E2open Ocean Shipping Index Reflects Increase in Cross-Ocean Shipment Transit Times Due to Geopolitical Unrest and Natural Disasters

Rhea-AI Summary

E2open Parent Holdings, Inc. (ETWO) has published its Ocean Shipping Index, showing an increase in average global shipment duration across major shipping lanes. The report indicates that all major shipping lanes saw duration increases from two to four days for the fourth quarter of 2023, continuing into 2024. The data provides insight for decision-making around global ocean shipments, with details on the impact of recent global shipping challenges and the implications for shippers and ocean carriers. Noteworthy findings include a global average shipment duration increase of two days, with all major shipping lanes experiencing duration increases.

Insights

Supply Chain Analyst

An extended average shipment duration across major shipping lanes, as indicated by the e2open Ocean Shipping Index, has significant implications for businesses reliant on global supply chains. The increase in transit times directly affects inventory management, with potential stock shortages or overstock situations due to the inability to accurately forecast arrival times. This uncertainty can lead to increased costs for businesses as they may need to expedite shipments or carry higher inventory levels as a buffer.

Moreover, longer shipment durations can exacerbate the bullwhip effect, where small fluctuations in demand at the retail level cause progressively larger fluctuations up the supply chain. Companies may find it challenging to adjust their production schedules and workforce requirements in response to these delays, impacting operational efficiency.

The environmental impact of longer sailings is another concern. As companies strive to reduce their carbon footprint, extended shipment durations could hinder sustainability efforts and potentially affect consumer perception and regulatory compliance. Businesses must now factor in these environmental considerations into their logistics planning.

Financial Analyst

The report's findings are likely to have a ripple effect on the financial performance of companies with international logistics operations. As transit times increase, companies may see a rise in working capital requirements due to longer cash-to-cash cycles. The need to maintain higher inventory levels to buffer against delays can tie up capital that could otherwise be used for investment or debt reduction.

Investors should monitor companies with significant exposure to the affected shipping lanes for potential impacts on profit margins and cash flows. Companies that are agile and can adapt their supply chain strategies effectively may mitigate some of these impacts and could be seen as more resilient investments.

It is also important to consider the potential for increased shipping costs due to rerouting around disrupted areas, such as the Panama Canal and the Red Sea. These additional costs could be passed on to consumers, affecting sales volume and price competitiveness in the market.

Environmental Economist

From an environmental economics standpoint, the report highlights a potential increase in greenhouse gas emissions due to longer shipping routes and increased transit times. This could have broader implications for global efforts to combat climate change, as the shipping industry is a significant contributor to carbon emissions.

Businesses and policymakers must balance the economic benefits of global trade with the environmental costs. Innovations in shipping technology, such as cleaner fuels and more efficient vessel designs, could help mitigate the environmental impact. However, the transition to such technologies requires substantial investment and time and the current disruptions may accelerate this need.

Additionally, environmental regulations may become more stringent in response to these trends, potentially imposing higher costs on businesses that fail to adapt. Companies that prioritize sustainability in their supply chain operations may gain a competitive advantage as consumers and regulators increasingly focus on environmental impact.

Latest report finds two-day increase from previous quarter in average global shipment duration across most major shipping lanes

AUSTIN, Texas--(BUSINESS WIRE)-- E2open Parent Holdings, Inc. (NYSE: ETWO), the connected supply chain SaaS platform with the largest multi-enterprise network, has published the latest edition of its Ocean Shipping Index, a quarterly benchmark report that provides insight for decision-making around global ocean shipments. Report data indicates that despite stability in recent quarters, all major shipping lanes in the index saw duration increases from two to four days for the fourth quarter of 2023, an upward trend that continues in the first month of 2024. Multiple recent global shipping challenges, including a drought in the Panama Canal and the threat of attacks in the Red Sea, have shippers and ocean carriers considering alternate routes that are significantly longer.

The e2open Ocean Shipping Index provides shippers with data-driven findings to better anticipate and adapt to factors contributing to delays. The report, published quarterly, is based on ocean shipping activity on e2open’s business network, encompassing over 480,000 connected enterprises managing 15 billion transactions and tracking more than 70 million containers annually. Providing details down to booking date, e2open’s Ocean Shipping Index arms the market with unique and timely insights for proactive and optimal decision-making.

“Two of the world’s most important waterways for moving global ocean shipments are experiencing tremendous challenges,” said Pawan Joshi, executive vice president, products and strategy for e2open. “The latest Ocean Shipping Index illustrates how these seemingly local disruptions are quickly impacting global logistics, causing uncertainty, and making it more difficult for companies to meet customers’ expectations. Not only do companies have to deal with longer transit times and cost, but they must also factor in the environmental impact of longer sailings. Longer sailing times also affect available container capacity for full as well as empty containers. The full impact of these disruptions is still unfolding and remains to be told in next quarter’s index; hence shippers and ocean carriers should continue to monitor transit times and update their demand, supply, and logistics planning parameters while taking proactive steps now to mitigate these disruptions.”

Noteworthy findings from the latest e2open Ocean Shipping Index covering the fourth quarter of 2023 include:

• The global average shipment duration increased over the last quarter by two days, up to 60 days.
• All major shipping lanes in the index saw duration increases.
• Exports from Asia to North America and Asia to Europe averaged 60 and 64 days, respectively, reflecting an increase of three days in each route compared to the prior quarter.
• Shipment duration from North America to Europe increased by four days, greater than forecasted.
• Asia to South America routes saw an increase in shipment duration of two days from the previous quarter and four days from the same quarter in 2022.

Read the full e2open Ocean Shipping Index for additional data points and insights; view and subscribe at e2open.com. This report is one of several benchmark reports available from e2open to help companies manage increasingly complex and rapidly shifting global supply chains.

About e2open

E2open is the connected supply chain software platform that enables the world’s largest companies to transform the way they make, move, and sell goods and services. With the broadest cloud-native global platform purpose-built for modern supply chains, e2open connects more than 480,000 manufacturing, logistics, channel, and distribution partners as one multi-enterprise network tracking over 15 billion transactions annually. Our SaaS platform anticipates disruptions and opportunities to help companies improve efficiency, reduce waste, and operate sustainably. Moving as one.^™ Learn More: www.e2open.com.

E2open and “Moving as one.” are the registered trademarks of E2open, LLC. All other trademarks, registered trademarks and service marks are the property of their respective owners.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240125768259/en/

Media Contact:

5W PR for e2open

e2open@5wpr.com

718.757.6144

Investor Relations Contact:

Dusty Buell

dusty.buell@e2open.com

investor.relations@e2open.com

Corporate Contact:

Kristin Seigworth

VP Communications, e2open

kristin.seigworth@e2open.com

pr@e2open.com

Source: E2open Parent Holdings, Inc.

FAQ

What is the ticker symbol for E2open Parent Holdings, Inc.?

The ticker symbol for E2open Parent Holdings, Inc. is ETWO.

What does the latest edition of the Ocean Shipping Index report by E2open indicate?

The latest edition of the Ocean Shipping Index report indicates an increase in average global shipment duration across major shipping lanes, with all major shipping lanes experiencing duration increases from two to four days for the fourth quarter of 2023.

How many connected enterprises does e2open's business network encompass?

e2open's business network encompasses over 480,000 connected enterprises managing 15 billion transactions and tracking more than 70 million containers annually.

What are some of the challenges mentioned in the report that are impacting global logistics?

The report mentions challenges such as a drought in the Panama Canal and the threat of attacks in the Red Sea, leading shippers and ocean carriers to consider alternate routes that are significantly longer.

What are some noteworthy findings from the latest e2open Ocean Shipping Index report?

Noteworthy findings include a global average shipment duration increase of two days, with all major shipping lanes experiencing duration increases. For example, exports from Asia to North America and Asia to Europe averaged 60 and 64 days, reflecting an increase of three days in each route compared to the prior quarter.