimum capacity of 400 kilowatts must be installed every 60 kilometres on major roads. The aim of this ambitious effort is to ensure that drivers of electric cars can travel throughout Europe confident that they will find fast and affordable charging points.

While the future of fast charging stations is promising, there are challenges that need to be addressed to ensure the efficient and sustainable deployment of these technologies. Key technical challenges include adapting existing electricity grids, building a smart charging system and ensuring interoperability of charging services across Europe.  From an economic point of view, the high initial costs of installing fast charging stations and the need for viable business models that guarantee a return on investment must be taken into account.

The fast charging sector is constantly evolving as innovations in battery technologies, charging systems and business models are introduced. These innovations are essential to reduce costs and improve the efficiency of fast charging stations. The future of fast charging is promising, with forecasts showing that it will be increasingly integrated into urban and inter-urban infrastructure. Cooperation between governments, industry and consumers will be essential to create a robust and user-friendly charging ecosystem that can support the transition to sustainable mobility in Europe.

Author: Rolands Petersons, logistics expert

The global Liquefied Natural Gas (LNG) market size was USD 135420 million in 2023 and is expected to reach 205280 million by the end of 2029, growing at 5.7% between 2023 and 2029. Despite the fierce competition in the market, the global recovery is encouraging investors.

The sector continues to attract new investment, driving innovation and creating the potential for further growth. This dynamic environment encourages stakeholders to seize new opportunities and contribute to the development of the sector.

LNG industry dominated by Asia-Pacific

The main players in the global LNG market are ConocoPhillips, Qatar Petroleum, Shell, etc. The three largest producers in the world own 30%. Asia Pacific is the largest market with around 55%, followed by Europe and North America, both with more than 35%.

North America, in particular the United States of America (USA), is particularly important for the future of the LNG market and must not be neglected. Any changes in the US could have a significant impact on overall market trends. The North American market is expected to show significant growth over the forecast period. This can be attributed to the high level of adoption of advanced technologies and the presence of large players in the industry, which foster ample growth opportunities. As the sector continues to recover worldwide, it remains attractive for investment, attracting new companies and creating the conditions for further growth.

War in Ukraine boosts LNG ship production

Liquefied natural gas shipping is currently on the rise, with the construction of new LNG vessels increasing after the Russian invasion of Ukraine. For example, LNG carrier orders have reached 53.6% of the total LNG carrier fleet. While these figures are encouraging for the long-term stability of LNG shipping and LNG shipping equipment suppliers, they will also have a significant impact on the future shipbuilding availability profile. Not only have LNG tankers taken up space that is no longer available for other ship types, but this mass of LNG tanker orders is also having an impact on the value-added products that shipyards want to build.

In response to Russia’s invasion of Ukraine, the West will continue to target Russian LNG projects in 2024. The US recently imposed sanctions on Novatek’s transhipment operations and the company’s 19.8 mtpa (millions of tonnes per annum) Arctic LNG 2 project. Despite this, Russia managed to announce the launch of the first mass-produced gravity liquefaction plant in July 2023 from the Belokamenka offshore construction centre. Further sanctions are expected to be imposed in 2024.

As known, liquefied natural gas (LNG) is natural gas that has been cooled to a liquid state, around -260° Celsius, so that it can be transported and stored. The volume of natural gas in its liquid state is about 600 times less than its volume in its gaseous state. This process, developed in the 19th century, makes it possible to transport natural gas to places beyond the reach of pipelines and to use natural gas as a transport fuel.

Author: Rolands Petersons, logistics expert

The International Air Transport Association (IATA) has announced airline profitability figures for 2023 and industry forecasts for 2024. In 2024, the airline industry is expected to generate net profits of USD 25.7 billion (2.7% net profit margin). This will be a slight improvement compared to 2023, when a net profit of USD 23.3 billion (2.6% net profit margin) is expected.

In both 2023 and 2024, the return on invested capital will lag the cost of capital by 4 percentage points, as interest rates have risen globally in response to the sharp inflationary impulse. Airline operating profits are expected to reach USD 49.3 billion in 2024, compared to USD 40.7 billion in 2023. Total revenues in 2024, meanwhile, are expected to grow by 7.6% year-on-year to a record $964 billion. But spending will grow slightly less, by 6.9% to USD 914 billion.

The aviation industry is recovering fast and showing resilience

Some 4.7 billion people are expected to travel in 2024, an all-time high, surpassing the pre-pandemic level of 4.5 billion in 2019. In 2023 and 2024, freight volumes are estimated at 58 and 61 million tonnes respectively.

According to IATA Director General Willie Walsh, the expected net profit of USD 25.7 billion in 2024 is a testament to the resilience of aviation, given the large losses of recent years. People love to travel and this has helped airlines return to pre-pandemic levels of connectivity. The speed of recovery has been extraordinary, but the pandemic appears to have cost aviation around four years of growth. Forecasts suggest that we can expect more normal growth from 2024 onwards, both in passenger and cargo.

High demand for travel, combined with capacity constraints due to ongoing supply chain issues, continues to create supply and demand conditions that are conducive to yield growth. Passenger yields are forecast to increase by 1.8% in 2024 compared to 2023. Reflecting the tight supply and demand conditions, efficiency levels are high and load factors are expected to be 82.6% in 2024, slightly better than in 2023 (82%) and the same as in 2019.

Freight revenues are expected to fall to USD 111 billion in 2024. This is a sharp drop from the extraordinary peak of USD 210 billion reached in 2021, but it is higher than 2019 revenues of USD 101 billion. The price of fuel in 2024 is expected to average US$113.8 per barrel (jet fuel), meaning a total fuel bill of US$281 billion, accounting for 31% of all operating costs. Airlines are expected to consume 99 billion gallons of fuel in 2024.

Despite inflationary pressures, airlines have been relatively good at controlling non-fuel costs. As the industry recovers from the pandemic, fixed costs are spread over a wider range of activities, non-fuel unit costs are falling back to pre-pandemic levels. We expect non-fuel unit costs to be 39.2 cents per available tonne-kilometre (ATK) in 2024, 1.6% above the 2023 level and in line with the 2019 level. Total non-fuel costs are expected to reach USD 633 billion in 2024.

Air transport can be affected by various risks

At the same time, the profitability of the sector is volatile and can be affected (positively or negatively) by many factors. Firstly, the development of the world economy – falling inflation, low unemployment and strong demand for travel are positive factors. However, economic tensions can arise. In China, for example, slow growth, high youth unemployment and disorderly property markets, if not properly managed, could affect global business cycles. Similarly, if the tolerance for high interest rates weakens and unemployment rises significantly, the strong consumer demand that has fuelled the recovery could weaken.

Second, war – the operational impact of the Ukraine war and the Israel-Hamas war was largely limited to changes in flight routes due to airspace closures. On the cost side, the conflicts have pushed up oil prices, affecting airlines worldwide. An unexpected peace in either or both cases would benefit the industry, but any escalation could create a radically different global economic scenario against which aviation would not be immune.

Third, supply chains – supply chain problems continue to affect global trade and business. Airlines have been directly affected by unforeseen maintenance problems on some aircraft/engine types, as well as delays in the delivery of aircraft parts and aircraft, which limit capacity expansion and fleet renewal.

Fourth, regulatory risk: on the regulatory front, airlines may face increased compliance costs and additional costs related to passenger rights regimes, regional environmental initiatives and accessibility requirements.

Author: Rolands Petersons, logistics expert

The global cruise market was valued at USD 7.67 billion in 2022 and is expected to grow at an annual growth rate of 11.5% between 2023 and 2030. This can be attributed to the increasing popularity of cruise holidays due to the cost differential and the convenience offered by alternative holidays. Cruise holidays are more affordable compared to alternative land-based holidays, which include transport, meals, accommodation and entertainment. According to the Cruise Lines International Association, 58.0% of international holidaymakers are first-time cruisers and are likely to cruise in the coming years.

The COVID-19 pandemic has led to a decline in passenger numbers in the market. According to the International Cruise Lines International Association, global passenger numbers fell by 80.0% in 2020. The COVID-19 pandemic outbreak led to the suspension of most cruises in various locations, while other cruises were cancelled. However, the industry is expected to recover as operations will resume and restrictions will be eased. Following the pandemic, many holidaymakers are looking for a short break to relax.

A holiday trip of several days organized on board a cruise ship on large inland waters or at sea, visiting different tourist destinations following a fixed itinerary, is known as a cruise. The main focus of this type of cruise is on the on-board accommodation as well as on destinations attractive to tourists. The growing hospitality and tourism industry is fueling the growth of the market, thereby contributing to the growth of the global cruise market.

Ocean cruises dominate, but river cruises are also becoming popular

The market growth over the forecast period is driven by the increasing number of Gen Z leisure trips and travel, and the growing share of the population preferring luxury living. The rise in popularity of river cruises is likely to fuel the growth of the global cruise industry. River cruises offer attractive travel packages that travel not only within coastal areas but also within countries. River cruises of this kind are becoming increasingly popular in European countries.

Nowadays, ships offer innovations and many exciting, extra fun activities and themed cruises for travelers, such as yoga themes, kids themes, mystery themes and more. Such innovations are gaining great popularity among the target audience and attracting different demographic groups, thus contributing to the development of the cruise market. However, the small number of companies involved in the production of such cruises and the high cost of production are expected to restrain the growth of the market during the forecast period.

In the ocean cruise segment, its revenue share exceeded 80.0% in 2022. The majority of the market revenue share is accounted for by strong players offering services in the ocean cruise segment for intercontinental voyages in large numbers. In addition, a large customer base prefers ocean cruises to other cruises due to their exciting packages, amenities and entertainment. These activities can be carried out on large ocean cruise ships, which provide spacious areas compared to others.

The river cruise segment is expected to experience the fastest growth rate, registering a CAGR of 13.6% between 2023 and 2030. The increase in popularity of river cruises among holidaymakers is associated with the highest CAGR. Unlike ocean cruises, which are docked in the coastal region due to their very large size, river cruises travel along rivers, offering more inland destinations and attractions. River cruises are becoming popular in European countries, sailing across different countries. For example, the Danube river offers cruises through 10 European countries.

North America dominates, but Asia and Europe will also grow

North America accounted for around 50.0% of revenues and dominated the market in 2022. The region’s dominance in the global market is mainly due to the strong presence of key international players and the most developed industry. Higher disposable incomes, consumer spending and a developed tourism industry are the factors driving the higher market revenue share.

Asia and the Pacific is expected to be the fastest growing region over the forecast period. The region is likely to register a CAGR of 12.5% between 2023 and 2030. In recent years, the cruise industry has been moving from North America and Europe to the Asia-Pacific region. The cruise industry is booming in the Asia-Pacific region thanks to government initiatives to develop the tourism industry to increase economic output. For example, on 19 August 2020, the Government of India announced that it will reduce 70.0% of berth fees to promote cruise tourism.

Europe was the second largest in terms of revenue share, with a share of around 25% in 2022. It is expected to grow at a significant CAGR over the forecast period. The growth of the market is attributed to the increase in demand for sustainable tourism. This growing demand is making local communities more attractive to small and medium sized tour operators, thereby fueling market growth.

In 2022, the yacht market was valued at USD 11.19 billion and is expected to grow to USD 17.48 billion in 2029. The yacht market is expected to grow at a CAGR of 6.58% during the forecast period.

The popularity of yachting is only increasing

The increase in the number of private islands on cruise routes, rising disposable incomes worldwide, the use of alternative energy sources and the rise in the number of wealthy individuals are factors contributing to the growth of the yacht charter market. The ease with which a yacht can be chartered has increased the appeal of yacht holidays among young people who want to celebrate important occasions in style, thus contributing to the growth of the market.

People around the world increasingly prefer relaxation, sporting activities and luxury experiences. Yacht fleet operators rent luxury yachts for corporate meetings, leisure events and special occasions. The use of advanced construction materials such as fibreglass, as well as the creation of customised solutions based on individual requirements and design, are driving the growth of the market. Other factors such as increasing consumer spending power and the use of alternative fuels in the marine industry are expected to drive the market over the forecast period.

Simple online booking of yachts for weekly or monthly trips will create market growth opportunities. Seeing the potential of the market, many related companies such as yacht management are also entering the market, supporting the construction of new yachts and providing new opportunities for market growth. The increase in boating related accidents and fatalities is one of the main factors causing problems in the yacht market. In order to reduce accidents, manufacturers are increasingly introducing safety measures and installing safety equipment on board.

Sport yachts are expected to become the fastest growing segment of the market. The growth of this segment could be attributed to the increasing demand for sports yachts in countries such as China and France. In these countries, adults actively participate in recreational boating activities and sporting events. Nautical tourism, sports tournaments and other leisure activities such as cruising, fishing and other water sports activities are carried out on sports boats.

The most sought-after yachts are 20 to 50 feet in length

The rapid growth can be attributed to factors such as the availability of options that include wind sailing, which helps to save fuel and allows movement in favourable wind directions. In addition, the low maintenance, the low draught that allows anchoring in the water and the lower mooring costs make this vessel the preferred choice among end-users. Yachts of less than 20 feet and between 20 feet and 50 feet can be used for both recreational and personal purposes. The under 20 feet segment is expected to be second only to the 20-50 feet segment in terms of both annual growth and market share in the coming years. The growth of the sub-20-foot segment is due to the fact that they are readily available at affordable prices and have low maintenance requirements. Also, the growing trend of developed economies in the Europe and North America region to use renewable energy sources such as wind power and solar power in offshore vessels is likely to significantly boost the demand for sub-20 foot yachts, as sub-20 foot yachts require less energy to power their engines.

Chartering with crew is most often used

Based on contract type, charter with crew dominates the market. Since the yacht’s customer and crew are essential elements in making a vacation a good vacation that will be talked about forever, this contributes to the growth of the global yachting market. Increasing popularity of booking yachts for corporate and anniversary parties is expected to boost demand over the forecast period. Shifting marine tourism and travel patterns have also contributed to the demand for crew. In addition, crew on board yachts is also required for maintenance, such as engine lubrication and other system checks to ensure smooth operation of the ship’s systems. In addition, high-income earners are incorporating more travel routes in shorter periods of time. A strong desire to spend quality time on short holidays in exceptional and remarkable accommodation has increased the use of crewed yachts over the years.

The most popular choice of yacht is motor yacht

The popularity of motor yachts is due to their high power and ability to develop higher speeds, thus covering longer distances in less time. In addition, motor yachts can navigate in shallow water conditions, offering guests the opportunity to sail almost any archipelago or coastline, whether the passage is narrow or the water is shallow. The significant growth in luxury marine tourism in the recent past is also expected to fuel the growth of this segment over the forecast period. High demand for motor yachts for personal and leisure activities across the globe, especially in the Mediterranean region, has fuelled the growth of the global yacht market. Factors such as increasing demand for recreational activities, tournaments, and product sales due to the growing love for outdoor recreational activities contributed to the growth of the global yacht market during the forecast period.

For reference:

A yacht is a sailing or motor vessel used for pleasure, cruising or racing. The Commercial Yacht Code classifies yachts 79 feet (24 m) and longer as large. Such yachts usually require a paid crew and have higher construction standards. Large yachts are also classified as follows: commercial – carrying up to 12 passengers, private – for owner and guest entertainment only, or by flag – the flag of the country under which it is registered.

Superyachts (sometimes also megayachts) are usually any yacht (sailing or motor yacht) longer than 40 m (131 ft). Racing yachts are designed to focus on performance rather than comfort. Charter yachts are run as a profit-making enterprise. In 2020, there were more than 15 000 yachts of sufficient size to require a professional crew.

Author: Rolands Petersons, logistics expert

The price of European natural gas is forecast to more than double by 2024 as a result of shortages caused by falling Russian exports. It should be noted that higher storage capacities as well as the not so expected warm winter have already contributed to the sharp drop in European gas prices in recent months.

The European benchmark contract, which is the Dutch Title Transfer Facility gas futures contracts, traded at USD 55.81 per MWh. Futures contracts had already reached a record high of around €343 per MWh in August 2022.

Europe, already hard hit by the disruption of gas supplies from Russia due to the conflict, has somehow managed to survive the cold season without a significant drop in supply. However, the structural deficit in Europe’s natural gas balance has not yet been eliminated and is serving to increase the risk of higher gas prices in the region, according to a major US bank.

The Investment Bank believes that there is no sustainable solution to Europe’s energy crisis before 2025. That is when the next wave of global LNG supply projects, currently under construction, will come on stream.

The International Energy Agency’s 2022 report estimates that the EU could face a shortfall of around 27 bcm of gas in 2023 if Russian supplies fall to zero and Chinese LNG imports return to 2021 levels.

Apparently, European countries have already signed several LNG import contracts with the US and Gulf countries in recent months. Only recently, the UAE and Germany announced the delivery of the first LNG cargo from the UAE to Germany. In recent months, European countries have concluded several LNG import contracts with the US and the Gulf countries.

Last November, QatarEnergy concluded several sale and purchase agreements to supply Germany with 2 million tonnes per year. The second largest US LNG exporter also announced that federal regulators have given their approval for partial commercial operations.
The start-up of the plant, which is capable of processing almost 2.1 billion cubic feet of natural gas per day and also exporting 15 million tonnes of LNG per year, is expected to boost gas prices on the domestic market.

According to global research and consultancy group WoodMac, the reopening of the plant will make the US the largest exporter of LNG in 2023, overtaking Qatar and Australia. According to WoodMac’s head of gas and LNG asset research, the need for energy as well as record high prices last year prompted buyers, including US producers, infrastructure companies and portfolio players, to seek long-term contracts to supply US LNG.

Author: Rolands Petersons, logistics expert

The wind energy industry is currently struggling with the effects of the global pandemic, rising energy costs, cyclical raw material unavailability and high inflation, but is not losing its strength.

Looking at industry forecasts, Grand View Research points out that the global wind energy market was valued at USD 99.28 billion in 2021 and is expected to expand at an annual growth rate of 6.5% until 2030. This confirms that both onshore and offshore wind have huge potential for future growth.

Looking at the data, the problem seems to be that what is normal today was not normal two years ago in an industry characterized by constant change, rapid innovation and unpredictable policies. Despite the downturn in Europe, global wind power generation is set to grow by almost 273 terawatt hours (TWh) (17%) in 2021, more than any other electricity generation technology.

China was the biggest contributor, accounting for almost 70% of the growth in wind power generation in 2021, followed by the US with 14% (where more than 120,000 jobs were created in 2022) and Brazil with 7%, according to the International Energy Agency (IEA). With such growth and new challenges to address, the availability, production, distribution and, most importantly, transport of wind turbines and other parts are becoming increasingly important.

Wind turbines, due to their large size, are considered as special cargo, defined by the International Air Transport Association (IATA) as cargo that, due to its nature, weight, size and/or value, may have special requirements, including packaging, labelling, documentation and movement through the transport chain. This status is linked to the need for a specific type of logistics, as not everyone can transport this type of cargo. Thus, transport must be carried out with an unusual and helpful logistics partner who can move parts that would not normally fit in a standard container. The worldwide transport of wind energy requires a reliable, integrated logistics partner that can deliver the required power when it is needed, at limited cost, with flexibility and a strong focus on safety. But with all these changes, what can wind energy companies expect in their industry and logistics?

Offshore wind farms in the spotlight

In 2021, the IEA reported that of the total 830 GW of installed wind capacity, 93% was onshore and the remaining 7% offshore, noting that onshore wind is a mature technology operating in 115 countries worldwide, while offshore wind is at an early stage of development, with capacity in only 19 countries. However, thanks to innovation, companies in the sector are starting to transform their offshore wind park offerings. Solarwind said that the number of offshore wind farms is expected to increase in the coming years as more countries develop or plan to develop their first offshore wind farms. Just a few days ago, China announced the construction of the world’s first offshore wind farm, using 16 MW turbines capable of generating 400 megawatts (MW) and producing around 1.6 TWh of electricity per year. Whether floating offshore wind farms or offshore wind farms, opening up the waters for turbine deployment is a great opportunity for new markets to join the industry. These developments will also create different needs in terms of how they are installed and transported. Wind energy logistics will require integrated service providers able to move them properly, first on land, then on water, easily and with complete safety.

Innovation-led speed and sustainability in renewable energy

Roof-top bladeless wind turbines, vertical axis turbines, floating multi-turbine technology platforms and more are just some of the increasingly cost-effective and reliable innovations in wind energy. Increased interest and investment from global energy players has driven the technology forward. Robotics and automation are also emerging in this field, and new logistics capacities for both inland and offshore transport will reduce installation, transportation and maintenance costs. This will be a positive development for the wind energy logistics sector, opening up new opportunities worldwide.

Increased awareness of clean energy and the desire to reduce the impact of global warming have contributed to a significant increase in the popularity of wind energy over the past decades, confirms AZO Cleantech. However, the environmental impacts of producing and moving such renewable energy are not always taken into account. When considering the future of wind power generation, even faster growth is needed to meet the ambitious roadmap set for the global energy sector. Innovation is also important in wind energy trends, as there are more ways to make the sector greener. Examples include solutions that avoid the need to landfill turbine blades after decommissioning. More sustainable, integrated ways of transporting equipment and turbines are also now being considered, with a particular focus on CO2 emissions, which an increasing number of players in the wind energy market are committed to reducing. There is a need for more integrated logistics to move decommissioned components to recycling areas or to the next destination where they will be reused, using low carbon transport. In any case, it is clear that in 2023 the need for integrated logistics partners capable of moving specific loads in a more sustainable way will be great.

Stronger logistics partnerships and shared industry growth in 2023

This year and beyond are expected to be characterized by strong new partnerships between wind energy manufacturers and logistics providers. Since the 2000s, wind energy deployment has grown rapidly thanks to research and public support. Cost will be a key issue for this partnership, as moderate to high production costs are needed to meet the low price demands of end consumers. According to Deloitte, in Europe, wind and solar PV, driven by cost reductions, are developing even under modest climate targets and are leading the way in European electricity generation. With costs no longer such a barrier and political stakeholders relaxing constraints, it seems that countries and markets that have fallen behind will still have plenty of room to catch up.

2023 will be the year of wind energy trends, characterized by fast, strong innovation, spanning related sub-sectors, which will call for better and closer cooperation.

Given the ever-changing nature of the wind energy industry, companies looking for suitable logistics partners are guided by their flexibility and ability to provide the right assets at the right time and place. For a wind energy company that has to choose a logistics partner in 2023, the choice is to look for someone with a large network (and therefore capabilities), the latest technology, a strong focus on safety and supporting customers with critical industry knowledge to invest and secure growth for years to come.

Author: Rolands Petersons, logistics expert

According to a recent market research report published by Extrapolate, the global freight market will reach USD 251.1 billion by 2030. Its growth is driven by increasing demand for integrated transport services and the development of international trade. The market is driven by the expansion of bilateral trade agreements between countries and the role of freight services as an integrated service provider to trade customers.

The introduction of digital solutions and technological developments are driving the growth of the freight market. Freight forwarders are using technology to streamline operations and provide more efficient and cost-effective services, including shipment tracking software, automated customs clearance and real-time updates to customers.

The freight market is also driven by the growth of e-commerce and online retailing. As consumers increasingly choose to shop online, the demand for timely and reliable delivery of goods is growing. Freight forwarders are ready to meet this demand by offering comprehensive logistics solutions for e-commerce businesses.

Ocean trade to account for the largest market share thanks to infrastructure modernisation

The Extrapolate study concludes that the ocean segment of the global freight forwarding market is experiencing rapid growth due to factors such as increasing internet penetration, rising consumer spending power and modernisation of port infrastructure, containers and ships. Various end-user industries are turning to ocean freight forwarding due to cost-effective transport solutions and growing strategic alliances. The growth of e-commerce companies is also positively impacting the market, especially in support of less-than-container-load shipments.

Documentation and favourable trade agreements are contributing to the growth of the freight market

Customs documentation and favourable trade agreements in the freight market have helped to improve the delivery of integrated services to customers. The increase in bilateral trade agreements is contributing to market expansion. There is a wealth of opportunities among industrialised countries, with increasing digitisation and efficiency of operations.

For example, the United States and Morocco, Brazil, and the European Union and Japan have concluded reciprocal trade agreements that are creating a boom in opportunities. Germany has also documented cars as the most traded commodity, with a market share of almost 19.3% of the USD 122.3 billion worth of cars exported.

Europe and North America experience exponential growth with global industrialisation and increasing trade activity

Europe is expected to lead the global seaborne freight market due to the presence of key players and technological advances in the region. The expansion of industrialisation and increasing development in different European countries are driving the growth of the sector. In addition, the growing popularity of e-commerce portals creates positive growth prospects for the region.

North America is also emerging as a fast growing market, driven by the increase in US exports and imports. The region is experiencing strong growth thanks to the world’s largest economy, the United States, which accounts for almost one fifth of world GDP. The region is also home to major market players, making the US a trading hub with many trading partners.

The global seaborne freight market is expected to reach USD 86.97 billion by 2028

According to a report published by Extrapolate, the global seaborne freight market is expected to reach USD 86.97 billion by 2028, driven by increasing cross-border e-commerce between trading countries, rising heavy cargo traffic and favourable government policies.

The ocean freight forwarding market is responsible for the transportation of goods via water and is a cost-effective option for trade activities. Strategic partnerships and the efficiency of water transport are also contributing to the growth of the sea freight market. According to the World Trade Organisation, sea freight is the backbone of global supply chains, accounting for more than 80% of total world trade.

Competition fosters industry development

The seaborne freight market has also experienced significant growth in recent years due to new entrants such as Kuehne + Nagel, Sinotrans, DHL and DB Schenker. Kuehne + Nagel International AG, a German company headquartered in Switzerland, is currently the leading player in the market, handling around 4.8 million twenty-foot equivalent container units.

Increasing trade volumes and demand for low-cost and efficient transport solutions have fuelled the growth of the ocean freight market, making it a highly attractive sector for new entrants.

Author: Rolands Petersons, logistics expert

Air freight volumes and freight rates are falling

Data published by the International Air Transport Association (IATA) for March 2023 shows that measured demand in tonne-kilometres continues to decline by -7.7% year-on-year. This trend, which started in March last year, has been confirmed for the 13th consecutive month. It has an even greater impact on international traffic, which is down by 8.1%.

At the same time, compared to March 2022, freight capacity has increased both globally and internationally. This increase in supply can be explained by an increase in available capacity in the belly compartment of passenger aircraft as airlines intensify their flight programmes in response to the recovery in this area.

Although demand continued to decline in March compared to the previous period, IATA indicates that the magnitude of the decline is gradually decreasing, compared to -9.4% in February, -16.8% in January and -15.6% in December. However, it is too early to draw any firm conclusions. “It is not clear at this stage whether this is the start of a potentially modest improvement trend or an upturn in market volatility. Regardless, March results are again negative compared to pre-COVID levels,” IATA warns.

Compared to March 2019, demand is down 8.1% (-9% internationally). Overall capacity has almost recovered to pre-pandemic levels, although it is still 5% behind internationally.

Demand falls but capacity rises

This cross-effect between falling demand and rising capacity puts downward pressure on air freight prices, which incidentally was predicted by IATA in its 2023 forecasts after the pandemic outbreak.

According to Upply, the month-on-month decline is now widespread. The Asia-Pacific region is particularly affected by strong capacity growth (+23.6% year-on-year in March), while in North America the dominant factor seems to be weaker demand, as supply growth remains very moderate (+0.4%).

Europe, on the other hand, is in a very specific situation, characterised by the impact of the war in Ukraine. The military conflict has led to a reduction in capacity and the introduction of new, more expensive routes, which may explain the atypical price development in the Europe-Asia corridor compared to the previous year. On the other hand, the massive capacity expansion by Asian airlines in a context of gloomy cargo demand has led to a fall in prices during the year. Asia-Pacific airlines’ cargo volumes in March 2023 were down 7.3% compared to the same period last year. This was a slight decrease compared to February (-5.4%). The drop in demand shows that air cargo traffic in the region has not yet stabilised after the resumption of Chinese air traffic in January.

Despite this general slowdown, overall freight rates are still higher than before the Covid-19 period.

Impact of the global economy on air freight

Volatility in the air freight market reflects to some extent the general economic instability. IATA points to a number of unfavourable parameters in the air freight sector:

The global economy continues to slow “due to a combination of factors such as the tightening global financial conditions, high levels of global debt and supply chain issues, including those related to the war in Ukraine”.

Global trade in goods also continues to decline. In February, it fell by 2.6%, faster than in the previous month (-1.0%).
No sharp reversal is expected in the near future. Quite logically, given the weakening of global trade, the Purchasing Managers’ Indices (PMIs) for new export orders worldwide remained below the critical threshold of 50 in March. Despite the abandonment of the zero-coverage policy, the Chinese economy is struggling to recover. After a slight improvement in February, the Chinese PMI index fell below the 50-point mark in March. Other major economies, including Germany, Japan, the US and Korea, also showed contractions in March compared to February, IATA said.

Air freight activity will continue to be constrained by the need to replenish inventories in the months ahead. The PMI for supplier delivery times reached a record high of 76 in March 2023, compared to an all-time low of 11 in May 2022. This reflects a reduction in delivery times, “particularly in the US and Germany”, IATA said. While the lengthening of delivery times had boosted air freight in the post-Covid-19 period, the opposite trend is now taking place.

Against this worrying backdrop, the main good news is the decline in inflation in the G7 countries. The consumer price index reached 5.4% in March, after having reached 7.8% in June 2022. In the US, consumer price inflation fell below 5% in April for the first time in two years. Producer prices are also on a downward trend. Businesses in particular are benefiting from the fall in oil prices. This is very good news for the transport world in general and airlines in particular.

If inflationary pressures continue to ease, the world’s financial institutions could ease the interest rate hikes decided in recent months in order to reduce overheating, thus helping to boost demand. The air freight industry hopes that this opportunity will finally end the downturn and return to pre-pandemic levels.

Author: Rolands Petersons, logistics expert