Headline
1.Noto Peninsula Earthquake, Haneda Airport Accident, and thinking about Optimal Preparation
2.The age of prioritizing one’s own country, how can a resource-poor Japan prosper?
3.Has the U.S. Economy Already Peaked? The European Central Bank is wary of a resurgence of inflationary pressure.
4.In 2024, attention will be focused on the Taiwan presidential election and the U.S. presidential election.
5.Supply Chain Disruption Expected Due to Avoidance of Red Sea and Suez Canal Passage, but Spot Freight Rates Expected to Fall after Chinese New Year
6.New Container Information in December 2023
7.We entrust the future of Japan to today’s youth, and we are confident that they can contribute to world peace.
1.Noto Peninsula Earthquake, Haneda Airport Accident, and thinking about Optimal Preparation
It is customary for me to spend the year-end and New Year’s holidays at a 15-story hotel near Saitama-shintoshin Station. After paying my first visit to the shrine on the morning of January 1, I was pondering the “global container movement in 2024” in my room on the 12th floor when, after 4:00 p.m., I felt a strong tremor that I had felt in Yokohama when the Great East Japan Earthquake (magnitude 9.0) hit on March 11, 2011. It was a magnitude 7.6 earthquake with the epicenter on the Noto Peninsula. I immediately prayed that it would not be a terrible disaster. However, according to the official announcement of Ishikawa Prefecture, the death toll is over 200, with more than 50 people missing. The New Year vacations, the peninsula’s intricate coastline, depopulation, and numerous old collapsed houses seemed to be hampering rescue efforts. We pray for the souls of those who lost their lives and hope that the affected areas will be restored as soon as possible.
Meanwhile, at 6 p.m. on January 2, a commercial aircraft, JAL, on landing at Tokyo’s Haneda Airport collided with a Coast Guard aircraft waiting to deliver aid supplies for the Noto Peninsula earthquake, resulting in a fire that killed five Coast Guard crew members, while all 379 JAL passengers and crew were evacuated and safe. It took 18 minutes to eject. The aircraft then burst into flames and retained no shape. I was convinced that this was the result of the airline’s daily training.
Japan is one of the most seismically active nations on Earth, so it is important to conduct evacuation drills on a regular basis, stockpile food, and anyway maintain a minimum lifeline until rescue and relief supplies arrive. It is important to be prepared for what is missing by referring to past disasters. Please be well prepared not to lose lives due to delays of rescue. I believe that each prefecture and municipality has already prepared the necessities of life, but I hope that they will once again prepare the most appropriate things, taking various cases into consideration.
2.The age of prioritizing one’s own country, how can a resource-poor Japan prosper?
The major movement in the world today seems to be shifting from a trend in which each country makes use of its own characteristics, fulfills its role, and helps each other under the name of globalisation, to the age of prioritizing one’s own country, as seen in the United States, which advocates “America First,” as well as in despotic and hegemonic nations. At the very least, we are required to protect our own country at home. There is a move to restrict exports of items needed by other countries in order to take advantage of their own countries. In this context, can our country understand this trend and achieve prosperity by minimizing its dependence on other countries? A country without natural resources needs to develop technologies, reforms, improvements, and productivity to overcome the lack of resources. Having experienced a self-sufficient society during the Edo period, the construction of a modern nation in a short period of time during the Meiji Restoration, and the remarkable recovery after World War II, I am confident that Japan can use the 30 years after the bubble economy to create a nation that will be the envy of the world. I believe that we can create a free, peace-loving, and hopeful nation with equality, fairness, and mutual respect, and become a nation that other countries want to emulate.
3.Has the U.S. Economy Already Peaked? The European Central Bank is wary of a resurgence of inflationary pressure.
According to the December 2023 employment report released by the U.S. Department of Labor on January 5, the number of nonfarm payrolls increased by 216,000 from the previous month. The unemployment rate was 3.7%, the same as in November. Average hourly earnings increased 0.4% from the previous month. Considering that the labor participation rate in November was 83.3%, higher than the 82.9% in December 2019 before the Corona disaster, and that the number of private sector job openings of 7.81 million in November is close to the 6.91 million in November 2018, the largest before the Corona disaster, can we say that the US economy has already reached its peak ?
The six-month forward cargo forecast provided by the National Retail Federation (NRF) projects December at 1.89 million TEUs, up 9% from the same month last year. This January, 1.92 million TEUs (+6.1% y/y), February 1.76 million TEUs (+13.8% y/y), March 1.7 million TEUs (+4.7% y/y), April 1.79 million TEUs (0.2% y/y), and May 1.92 million TEUs (-0.8% y/y) are expected. We expect import retail cargoes to increase at a low rate in the first quarter of 2024 and to grow significantly in the spring. However, we expect an increase in transportation costs due to the additional days required for the prolonged transit through the Cape of Good Hope avoiding the Suez Canal due to merchant vessel attacks in the Red Sea.
According to the report by the European Union’s Statistics Authority on January 5, the Eurozone consumer price index for December 2023 rose 2.9% y/y, the first acceleration in growth in eight months. The European Central Bank (ECB) will continue to tighten monetary policy for the time being in order to control inflation. This is because strikes in European countries demanding higher wages are continuing, and while higher wages will strengthen consumer spending and support the economy, the ECB is wary of a resurgence of inflationary pressures.
4.In 2024, attention will be focused on the Taiwan presidential election and the U.S. presidential election.
The year 2024 is a year of elections in many countries and regions around the world. This may result in a political vacuum, policy delays, and confusion that may limit economic activity. We hope that the current situation will be affirmed, continued, or in a positive way, result in political reforms and economic activities improving and developing.
First and foremost, I would like to focus on the Taiwan presidential election to be held on January 13. Will the ruling Democratic Progressive Party (DPP) remain in power? We believe that the situation will change depending on whether the opposition Nationalist Party comes to power. If Nationalist Party comes to power, Taiwan-China economic exchanges will become more active and the Sinicization of Taiwan will be promoted. Political inconvenience is undeniable. This is for the people of Taiwan to decide. Most noteworthy is the U.S. presidential election on November 5. Will President Biden, a Democrat, be able to hold on for a second term? If Mr. Trump is elected, we can expect a major change in U.S. political policy.
5.Supply Chain Disruption Expected Due to Avoidance of Red Sea and Suez Canal Passage, but Spot Freight Rates Expected to Fall after Chinese New Year
Due to attacks on general merchant vessels in the Red Sea by the Houthis, a pro-Iranian armed group in Yemen, the three major alliances decided to suspend passage through the Suez Canal in December and opted for passage via the Cape of Good Hope. As a result, the increased demand for additional vessels and longer voyage distances will result in an increase of approximately one month in transport days. A scenario of tight container demand can be seen.
Drewry expects delays and diversions in the Red Sea to disrupt the supply chain, which will take months to recover. However, spot freight rates are expected to decline after the Chinese New Year.
6.New Container Information in December 2023
Newly-built container price for December is $2,000 per 20f. This is 11% or $200 more than last month. The number of newly-built containers is 358,809 TEU (Dry: 330,500 TEU, Reefer: 28,309 TEU). Total newly-built container inventory at container plants in China was 885,533 TEU (Dry: 821, 218 TEU, Reefer: 64,315 TEU), an increase of 30,832 TEU over last month.
Compared to the number of containers produced annually over the past 10 years, the number of newly-built containers produced in 2023 was 2,192,287 TEU (Dry: 1,967,651 TEU, Reefer: 224,636 TEU), the second-lowest annual production on record. This is the second-lowest number of dry containers and the fourth-lowest number of reefer containers ever produced. This proves how bad the demand for new containers in 2023 was.
7.We entrust the future of Japan to today’s youth, and we are confident that they can contribute to world peace.
Japanese youth are not to be undervalued! In a while before, I have mentioned three young people who represent Japan at my own discretion and prejudice. One of them is Shohei Otani, 29, who is playing in the Major League Baseball in the United States. He is a two-way player who can play both as a pitcher and a hitter at a higher level than other players. In 2023, he became the first Japanese, or even the first Asian, to win the home-run king, and won his second American League MVP award following 2021. In 2023 off-season, he became a free agent from the Angels and joined the Dodgers on a 10-year, $700 million (101.5 billion yen) contract.
The second is Naoya Inoue, 30, who became a four-belt undisputed champion in professional boxing super bantamweight division in December and, together with the bantamweight division, a two-weight, four major sanctioning bodies unified champion. He accomplished this feat in one year. He is the second boxer in history to achieve this feat. His boxing sense is truly worthy of being a monster. His story of knocking out his opponents is an art, isn’t it?
Last but not least is Sota Fujii, 21, who has won eight Shogi championships. He appeared in the shogi world at the age of 14, and seven years later, he achieved an unprecedented achievement. He became the youngest player in history to win eight championships at the age of 21 years and 2 months.
Their common character is humble, not proud, not conceited, loved by others, and yet they are stoic technical seekers. I look forward to their further success in the world.
Japanese young people are not as weak as we worry. We can entrust the future of Japan to the Japanese youth. I am also convinced that Japanese people can contribute to world peace.
(Translated by Mr. Masaki Nakatsu)